Powering more than 30 million homes and businesses in Spain, the United States, Brazil and Britain brought in net profit of 1.26 billion euros ($1.37 billion) in the first quarter versus a Refinitiv SmartEstimate of 1.20 billion
MADRID: Ready cash, multi billion-euro investments, price hedging, regulated networks business and capital gains should help global wind power producer Iberdrola defy the impact of the new coronavirus to boost profit at a high single-digit rate in the full year, the company said on Wednesday.
Despite the demand-sapping spread of the virus, which has infected more than 3 million people worldwide and brought to a halt entire economies including its home market Spain, Iberdrola also maintained a pledge to invest 10 billion euros this year.
Powering more than 30 million homes and businesses in Spain, the United States, Brazil and Britain brought in net profit of 1.26 billion euros ($1.37 billion) in the first quarter versus a Refinitiv SmartEstimate of 1.20 billion.
This included a 289 million-euro boost from the sale of a stake in wind turbine maker Siemens Gamesa, a one-off bonus Chief Executive Ignacio Galan said gave the company “headroom” to alleviate the impact of the disease.
Without that impact, the company said net profit rose 5.3 per cent, helping reinforce liquidity which will cover it for around 30 months.
Its stock price fell just under 1 per cent in early trading but recovered to hover near 9 euros – almost flat to the start of both the day and the year. Shares had already recovered from a tumble along with the rest of the Spanish bourse in early March when the government moved to put the country under lockdown.
Peers have had a far rougher ride in that time: Europe’s utility sector index, has shed almost 12 per cent of its value.
Hedges are in place to manage price changes for 100 per cent of electricity sold in 2020, and more than 75 per cent of that sold in 2021. Wetter weather has helped fill reservoirs where pumping water can be used to store excess power.
RENEWABLES FOR THE RECOVERY
Around 40 per cent of 2020 investments are destined for Iberdrola’s renewables business.
Coronavirus-related shutdowns have caused delays in the order of a few weeks to some renewables projects, but not enough to have a material impact on its plans for the year, the head of the company’s renewables unit, Xabier Viteri, told Reuters.
Previously-laid out plans for dealing with potential supply chain disruptions helped avoid equipment shortages at the roughly 50 sites where the company is building wind farms and solar plants, Viteri said.
“This is an exercise we did months ago when we were facing the hard Brexit case, we were also prepared to be ready to overcome minor disruption,” he said.
Outside Europe, agreements had been reached with authorities in Brazil and the United States, which allowed work to continue, Viteri said. In Spain, the pandemic did not stop the connection of a 500 megawatt (MW) solar plant to the grid in April.
Like other power providers in Europe, Iberdrola has had to innovate to keep critical infrastructure running while guarding employees as much as possible from infection.
“We can monitor all the operations of all the assets worldwide from our electrical control rooms,” Viteri said, adding operations could be moved “even to private premises”.
In the longer term, “the power sector could be a big driver of this acceleration, of the recovery” from the crisis, he said.
($1 = 0.9214 euros) (Reporting by Isla Binnie; editing by David Evans)