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Iberdrola Q1 Ebitda Rose 8.8% Driven By A 14.5% Increase In International Business


Recurring net profit rose 7.2%, with net earnings similar to last year at €841 million due to lower extraordinary income


  • Gross margin rose 6.8% to €3,614 million, helped by strong results from networks (+17.3%) and renewables (+21.6%)
  • Financial strength improved over Q1 last year: gearing was reduced to 41.2% and net debt/Ebitda improved to 3.7x
  • Moody’s raised IBERDROLA’s ratings outlook, confirming the company as the IBEX industrial group with the best rating among leading credit agencies


  • Q1 results support IBERDROLA’s commitment to offer shareholders a minimum annual remuneration of €0.27 gross per share up to 2016
  • The Board accordingly approved an increase in capital in respect of a new edition of the Iberdrola flexible dividend programme in July, for at least €0.113 per share -plus €0.03 in cash- added to the €0.127 per share distributed in December
  • Directors also approved a capital reduction of 2.32% to maintain outstanding shares at around 6.24 billion


  • The proposed integration of UIL Holdings Corporation (UIL) and IBERDROLA's US subsidiary – with an enterprise value exceeding $4 billion – will create a new company listed on the New York stock exchange with assets exceeding $30 billion and in which IBERDROLA will hold 81.5% of its capital

IBERDROLA recorded first quarter Ebitda of €2,136.3 million, a rise of 8.8%, while net earnings were stable at €840.8 million (-0.7%). Recurring net profit rose 7.2% to €795.9 million.

These results were made possible by growth in international businesses, which increased their contribution to Ebitda by 14.5%, and to strong operating performance during the period. Revenues rose 5.5% to €8,780.7 million while purchases were 4.6% higher at €5,167 million. Gross margin rose 6.8% to €3,613.7 million, with a 21.6% rise in renewables and one of 17.3% in networks.

Ebitda was 8.8% higher at €2,136.3 million, driven by international business and exchange rate effects. Of the total, 70% came from regulated businesses. By business area, networks and renewables stood out with Ebitda rises of 24.1% and 24.7% respectively, offsetting an 11.4% decline in generation and supply.

Networks businesses advanced in all regions thanks to a broader base of regulated assets and increased efficiency, while renewables were helped by a recovery in prices in Spain from extraordinarily low levels in 2014, and by increased output in the UK - following the completion of the West of Duddon Sands offshore wind farm - as well as in Latin America.

Generation and supply was however affected by lower hydro production in Spain compared to the high rainfall in the first quarter of 2014, and also reflected the extraordinary gains in the gas business during the first three months of last year.

Operating profit (EBIT) rose 5.3% to €1,343.8 million, with a 17% increase in depreciation due to currency impacts and new renewable capacity on stream. Net recurring profit rose 7.2% to €795.9 million and net earnings were stable at €840.8 million (-0.7%) reflecting lower extraordinary earnings compared to 2014. Funds from operations (FFO) were 6.6% higher at €1,658.5 million, exceeding investments which came to €593 million across all businesses.

Results by business


EBITDA from networks rose 24.1% to €966.8 million, of which nearly 60% came from outside Spain which nonetheless improved to €398.9 million as a result of investments and efficiency measures.

In the UK, higher revenues from a broader asset base following investments drove Ebitda to €231.1 million. In the US, lower expenditure also helped improve results with Ebitda of $214.1 million while in Brazil it stood at R$226.8 million as the drought had no impact in the accounts as in the first quarter of 2014.

Generation and supply recorded Ebitda of €781.4 million, a drop of 11.4% resulting from lower hydro output in Spain and a fall in extraordinary income from gas in Spain and the US compared to the first quarter of last year. In Spain Ebitda came to €432.2 million, due to a 17% drop in production and higher costs in the generation mix.

In the UK, Ebitda came to €173.5 million reflecting on the one hand increased costs and on the other increased gas sales. In Mexico it rose 7.7% to €130.2 million driven by new contracts and renegotiation of existing agreements under more favourable terms.


Ebitda from renewables rose 24.7% to €428.3 million due to gains in Spain, the UK and Latin America. Of the total, 65% came from outside Spain.  In Spain, Ebitda was €149.2 million with a 14.7% drop in production of energy compensated by a recovery from the extraordinarily low prices in 2014.

In the UK, Ebitda from renewables came to €111.2 million with a 14.7% increase in production reflecting a new contribution from the West of Duddon Sands offshore wind farm that reached full operating capacity in October 2014. In the US, a 13.2% fall in output affected Ebitda which came to $88.6 million. In Latin America, Ebitda came to €24.5 million, with a 26.2% increase in production, while in the rest of the world it stood at €28.2 million.

