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Iberdrola Results Q3 2018

24/10/2018

Iberdrola reported €2.09 billion net profit for the nine months to the end of September, 13.5% below the same period last year. This result was impacted by lower extraordinary income in the period (which in 2017 amounted to €759 million) and the worsening performance of Generation and Supply in Spain, in marked contrast with the positive business results elsewhere.

  • Operating results: the good performance of international business, in contrast with lesser results in Spain, drives gross operating profit (EBITDA) up by 22.5% to €6.72 billion. The Generation and Supply business in Spain, which has a net buying position since the market is larger than its production capacity, delivers lower results affected by higher wholesale prices, increased cost of raw materials and higher carbon prices
  • In global terms, all the businesses posted double-digit growth in EBITDA: Renewables (+38.1%), Networks (+17.8%) and Generation and Supply (+17.4%). Thus 80% of group EBITDA came from regulated activities and revenues with long-term predictability, in accordance with the company’s strategy.
  • Improved efficiency: the positive business performance and cost containment bring the ratio of net operating costs to gross margin to 27.3%, an improvement of 180 basis points
  • Investment effort: 80% of investment was made in Networks and Renewables assets. As a result, the company will commission 2,700 MW (2,200 MW in Q4) throughout the year and add 12,000 MW capacity up to 2022 (+20%), increasing its regulatory asset base in Networks by 38% until then
  • Iberdrola confirms its guidance for 2018: the acceleration of growth during the third quarter allows the company to project operating profit (EBITDA) in excess of €9 billion and net profit of €3 billion for the year end
  • Increased interim dividend: the company’s Board of Directors has approved an increase of 7.1% in the interim dividend for 2018 (€0.15 gross per share in cash or new shares), to be paid in January 2019

ScottishPower Results Q3 2018

Business Results

SP Energy Networks:

  • EBITDA: £591.1m - compared to £567.2m Q3 2017 (+ 4%)

Returns for SP Energy Networks (SPEN) continue in line with expectations against record levels of investment. The RIIO ED1 distribution investment programme is delivering £3 billion in the period 2015 to 2023, with the RIIO T1 transmission programme delivering £2 billion between 2013 to 2021.

Generation and Supply:

  • EBITDA: £170.0m - compared to £33.3m Q3 2017 (+ 410%)

Generation and Supply has recovered from the very poor performance in 2017. Across the full year 2017 ScottishPower’s margin for supplying gas and electricity was -0.3%. In 2018 ScottishPower is seeking to deliver a margin of between 3 to 4%, in line with a typical year and other retail sectors. Average customer energy consumption has increased (1.8% gas, 2.7% electricity) and customer numbers are approximately 4.8 million compared to approximately 4.9 million at the half year 2018.

ScottishPower Renewables:

  • EBITDA: £266.7m - compared to £224.7m Q3 2017 (+ 19%)

Wind power production increased to 3,153 GWh, 7% higher than the same period in 2017. This follows the completion of a £650 million investment programme to build 8 new onshore windfarms in Scotland. Offshore construction for East Anglia ONE (714MW) continues to progress well, with the installation of the offshore substation taking place at the end of August. First power from the project is expected in 2019, with full operation during 2020.

Commenting on the results, Keith Anderson, ScottishPower CEO, said: 

“Our move to 100% green electricity generation will take a major step forward in Q4, as we anticipate the sale of the Generation business to Drax to finalise, following the necessary approvals from Drax shareholders. Over the rest of this year and in to 2019 we will be focussed on delivering greener electricity for our customers, from offshore and onshore wind as well as new solar developments.

“In terms of Renewables so far this year, our recent investment in onshore wind has helped to deliver an increase in wind power production. Our largest UK investment project - the construction of the £2.5 billion East Anglia ONE offshore windfarm - is also progressing well. We expect first generation of electricity next year. 

“Networks continue to deliver major investments and the business is performing in line with expectations. We are delivering a smarter and more robust grid system to support renewable energy connections, and to ensure the network can meet the challenges associated with the expected increase in electric vehicles.

“Generation and Supply has improved on the poor results in 2017, moving towards a more typical year. We expect the details of the proposed price cap to be finalised in Q4.”

Supporting Information

To view Iberdrola's full press release and supporting documentation, please click the links below:

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