Saturday, December 4

Iberdrola will earn € 2,347m in the quarter of the ‘Villarejo case’

Iberdrola will present on October 27 a profit reported until September of 2,347 million euros, 12.4 percent less than a year ago, according to consensus estimates.

The quarterly results, in any case, will presume to overcome without trauma the reputational problems of the ‘Villarejo case’ that arose during the period. All the lines remained outside the judicial situation of Ignacio Sánchez Galán during the summer.

The cut in profit is due to the fact that in the same period last year it calculated an extraordinary of 485 million euros for the capital gain from the sale of its stake in Siemens Gamesa.

Adjusted net profit, which excludes these items, will rise 6.17 percent, to 2,711 million, from 2,553 million in the first nine months of 2020. EBITDA will grow 10.5 percent, to 8,120, 4 millions.

But the items that will register the highest growth will be ebit, with an increase of 18.64 percent to 4,731 million, and income, which will increase 15.23 percent to 27,942 million.

No significant impacts

The results of a year ago were impacted by Siemens Gamesa and Covid-19. Those of the first half of this year, again, by Covid-19, Filomena and by the rise in corporate tax in the United Kingdom, which goes from 19 percent to 25 percent.

The sources consulted by point out that for the third quarter of the year no significant impacts on results are expected beyond the increase in energy prices.

They recall that Iberdrola will generate a capital gain of 150 million euros by recovering the hydroelectric tax canon related to the 2013 and 2014 academic years.

From Barclays point out that the market must remember the provision of 450 million euros in the United Kingdom for the new tax charge in the country that was already announced in the second quarter.

The regulation will come into force in 2023, but the electricity company is already accounting for it.

1 billion profit to meet goals

And is that the energy company earned 18.4 percent less in the first semester of this year, compared to the first six months of last year, due to the rise in corporate tax in the country, which goes from 19 percent to 25 percent. cent, among other aspects.

Despite this, the utility commanded by Sánchez Galán maintains its goal of achieving a net profit of between 3.7 and 3.8 billion euros this year.

If the market consensus estimates are met for the first nine months, Iberdrola will have to sign a little more than 1,000 million profits in the last quarter to meet your guides.

Shareholder remuneration is another of the points that Iberdrola has not touched despite the fall in profits until June and, at the end of the semester, the remuneration in charge of the 2020 accounts rose 5.5 percent, to 0.422 euros per share.

Back to the confiscation of profits

Investors will pay special attention to the company’s guidelines to see if it maintains the same objectives or modifies them after the announcement of a decree law that could confiscate part of the profits.

“The modifications may come from the side of the increase in energy prices as per the new government decree for the sector,” they explain from Renta 4 Banco.

They add that when the sector is in full negotiations with Minister Teresa Ribera “it is very difficult” for the company to offer visibility in this regard.

The Government proposed, at the beginning, a cut to the so-called “benefits fallen from the sky” of 2,600 million joint for the sector, but it could remain in borage waters if it is exempted from tax charges to energy companies that offer flat rates independent of the wholesale price of energy.

Therefore, from JP Morgan, which foresees “robust” results and with a “strong momentum” thanks to the quality of its assets, urge investors to pay “full attention” to the comments made by the company on the state of the wholesale gas market and remember that the board of directors will meet the day before the presentation of results.

The US entity is clear that the impact of gas prices “they can be compensated with a public intervention in favor of the sector”, as could happen if the Government backs down and premiums fixed prices.

The triumph of diversification

Experts estimate that Iberdrola’s results will once again reflect the quality of its assets, which is “above average thanks to the combined exposure in the networks, renewable energy and developed markets,” they point out from JP Morgan.

Analysis that coincides with that of Barclays, which points to “balanced” contributions between activities and geographies that give rise to a “valuable” business mix with “proven management capacity”.

However, they believe that Iberdrola is “One of the best models in the sector” and that the price does not reflect “the strong ambitions for growth in renewables.”

On the other hand, in JP Morgan they do estimate that the stock is taking this situation favorably. “The combination of assets is being recognized to a great extent by the majority of investors positively”.