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Iberdrola/ScottishPower Q3 Results - £340 million Smart Meter UK Contracts Placed

26/10/2016

Iberdrola invests €3.04 billion (+45%) – 64% allocated to growth

  • 64% of the total amount is allocated to growth, mostly in the renewables, networks and regulated or long-term contract generation businesses
  • Net profit totals €2.042 billion, up 6.4% on the first nine months of 2015, driven by good business performance and the reduction in operating and financial costs

Iberdrola made investments worth €3.04 billion in the first nine months of the year, 45% more than in the same period of 2015. Of that amount, 63.5% was allocated to growth, and in keeping with the company’s strategy of focusing on stable, predictable areas, 91% of the investments went to regulated businesses or long-term contracts.

As regards the results for the first nine months of the year, Iberdrola obtained a net profit of €2.042 billion, up by 6.4% on the same period last year, driven by good business performance and the reduction in operating and financial costs. Recurring net profit rose by 17% to €1.9576 billion.

Gross operating profit (EBITDA) stands at €5.729 billion, a 4.2% increase which would grow to 6.7% if foreign exchange impact were excluded. Of the total amount, 76% come from businesses that are regulated or which have long-term contracts.

The group’s revenues were €21.5377 billion (-9.1%) and its gross margin improves by 2.3% to €9.7405 billion.  Funds from operations (FFO) stand at €4.7172 billion, i.e. a 9.5% increase compared to the figure for the first nine months of 2015.

UK Business - £340 million Smart Meter Contracts Placed

SP Energy Networks

EBITDA £580.9m (-£16.5m -2.8%)
The returns for SP Energy Networks are largely driven by the phasing of investments following the implementation of the RIIO-ED1 distribution investment programme from April 2015. This year approximately £650 million is being invested in the distribution and transmission networks.

Generation and Supply

EBITDA £187.1m (+£4.8m +2.6%)
UK Generation has improved due to lower net operating expenses linked to the closure of Longannet. The Retail business is down by £17 million due to milder weather and increases in non-energy costs.

ScottishPower Renewables

EBITDA £156.9m (-£62.8m -28.6%)
Renewables results are lower, primarily driven by the 26% reduction in output across the first half of the year. In the third quarter, renewables output is actually 5.9% up on the same quarter last year. The full-year 2015 was a record year for wind power output in the UK. ScottishPower Renewables is currently constructing eight new onshore wind projects on 6 sites across Scotland, with investment of more than £650 million. Once completed, the new projects will generate 474MW of electricity, which will bring the company’s UK wind energy portfolio to over 2GW of capacity.

£340 million contract awards drive ScottishPower's Smart energy meter installation

The next generation of ‘Smart’ electricity and gas meters are being rolled out to homes across the UK, following major contracts placed by ScottishPower in the first nine months of the year.

LowriBeck, Amey, Providor and Actavo will all assist ScottishPower to deploy over 5 million Smart meters in towns and cities across the UK by 2020, replacing traditional meters.

Successful trials of Smart meter installations have taken place with 100,000 meters already in place, mainly installed in the homes of customers who have been with the company for at least two years. ScottishPower expects to soon be installing up to 2,000 meters every day across Scotland, England and Wales. The project will at peak have over 1100 expert installers working to deliver Smart meters to customers.

Following the recent launch of the PowerUp offering, ScottishPower is also working on further new products and digital innovations to empower customers to make informed decisions about how they consume energy in the home, with a focus on existing customers.

Keith Anderson, ScottishPower Chief Corporate Officer, said: “ScottisPower is well on course to invest over £1.8 billion this year, and digital innovation is a key part of our long-term business objectives.

"Smart metering will revolutionise the way our customers consume and monitor their own energy use, empowering them to make real behaviour changes and identify savings.

“This contract award is a significant moment for ScottishPower in the delivery of Smart meters for millions of people across the UK. There is a significant challenge to support climate change targets and we are determined to offer all our customers a smart meter by the end of 2020, meeting the UK Government’s deadline.

“It is crucial however that the significant investment we are making is supported by the Government-appointed Data Communications Company, which has been tasked with delivering the necessary infrastructure for the new meters on time and to scope, enabling them to operate effectively across the energy market.”