Friday, September 22

The three large electricity companies shoot their profit by 24% in the midst of the debate on the energy tax

They are the three large listed companies focused on electricity, Iberdrola, Endesa and Naturgy. The three closed the first half of the year, marked by the rise in gas prices, with a joint profit of 3,548 million euros, according to the income statements that have been published in recent weeks. It is 24% more in the same period of 2021.

The new tax will levy 1.2% on income from energy companies and 4.8% on commissions and interest from banks

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The last to reveal how it is doing has been Naturgy, one of the Ibex 35 companies furthest behind when it comes to publishing its financials until June. In these six months, the company chaired by Francisco Reynés has earned 557 million euros after triggering its income.

“The net amount of the ordinary turnover for the first half of 2022 amounts to 16,737 million euros with a growth of 83.4% compared to the first half of 2021, mainly as a result of higher energy prices in the period”, assumes the company in the information that it has sent this Thursday to the National Securities Market Commission (CNMV).

To this Naturgy profitability figure are added the 2,075 million that Iberdrola has earned (36% more than in the same months of 2021) and the 916 million that Endesa reported (10% more). This last figure includes an asterisk. It includes the extraordinary result -182 million- achieved by the sale of its electric mobility business to its parent company, Enel, the electric company controlled by the Italian State. Excluding these extra income, Endesa’s ordinary net profit falls by 11.8%, compared to June of the previous year, to 734 million euros.

Alerts on Spain

In fact, these last two companies, in the midst of the debate on the tax on electricity companies announced by the Government, have highlighted in their presentations to investors that the situation in Spain is not at its best. On the one hand, the chairman of Iberdrola highlighted in the presentation to investors the “positive evolution of EBITDA [el resultado de explotación] except in Spain”, where the benefit would have fallen by 26%, to 822 million, according to company data. At the same time, the CEO of Endesa, José Bogas, justified to analysts the drop in profitability of the business -focused on Spain- due to a “both economic and energy macro scenario [que] It has continued its path of deterioration.

In the case of Iberdrola, the company has submitted its interim financial report to the National Securities Market Commission (CNMV). In it, it states that its operating result in Spain, during the first semester, was 1,067 million euros, when a year ago it reached 1,430 million. On the other hand, the net amount of turnover, its income, went from 7,125 million in the first half of 2021 to 10,141 million attributed to this country for the period between January 1 and June 30. And, also here, there is an asterisk.

“In 2022, the Iberdrola group has proceeded to sell Iberdrola Clientes Internacional to Iberdrola Spain, so the data of Iberdrola Clientes Internacional is included within Iberdrola España,” it argues in its report; although he clarifies that “the comparative information has been restated”.

These results come after the positive evolution of the companies in 2021. In that year as a whole, the three companies recorded a joint profit of 6,533 million euros. It was the highest figure since 2014, due to the price of electricity, although it was not the only factor that increased its profitability. In that 2021, the electricity companies benefited from the Supreme Court ruling that overthrew the hydroelectric canon that the PP Government implemented in 2015. This annulment forced the State to return more than 1,900 million to the companies and charged that amount to the public deficit .

On the tax, the companies have dodged criticism. In the case of Endesa, José Bogas assured investors that the company is “waiting to know the details to evaluate it.” However, he clarified that “we are not transferring the increase in the price of energy to our clients.” Iberdrola also argued that they are not recovering the increases. “The companies that are increasing their profits in Europe are the gas and oil companies, not the integrated electricity companies,” Ignacio Sánchez Galán assured analysts. “We do not have extraordinary benefits. That of gas and oil companies is not the same case”, he repeated.

It must be remembered that the bill presented by PSOE and United We Can contemplates a rate of 1.2% for energy companies (whether pure electricity, gas or oil companies) that will be applied to the net amount of turnover, income of the companies. Those that do not reach 1,000 million euros and those that, having an energy business, do not reach 50% of their turnover, will be exempt. The tax will be charged in 2023 and 2024, on the results of 2022 and 2023.