Iberdrola Chairman to shareholders: Spain is beginning to recover from
Strong US performance helps Iberdrola sustain profits and dividends in 2012
NOTE: all financial results herein were calculated using international
financial reporting standards (IFRS) and converted to Euros where appropriate.
ROCHESTER, N.Y., March 22, 2013
ROCHESTER, N.Y., March 22, 2013 /PRNewswire/ --Iberdrola (IBDRY:US) chairman
Ignacio Galan told shareholders today that despite a difficult economic
environment, Iberdrola again generated solid results in 2012, driven by 35%
net earnings growth in its international operations. The Company was one of
the few European utilities to have maintained profit and dividends to
shareholders since the economic crisis began in 2008.
Addressing the Annual General Meeting in Bilbao, Spain, Galan said strong
fiscal measures taken by the Spanish government in 2012 are beginning to bear
fruit: "The efforts of the Spanish government are being recognized by the
international community and financial markets," he said, adding that this year
will be one of transition for the Spanish economy, with positive growth rates
in the fourth quarter.
"The reforms carried out and others to be introduced in the near future will
boost sustainable growth in the long term and we expect them to have a
positive impact on jobs from the second half of 2014 and increasing in the
following years," he said.
Galan stressed that Iberdrola has remained an engine of growth in countries
where it operates. In 2012, the group hired more than 2,000 employees and 800
interns/trainees, invested €3.26 billion ($4.18 billion USD) to upgrade
technology and infrastructure, purchased goods and services totaling €5
billion ($6.4 billion USD), and provided direct and indirect employment for
150,000 people around the world.
The Chairman also reiterated highlights from the Group's 2012 financial
results ^ which were released last month:
oGroup revenues rose 8.1% to €34.2 billion ($43.95 billion USD), while
gross margin increased 4.6% to €12.58 billion ($16.16 billion USD), and
operating cash flow rose 2.5% to €6.19 billion ($7.96 billion USD).
oEBITDA increased 1% to €7.73 billion ($9.93 billion USD).
oNet earnings rose 1.3% to €2.84 billion ($3.65 billion USD), driven by a
35% international earnings growth
Galan also highlighted the importance of its geographically diversified
portfolio, citing that 70% of the Group's profit was produced outside Spain.
In 2012, Iberdrola revenue makeup was: 30% Euro, 30% British Pound, 30% US
Dollar and 10% Brazilian Real. Company investments were also diversified, with
nearly half (48%) of Iberdrola's total investment spent in the US and UK,
mostly in the regulated and renewables business units which offer stable and
largely predictable revenues.
Galan emphasized that Iberdrola's efforts to strengthen its balance sheet are
working well. In 2012, the Company:
osold €850 million ($1.12 billion USD) of the €2 billion ($2.6 billion USD)
planned of non-strategic assets,
oreduced its debt by nearly €1.38 billion ($1.82 billion USD) to €30.32
billion ($40.0 billion USD),
oincreased operating cash flow 2.5%, and
ogrew liquidity to more than €12 billion ($15.89 billion USD) – enough to
meet its needs for more than three years.
US Subsidiary Operations
Also addressing the AGM, Iberdrola Chief Operating Officer José Luis San Pedro
commented on the US networks business operated by Iberdrola USA. San Pedro
paid special attention to the new transmission system being built in Maine by
Central Maine Power (CMP). He described the $1.4 billion Maine Power
Reliability Program as "an important contribution to improving network
reliability for customers." Construction on the project, which now employs
nearly 3,500 workers, has passed the halfway point and continues on time and
on budget. The five-year program is the largest energy infrastructure project
ever undertaken in Maine. It includes the construction of six new substations,
upgrades to more than 40 existing substations, and the installation or
rebuilding of nearly 440 miles of transmission line in 75 communities.
San Pedro also mentioned the successful completion of CMP's advanced meter
initiative (AMI) in Maine where the company installed 620,000 'smart' meters
and the associated mesh network. CMP now gets 98% of its monthly billing data
electronically from smart meters, has eliminated nearly 2 million
meter-reading vehicle miles per year, and provides customers with detailed
online reports about their energy use. This was the largest single smart-grid
project ever completed by Iberdrola, and the group intends to share the
learning from it throughout its worldwide network.
The three US subsidiaries – CMP in Maine and RG&E and NYSEG in New York, were
also faced with unprecedented recovery work in the wake of Superstorm Sandy,
one of the largest and most powerful to have hit the country in recent times.
The three companies deployed more than 6,000 people to manage a cumulative
total of nearly 500,000 electricity service interruptions. Once their own
customers had been restored, they released nearly 1,800 line, bucket,
pole-setting, digger, tree, gas and supervisory employees and contract workers
to assist other utilities. For these efforts, each subsidiary won both the
Edison Electric Institute 2012 Emergency Recovery Award and the Emergency
Iberdrola USA Financial Performance
Iberdrola USA had its best collective performance since becoming part of the
Iberdrola Group. Galan noted that the positive US performance was underpinned
by GDP growth of 2.3% in 2012, which the IMF projects will grow 3% in 2014. He
said performance of Iberdrola's networks businesses in New York and Maine was
supported by stable regulatory frameworks in both areas. As reported,
Iberdrola USA 2012 gross margin was up 10% to €1.42 billion ($1.83 billion
USD), driven by scheduled rate increases and a favorable currency exchange
rate. EBITDA increased more than 20% from 2011 to €660 million ($848 million
As a result of continued strong financial performance, Standard & Poor's
upgraded Rochester Gas & Electric Corp's senior unsecured credit rating from
"BBB" to "BBB+" and Moody's upgraded NYSEG senior unsecured credit rating from
"Baa2" to "Baa1".
Investment in Technology and Infrastructure to Continue
In 2012, Iberdrola USA invested nearly $1 billion in its electric and natural
gas delivery systems in Maine and New York. This included spending more than
$500 million in Maine to finish the AMI project and continuing construction on
the Maine Power Reliability Program. In New York, NYSEG and RG&E combined to
invest more than $440 million on improving, expanding and automating its
electric and natural gas systems.
Going forward, Iberdrola has set a priority on upgrading and expanding
networks, continuing renewable generation projects, increasing the efficiency
of its systems and providing better reliability and other benefits to its
customers. The Group plans to concentrate the largest part of that spending in
the US and UK in the renewables and networks sectors.
Investing in our Communities
In addition to investing in its infrastructure in 2012, Iberdrola USA also
invested in the people and communities where it operates. In New York, the
networks subsidiaries contributed more than $23 million in economic
development funds to upstate businesses, including $7.4 million in emergency
relief for commercial customers who had suffered damages from hurricane Irene
and tropical storm Lee.
The Iberdrola USA Foundation, in conjunction with the Iberdrola Fundacion in
Spain, provided two post-grad and doctoral scholarships for studies in
renewable energy, environmental protection, climate change and energy
efficiency at the Rochester Institute of Technology and the University of
Maine, plus contributed $100,000 to Binghamton University to boost hands-on
educational opportunities for engineering students.
About Iberdrola USA: Iberdrola USA, a subsidiary of global energy leader
Iberdrola, S.A., is an energy services and delivery company serving about 2.7
million customers throughout upstate New York and New England. For more
information about Iberdrola USA, visit www.iberdrolausa.com. For more
information about Iberdrola S.A., visit www.iberdrola.com.
SOURCE Iberdrola USA
Contact: Dan Hucko, Daniel.Hucko@IberdrolaUSA.com, 585.724.8825
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