Iberdrola boosts profits despite Covid hit to power demand

Iberdrola, the world’s third largest utility, has raised its dividend and expanded its investment plans after profit rose in 2020, despite a fall in electricity demand in Europe and the US owing to coronavirus restrictions.

The Spanish group has continued to spend during the crisis, sealing a string of international acquisitions last year.

On Wednesday the company posted a 4.2 per cent rise in net profit to €3.61bn, in line with analysts’ expectations, despite a drop in electricity demand of more than 5 per cent in some key markets including Spain and the UK.

Profits were helped by a gain on the disposal last year of its 8 per cent stake in wind turbine manufacturer Siemens Gamesa for more than €1bn.

Iberdrola estimates profit growth would have been 10 per cent higher had it not been for the crisis.

The company – now referred to by some analysts as a “new energy major” owing to its investments in renewables such as wind and solar – raised its dividend 5 per cent to €0.42 a share and expects to increase it further in 2021 to €0.44 per share. It forecast net profit this year of €3.7bn-€3.8bn.

Iberdrola is expected to be among the major corporate beneficiaries in Spain of EU coronavirus recovery funds, and said on Wednesday that it would invest €150bn by 2030, building on an existing pledge to spend €75bn by 2025.

Ignacio Galán, Iberdrola’s chairman, said the investments would “triple our renewable capacity and double our network assets”.

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