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Iberdrola Profit Rises to $4 Billion on Power Production

Feb. 24 (Bloomberg) -- Iberdrola SA’s 2010 profit rose more than analysts expected as it generated additional electricity with hydropower plants and wind turbines.

Net income for the world’s biggest producer of wind energy rose 1.6 percent to 2.87 billion euros ($4 billion) compared with analysts’ estimates of 2.84 billion euros, the Bilbao, Spain-based company said. Earnings before interest, tax, depreciation and amortization rose 11 percent to 7.5 billion euros.

The results “reflect the strength of operations,” Antonio Cruz-Guzman said in a note to clients. “Ebitda was higher than the guidance.”

Spain’s largest utility generates more than half its power outside the country after expanding abroad to cut reliance on the domestic market, where demand fell in 2009 and regulators let it recoup only a portion of costs. Iberdrola is trying to sell more assets after buying the U.S. utility Energy East Corp. in 2008 and Scottish Power Ltd. in 2007.

Iberdrola had pretax gains of about 300 million euros from asset sales last year, Chief Financial Officer Jose Sainz said today on a conference call.

The stock rose 0.4 percent to 6.206 euros in Madrid, giving Iberdrola a market value of 34 billion euros.

Carbon-Free Generation

Iberdrola has targeted average annual growth of 5 percent to 9 percent in Ebitda from 2009 through 2012.

Electricity production rose 8 percent to 154,073 gigawatt hours. Half of that power was made without emitting carbon dioxide, the company said in a press release. Hydropower output increased 85 percent while wind turbines generated 18 percent more electricity.

Iberdrola last year said that net investment from 2010 through 2012 may total 16 billion euros as it spends more on renewable-energy projects and networks. Gross investment may climb to 18 billion euros, while asset sales may raise as much as 2.5 billion euros through 2012. Almost two-thirds of the planned gross investment was earmarked for the U.S. and the U.K.

The utility said in February 2009 that it had a “flexible approach to investment” and committed to spend only 9.6 billion euros of the estimated 16 billion-euro net investment through 2012. It targets annual cost savings of 300 million euros by 2012.

Iberdrola last month agreed to buy Brazil’s Elektro Eletricidade & Servicos SA for 1.77 billion euros, gaining power distribution in an economy expanding at the fastest pace in more than two decades.

The Spanish utility’s installed capacity totals 44,991 megawatts, of which natural gas-fired plants account for 29 percent, renewable energy 28 percent, hydropower 22 percent and nuclear plants 7.4 percent. Iberdrola Renovables SA, the company’s renewable-energy unit, increased its capacity to 12,532 gigawatts last year.

To contact the reporters on this story: Ben Sills in Madrid at; Joao Lima in Lisbon at

To contact the editor responsible for this story: Will Kennedy at

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