Iberdrola might bid for British Electricity North West (ENW). The Spanish company’s announcement comes after reports of its significantly improved net profits and dividend by the end of the year. The group announced a 12 percent rise of its EBITDA.
Chairman and CEO Ignacio Sanchez Galan stated that the company was assessing ENW’s bidding process. “We have not decided yet whether we will make a bid yet” he told analysts during a phone conference.
ENW and Iberdrola present in the UK
ENW is one of fourteen distribution network operators in the United Kingdom regulated by the Office of Gas and Electricity Markets (Ofgem), the State regulator of electricity and natural gas markets in Great Britain.
The company is responsible for maintaining and upgrading 13,000 km of overhead powerlines and over 44,000 km of underground power cables, which covers communities like the Lake District to the city of Manchester.
In order to maintain these services, the firm announced it will invest 1.9 billion pounds (€2.2 billion) by 2023.
Meanwhile, Iberdrola, the largest utility in Spain, has a network that covers more than 100,000 kilometers in the United Kingdom and has over 5.5 million customers to whom it provides electricity and gas.
Iberdrola supplies energy for more than 30 million people around the world.
A positive first quarter
Iberdrola announced its 1Q 2019 results exceeded the highest market expectations, obtaining net profits of €963.7 million, up by 15 percent from last year. Estimates indicated a more modest rise, with the most optimistic forecast pointing to a €910 million increase.
ETEnergyworld | Top wind energy firm Iberdrola raises outlook after strong Q1 https://t.co/7AUWlV2iAW
— Sudheer Pal Singh (@Sudheerpalsingh) April 25, 2019
On the other hand, the company’s EBITDA went up by 11.9 percent to €2.5 billion, also exceeding expectations. Bernstein analysts told customers that the company’s Networks EBITDA beat expectations by 10 percent.
The group indicated it expects to reach “high digits” growth (7 to 9 percent) in profits and dividend, compared with the 4 to 6 percent it forecasted before.
Also, Iberdrola said that over 11 percent of its core profit was generated by Neoenergia, the Brazilian unit set to be listed in the Sao Paulo stock market this year.
Results boosted by market growth
For this Spanish company, the positive turn in this first quarter stems from the strong presence of its network businesses, which have allowed it to raise its outlook.
For his part, Ignacio Sanchez Galan assured that “these results, together with the evolution of our different growth initiatives, reaffirm our positive outlook for the whole of 2019.”
— Peter Eriksson (@peteroferiksson) April 25, 2019
The executive explained there are a series of factors that lead it to be positive. In this sense, it mentioned the increased tariffs in Brazil, as well as higher installed capacity in Mexico. Similarly, it highlighted the efficiencies obtained and the growth of demand.
Other relevant factors include the rise in offshore wind production, where the Wikinger wind farm (Germany) made important contributions.
Additionally, improvements in its Generation and Customers business in Spain also played an important role.
Iberdrola’s net adjusted debt stood at €35.5 billion in March, up by €2.4 billion.
The Ibex 35 closed higher on Thursday, reaching 9,500 points supported by the positive reaction to Iberdrola’s financial results. The energy group was among the top-ranked companies with 4,301 percent, which came after the announcements of improved its outlook and a rise of the EBITDA in 1Q 2019.
For more information, check Energía16