Monday, March 4

The president of Iberdrola charges against the tax on energy companies: “We will go to court”

The president of Iberdrola, Ignacio Sánchez Galán, charged this Wednesday against the energy tax processed by Parliament. “We will go to court,” he confirmed to analysts in the presentation of the company’s results.

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The executive has explained that “if this tax is applied”, Iberdrola will appeal it because “it goes against European directives”, which say that the “extra profits” of the companies should be taxed, not the income, as the Government has plated.

“Our attorneys are certainly going to work very efficiently as usual.” The electric company thus joins the chorus of energy companies (such as Repsol or Acciona) that have announced that they will resort to it.

Iberdrola has announced this Wednesday an increase of 29% in its profits, up to 3,104 million euros. The group has reaffirmed its goals for 2022 to reach a new profit record of between 4,000 and 4,200 million in the year. The forecast includes the new tax on the sector, confirmed Galán.

The company assures that its result has been penalized by the 14% drop in profit in Spain, due to the impact of the rise in gas and the increase in costs, “not passed on to customers”, according to its president.

The executive has highlighted Iberdrola’s contribution to public coffers “in a situation like this”: 7,800 million in taxes paid last year, about half in Spain. A money that “helps a lot to the vulnerable”. There is “no reason why they should apply this because we are paying a lot of taxes”, he has insisted. He has stated that Iberdrola is helping to reduce the impact of the crisis on industry and families, with “stable prices for our customers”, who as they renew their contracts “are being affected by the extraordinary surcharges imposed by regulatory decisions”, in allusion to the Iberian solution.

Asked if the appointment of Armando Martínez as the new CEO, the first in two decades, is a succession plan, Galán, who at 72 is going to maintain his executive functions, stated that “it is a sign of continuity” and not “revolution”. “It is nothing new” and it was planned “long ago”.

Galán celebrated that “finally there is a full consensus” among the European Heads of State and Government in pointing to the gas market, which “is not working properly”, as the “origin of the problem” of prices. Meanwhile, “electricity is the solution”, but it requires “accelerating licenses” to renewable promoters, not “penalizing” producers and “providing incentives” to invest and promote long-term contracting (the so-called renewable PPAs). ).

The executive has stated that Iberdrola’s role in the Spanish gas business is residual. “We are irrelevant.” “I don’t know how many customers we have with the regulated and liberalized rates.” The new aid to the regulated rate, with problems in the transfer of clients that Competition is investigating, will have “some impact” that the company is “trying to minimize”. In addition, he has recalled, the aid for gas will be covered by the State.

More dividends

The energy company has approved a first interim dividend charged to 2022 of 0.18 euros per share, 5.9% more, after shooting its turnover by 35.4%, to 37,903 million. Until September, the gross operating profit (Ebitda) grew by 16.7%, to 9,529 million, with a “positive evolution in all geographies” except in Spain, where it fell by 17%, impacted by regulatory and tax measures and the high gas and electricity prices, “which have not been passed on to customers with previously agreed fixed prices,” according to the multinational. Iberdrola states that it has 100% of the production already sold in Spain in 2022, 90% in 2023, 70% in 2024 and 50% in 2025.

Organic gross investments in the period of the group stood at 7,568 million, 14.2% more. 40% went to Networks and 49% to Renewable generation. By countries, Spain and the US received 25%, respectively, Brazil 18% and the United Kingdom 16%. The company adds 10,500 million investment in the last year.

With more than 39,000 megawatts (MW) of installed renewable capacity worldwide, Iberdrola’s wind and solar energy production grew by 13%, raising its total renewable energy production to 55,354 gigawatt hours (GWh), which has offset the lower production hydroelectric due to drought. The group expects some normalization of wind energy production this quarter.

The company noted that 100% of its supply purchases are assured for this year and 90% for 2023, thus avoiding the current tensions of raw materials and exchange rates. Regarding the adjusted net financial debt, it stood at 44,293 million at the end of September, 19% more. The company expects to maintain it at similar levels at the end of 2022 and attributes the increase to the investment effort in the period, the appreciation of currencies and the increase in working capital.

Despite the scenario of interest rate rises, with 75% of its debt at a fixed rate, the group, which is going to present a new strategic plan on November 9, has liquidity of more than 24,000 million, which would allow it to cover its needs without having to go to the market for 27 months.