Iberdrola reports 20% year-on-year profit growth as it hits 2022 target early and installs 3.5 GW of renewables in 2021

Iberdrola chairman Ignacio Galán (pictured) said the acceleration in investment had helped the company achieve higher-than-expected growth. Image: Iberdrola

Spanish utility Iberdrola reported operating profit of 12 billion euros ($13.6 billion) in 2021, up 20% from 2020, and hit its 2022 gross profit forecast a year earlier, as its 3.5 GW of renewable energy was installed in 2021.

In its financial results for the year 2021 published today, the Bilbao-based company recorded an EBITDA of 12 billion euros, which it said was boosted by renewable energy production. However, it suffered from retail activity in the UK and Spain where it decided to maintain fixed prices despite the huge volatility in European electricity markets.

“If customer prices had not been maintained, this figure would have increased significantly,” the company said.

The 20% profit growth for 2021 means the company met its gross profit forecast for 2022 a year ahead of schedule, according to its financial results.

Its net profit increased by 8% compared to 2020 to reach 3.88 billion euros, thanks to good operational performance in the United States and Brazil and new installed capacities.

At the same time, the company also increased its investments to 9.94 billion euros – against 7.03 billion euros for the first nine months of 2021 – of which it allocated more than 4.3 billion euros to energies renewable.

This enabled it to install 3.5 GW of new renewable energy last year, bringing its total installed renewable energy capacity to 38 GW worldwide. Renewable capacity under construction exceeds 7.8 GW.

More than 4.4 billion euros of investments have been allocated to smart grids, representing a growth of 23% compared to the end of 2020, in line with the group’s strategy to reinforce key infrastructures and support electrification. As a result, the company’s regulated assets amount to 33 billion euros, he said.

The United States (2.73 billion euros) and Spain (2.38 billion euros) represent more than half of the investments.

“The acceleration of investments has allowed us to continue to generate strong growth at a higher rate than expected,” said Iberdrola Chairman Ignacio Galán.

In February last year, the company announced plans to double its spending on renewable energy, increasing its investment from 75 billion euros ($91 billion) by 2025 to 150 billion euros (182 billion) by 2030.

In its forecast for 2022, Iberdrola said its net profit should reach between 4 and 4.2 billion euros, representing a 12% increase in profits compared to 2021 if we consider the upper part of expectations.