Iberdrola Maintains Its Growth Objectives For 2020

Iberdrola's mix is "coherent" with global energy policiesIberdrola's Chairman Ignacio Galán

At Iberdrola’s Annual General Shareholders’ Meeting last Thursday, Chairman Ignacio Galán announced that, for the time being, the group is maintaining its 2020 targets for Investment, Net Attributable Profit and Dividend. On 26 February, Iberdrola presented its 2019 results and announced its 2020 guidelines.

At that time, Galan said he expected Net Attributable Profit to grow at a “high single-digit” rate in 2020, thanks to record investments of over 10 billion euros. The firm’s dividend is seen increasing in line with profits, the chairman added.

At Iberdrola’s AGM, Galán said that the company “will accelerate investments as soon as possible to contribute to economic activity and prevent job destruction”. Of course the most appropriate security and health measures will be applied for all those who help to carry them out.

These investments will allow at least half of the 9,000 megawatts (MW) of new capacity currently under construction to become operational during 2020.

Bankinter analysts said the statements from Iberdrola’s chairman about “high single-digit” profit and dividend growth for 2020 may appear “somewhat optimistic, given the current context of uncertainty about the depth and duration of the Covid-19 crisis.” In any event, it is good news and experts highlight a couple advantages Iberdrola has:

First, the robustness of Iberdrola’s business model (51% of Ebitda from the regulated electricity distribution network business, 25% from renewables and the rest in generation and marketing) and secondly its capacity for growth, based on factors less vulnerable to the economic cycle.

Iberdrola is one of the best performing European and Spanish stocks in 2020, with a decline of just 2.3% vs a 25% drop for the EuroStoxx 50 and 31% for the Ibex-35.