Iberdrola profits rise, boosted by renewables

Spain's number one energy company Iberdrola posted a 4.1 percent rise in 2015 net profits to 2.421 billion euros on higher demand and a rise in renewables business Wednesday while downplaying the potential effect of a British exit from the EU.

Sales rose 4.6 percent to 31.418 billion euros while earnings before interest, tax and amortisation (Ebitda) was up 4.9 percent to 7.305 billion euros partly on the back of an 18.6 percent rise in renewables share.

The overall performance was largely in line with analysts' forecasts, although shares in the firm were off 0.8 percent at 5.91 euros in mid-morning Madrid trading.

As well as Spain and Mexico the group also has a strong presence in the United Kingdom and the United States, which it has pinpointed as key markets, as well as Brazil.

Although Spain remains its main market accounting for 1.44 billion of Ebitda, the possibility that Britain might exit the EU club has exercised minds -- but should not have a big effect in a highly regulated sector which is largely shielded from political instability, CEO Ignacio Galan said.
Galan's own country is experiencing political instability with December's general election having failed to produce a government but he told Bloomberg TV that tight regulation would offset uncertainty as Madrid moves slowly towards a new Socialist-led administration.

"A certain instability in any market is not the best situation. But in our case all the regulation in the energy sector has already been done in recent years," said Galan, whose group posted net group debt of 27.9 billion euros at year end, taking into account its US division's recent purchase of the UIL Holding Corporation, a US energy delivery company.

On potential currency fluctuation should Britain leave the EU, Galan added that exchange rates had already been covered for 2016 should that move become a reality.

Britain is Iberdrola's second destination for investment behind the United States. The company plans to make total investments to the order of 24 billion euros worldwide over five years -- one third earmarked for renewables.

Of that, the currency breakdown shows a 35 percent share in sterling - compared with 43 percent for the dollar and 20 percent for the euro.

Galan stressed that his firm had already fixed its investment plans with UK regulators Ofgen through to 2023.

He added that the company would seek to continue a 15-year strategy to increase its dividend in line with increasing results to keep the company on a solid growth path.