Continued improvement in financial strength

Net adjusted debt stood at €26,305 million compared to €25,718 million at the same time last year, due to a negative currency impact. Gearing improved to 41.2% from 42.2% despite that impact. Excluding financing for the temporary tariff deficit that at the end of March stood at €309 million, net adjusted debt would be €25,996 million and gearing 40.9%.

The Company also improved its financial ratios, with net debt/Ebitda at 3.7 times, funds from operations (FFO) to net debt at 21.1% and retained cash flow/net debt at 17.8%.  Reflecting this trend, Moody’s improved Iberdrola’s outlook on April 8 to stable, and confirmed its current Baa1 rating. The Company has the best credit rating among IBEX industrials, and maintained a strong liquidity position exceeding €8.5 billion, enough to cover financing needs for 27 months.

Shareholder remuneration maintained

Performance during the quarter enabled IBERDROLA to reaffirm its commitment to offer shareholders a minimum remuneration of €0.27 gross per share until 2016.

The Board yesterday approved a increase to be carried out in July, the first that was approved by the recent General Shareholders Meeting, in order to implement a new  edition of the Iberdrola flexible dividend programme.

This remuneration plan will allow shareholders to receive IBERDROLA shares free of charge or in cash. To this effect, the Board set the price at which the Company guarantees to acquire subscription rights for shareholders that opt to receive remuneration in cash, at a minimum of €0.113 per share.

To this sum will be added the €0.03 gross per share to be paid on July 3, in addition to the €0.127 gross payment distributed last December against 2014 results, to complete the €0.27/share total remuneration for shareholders.

The Board also approved a capital reduction of 2.32% to maintain the number of outstanding shares at approximately 6.24 billion, thereby fulfilling two of the resolutions approved by the AGM last month in Bilbao where all items on the agenda were supported by an overwhelming majority with a 78.65% quorum.

Establishing a platform for future growth

IBERDROLA is pursuing a business model focused on creating a platform for future growth, based on networks, renewables and regulated generation in countries with a stable regulatory framework and growing demand. The Group expects to end 2015 with increased Ebitda and recurring net earnings compared to 2014.

For networks, the Company has completed the current round of investments in the UK and will continue expanding its regulated asset base through the various regulatory programmes under way in transmission and distribution with €8.3 billion in investments committed up to 2023.

In the US it has also achieved a number of milestones that guarantee growth for coming years: approval of new tariffs and a €800 million investment plan for the 2015-2019 period in Maine and one of €2.6 billion in New York state; initiation of a new rate case as well as negotiations on a new energy framework for New York state and new opportunities for transmission development in both states.

Additionally, the integration between UIL Holdings and Iberdrola USA, with an enterprise value of $4 billion, is envisaged for completion in the last quarter of 2015. Once completed, this would create a new company with more than $30 billion in assets and in which IBERDROLA will hold 81.5%.

During the course of 2015 the Company will advance towards closing the operation with the various required authorizations. It has already received approval from the US Justice Department and the Federal Trade Commission under the Hart-Scott-Rodino anti-trust law.

IBERDROLA expects to obtain all remaining federal authorizations between the third and fourth quarter, including the Massachusetts Department of Public Utilities, the Connecticut Public Utilities Regulatory Authority and the Federal Energy Regulatory Commission.

It also estimates approval will be obtained from the New York Stock Exchange and the Securities and Exchange Commission in the fourth quarter, after which UIL will hold a shareholders meeting which will vote whether to approve the integration which has already been approved by the company's board.

Elsewhere, the Company is consolidating growth in Brazil where a recent tarif review will improve networks business.

In renewables, a number of wind energy projects are confirming the Company's commitment to clean energy and putting into place the foundations for growth in coming years.

In the UK, IBERDROLA has 450 MW in wind projects, of which 350 MW are under construction and 100 MW are due to start construction this year, consolidating the Company as the leading wind energy operator in this country. It has also been awarded a contract for difference CfD) for its East Anglia One  offshore wind farm for capacity of 714 megawatts (MW) which will involve an investment of approximately €2.8 billion up to 2019 when it starts operations.

In Germany, the Company is making progress in the 350 MW Wikinger offshore wind farm. In the US it continues to increase installed capacity with new wind farms such as the 202 MW Baffin project, and has an additional 900 MW of wind projects under development.

In Mexico, the Group is building two new wind farms with a total capacity of 136 MW which will start operations in 2015, and has a total wind and solar pipeline of 1,500 MW. In Brazil, it expects to start up 174 new megawatts in wind energy and 2016-2017 and has another 1,000 MW of wind projects in the pipeline. In regulated generation, concentrated in Mexico, IBERDROLA is building two new combined cycle plants and two cogeneration units.

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