Iberdrola reaffirms 2026 outlook after first-half profit soars

By David Latona

MADRID, July 22 (Reuters) - Spanish utility Iberdrola reaffirmed its full-year guidance on Wednesday after higher investment in electricity networks in Britain, the United States and Brazil boosted first-half profit.

Reported net profit reached €4.34 billion ($4.95 billion) between January and June, up 22% from the €3.56 billion in the corresponding period last year and exceeding analysts' average forecasts.

The jump was also partly driven by capital gains from the sale of thermal power plants in Mexico to Spain's Cox group.

Iberdrola therefore maintained this year's outlook for adjusted net profit growth above 8% - but added the modifier "comfortably" to its wording.

Chairman Ignacio Sanchez Galan told analysts he expected the positive dynamics seen in the second quarter to persist through the rest of 2026.

Shares in Iberdrola were flat by 0945 GMT with the Spanish blue-chip index was up 0.7%, though they have risen 18.6% year-to-date.

Net profit excluding the Mexico divestment rose 8% in the first six months of the year, while adjusted earnings before interest, tax, depreciation and amortisation increased 7% to €8.05 billion.

The dividend per share stood at €0.685, including €0.427 to be paid on July 27.

INVESTMENTS BOOST

Iberdrola said first-half investments rose 25% to €7 billion, with more than 70% of the total focused on Britain, the U.S. and Brazil. Investment in networks increased 42% to nearly €4.4 billion, or close to two-thirds of total investment.

Investment in generation exceeded €2.2 billion — more than 70% of it in onshore and offshore wind — and Iberdrola installed more than 1.6 GW of capacity during the period, it said.

On Tuesday, the utility said it had acquired Caruna, Finland's largest electricity distribution company serving more than 20% of the Nordic country's population, valued at €5 billion. 

Renta4 analyst Angel Perez described the deal as a good strategic fit that would improve cash-flow visibility while preserving financial strength on a regulated growth platform.

PM BURNHAM'S EXAMPLE

Sanchez Galan said the priorities of new British Prime Minister Andy Burnham were "absolutely aligned" with the company's plans there, based on his experience when Burnham was mayor of Greater Manchester.

He also cited Burnham's pledge to remove the value-added tax from domestic electricity ‌bills, saying EU countries should follow his lead in lowering taxes to become less reliant on fossil fuel imports and ensure the quality of the grid.

"If we want to electrify the economy and make the grid's availability more robust ... we absolutely need to revise our taxation of electricity," he said. 

($1=0.8765 euros)

(Reporting by David Latona; Additional reporting by Jesús Aguado and Emma Pinedo; Editing by Joe Bavier and Clarence Fernandez)