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Iberdrola / ScottishPower Quarter 3 Results 2017


Iberdrola / ScottishPower Quarter 3 Results 2017

  • Iberdrola increases investments 31.5% to nearly €4 billion in the first nine months
  • Net profit reaches €2.41 billion (+18.4%) thanks to international businesses which compensate poor results in Spain
  • 91% of investments were allocated to networks, renewable energy and long-term contracted generation: the group has 7,400 MW of new capacity under construction, of which 2,700 MW are expected to be commissioned by the end of 2018
  • The first nine months of the year saw low hydroelectric power production in Spain, 57.2% below 2016 levels
  • This negative impact was partially offset by the good performance of the company’s international networks and renewables businesses
  • US subsidiary AVANGRID’s net profit grew by 14% to $494 million with total shareholder return (TSR) for the year exceeding 38%
  • Neoenergia, the Brazilian subsidiary 52.45% owned by Iberdrola, was a key growth driver

ScottishPower Results

SP Energy Networks:

  • EBITDA: £567.2m - compared to £580.9 Q3 2016 (down 2.4%)

The EBITDA for SP Energy Networks is in-line with expectations, based on the investment phasing for the RIIO-ED1 and RIIO-T1 regulatory settlements. Approximately £660 million is being invested in the Transmission and Distribution Networks in 2017.

Generation and Supply:

  • EBITDA: £46.5m - compared to £187.1m Q3 2016 (down 75.1%)

Domestic electricity demand dropped by 6.8% compared to 2016. Customer gas demand also dropped by 6.6%, due to milder weather in 2017. As a result, the Retail business made a smaller contribution to EBITDA (-£92.9 million). Customer numbers at the end of Q3 2017 were 5.22m against 5.34m in Q3 2016. The Generation business also saw its contribution to EBITDA decline (- £47.7 million) due to less output and lower margins on ancillary services. In both instances, the closure of the Longannet coal-fired power station in March 2016 played a major role.

ScottishPower Renewables:

  • EBITDA: £211.6m - compared to £157m Q3 2016 (up 34.7%)

Total wind power production has increased by 34% so far in 2017, with a 37% uplift in onshore wind alone during Q3 compared to the third-quarter 2016. The £650 million two-year programme to construct 8 new onshore windfarms in Scotland was completed in Q3. ScottishPower Renewables also achieved the milestone of 2 gigawatts of renewable energy capacity in the UK.

Commenting on the results, Keith Anderson, ScottishPower Chief Corporate Officer, said:

“ScottishPower continues to invest heavily to deliver a clean, reliable and fairer electricity system for the UK despite continued political uncertainty".

“Onshore wind power and hydro power have increased significantly, and our £650 million programme to construct 8 new onshore windfarms in Scotland has been delivered. In total, ScottishPower now has over 2 gigawatts of renewable capacity delivering clean energy for our 5.2m customers".

“Our Networks business is successfully investing £660m in 2017, continuing to deliver a reliable service for our customers in line with our agreed regulatory plan. There remains ongoing investment demand to ensure our infrastructure is ready for the next stage of decarbonisation from the transport and heating sectors".

“In Retail, we have more customers on fairer deals than any other Big 6 suppliers and we are the only bigger company to have increased its market share since 2011.  We believe that putting our existing customers before new customers is the best way to compete in this marketplace.  That is why we work hard to reward our customers’ loyalty by getting them on to better deals".

“Our view remains that the proposed price cap will not help to engage those customers who could still find a better deal. It will be bad for consumers, energy companies big and small, as well as investor confidence".  

“The key question the Government needs to answer is whether they still believe customers benefit most from free market competition.  If they do, any intervention must be designed to increase consumer engagement, which is the biggest thing wrong in this sector.  Otherwise, we would urge the Government to opt for a fully regulated market.  We need clarity one way or the other.”

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

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