Iberdrola 2011 Profit Slips 2.3% as EU Economic Growth Slows

Iberdrola SA (IBE), Spain’s biggest electricity supplier, said net income slipped 2.3 percent last year as the global economic slowdown damped demand and that it may miss a profit target for 2012.

The world’s largest owner of wind-energy plants said profit fell to 2.8 billion euros ($3.72 billion) from 2.87 billion euros in 2010, according to a filing today. Earnings before interest, tax, depreciation and amortization rose 1.6 percent to 7.65 billion euros.

“If 2011 was complicated, 2012 isn’t going to be any less so,” Chairman Ignacio Galan said at a press conference in Madrid. “The conditions in our markets have deteriorated significantly.”

The Spanish economy slipped toward a second recession in four years during the second half of 2011 while activity in the U.K. slowed as governments struggled to rein in their borrowing. Profit growth may fall short of the company’s 5 percent target this year should the economic slowdown persist, Galan said.

The stock fell 3.1 percent to 4.52 euros at 12:55 p.m. in Madrid, trading near the seven-year low it reached in September. In comparison, the MSCI Europe/Utilities Index has rebounded 9.2 percent from the lows it reached at the same point.

The European Commission today cut its forecast for the euro-area economy, seeing a 0.3 percent contraction this year compared with November prediction for a 0.5 percent expansion. Spain’s economy will shrink 1 percent while the U.K. economy will slow to 0.6 percent from 0.9 percent in 2011.

Iberdrola’s power output in Spain last year fell by 11 percent and in Britain it dropped 19 percent. In the U.S., Iberdrola’s output rose 14 percent after the company added more than 600 megawatts of renewable-power generating capacity.

Iberdrola said it will maintain the dividend for the year at 32.6 euro cents per share.

To contact the reporter on this story: Ben Sills in Madrid at bsills@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.