Iberdrola takes the first step towards meeting its 2018-2022 Forecasts
The Iberdrola Group has taken its first step towards meeting its 2018-2022 Forecasts, which will involve an investment of 32 billion euros during the period. With this plan, the group is updating its Strategic Forecasts 2016-2020, to include the investment plan for the Brazilian affiliate Neoenergia, and is laying the foundations for sustainable growth during the next decade.
The milestones for the First Quarter 2018 have been:
- USA: NECEC transmission project selected for interconnection between Canada and Massachusetts; start of new Southern Connecticut Gas rate plan (January 2018-2020).
- Spain: 99% of the Smart Networks Project (STAR) smart meters installed.
- Germany: Wikinger offshore wind farm (350 MW) fully operational.
- UK: East Anglia ONE, commencement of land-based civil works and construction at sea.
- Brazil: 61 MW of additional capacity.
GENERATION AND RETAIL
- USA: divestment of gas trading and storage businesses.
- UK: 20.4% of smart meters installed.
- Mexico: commissioning of San Juan cogeneration plant and repowering of Monterrey.
First Quarter results clearly reflect the positive impact already as a result of the new investments undertaken by the company, the efficiency plans and the return to normal of operating conditions in Spain and the UK, which offset the negative effect of the exchange rate.
In this context, Iberdrola can anticipate EBITDA of more than €9 billion and net profit of close to €3 billion for full year 2018.
These results will be underpinned by strong growth in all businesses: new tariff frameworks in the US and Brazil and efficiency plans will boost the networks business; the new operating capacity, the increased production and the increase in hydroelectric reserves and wind conditions will improve the performance of the renewables area, while generation and retail activities will benefit from the positive effects of the increase in demand, new capacity and greater production.
Likewise, by the end of the period net profit is expected to reach between 3.5 and 3.7 billion euros and the operational cash flow (FFO), 42 billion euros. As planned, over 90% of the 32 billion euros of investment will be earmarked for regulated or long-term contract activities, areas that will produce more than 80% of the EBITDA in 2022, between 11.5 and 12 billion euros. By the end of the period the group will have increased its installed renewable capacity by 24% to 36,000 MW.
Such progress will allow a continuation of Iberdrola's shareholder remuneration policy, growing in line with results, with a pay out between 65% and 75% of the consolidated net profit, and keeping the current number of shares at 6.24 billion, meaning a dividend per share of around 0.40 euros in 2022.