Iberdrola SA, Spain’s largest utility, said first-quarter profit rose 8.4 percent, aided by asset sales in Brazil and Portugal and higher power generation.
Net income increased to 953 million euros ($1.3 billion) from 879 million euros a year earlier, the Bilbao-based company said today in a statement. That beat the 933 million-euro average estimate of four analysts surveyed by Bloomberg.
“The first quarter has been marked by a good operating performance,” Chairman and Chief Executive Officer Ignacio Galan said on a conference call.
Iberdrola, which is shifting investments from its home market to the U.K., U.S. and Latin America, plans to spend 9.6 billion euros on projects by the end of 2016. A drop in power demand in Spain and a change in the government’s method of calculating consumer prices is weighing on the revenue outlook, forcing the company to consider asset sales of as much as 500 million euros in the next three years.
The shares advanced 0.7 percent to 5.035 euros at the close in Madrid trading, valuing the company at 32 billion euros. The stock has gained 23 percent in the past year.
Production increased 9.1 percent, with the biggest gain in hydroelectric generation, Iberdrola said. Gross profit grew 1 percent to 3.39 billion euros as the gains from higher power production were eroded by regulatory effects in Spain, it said.
Effect of Reforms
Spanish policy changes, mainly targeting renewables, will cut the company’s 2014 gross profit by an estimated 656 million euros, Iberdrola said in a presentation.
The utility gained 76 million euros from the sale of its stake in Energias de Portugal SA and a similar amount selling Itapebi in Brazil, it said. The company, which planned to raise 2 billion euros in the two years to 2014 through divestments, reached its target before scheduled following the disposals.
Iberdrola is studying further potential sales, it said yesterday without identifying the assets.
Net debt fell to 25.7 billion euros by the end of March from 26.8 billion euros at the end of 2013.