Spain-based independent power producer Iberdrola recorded a net profit of €1.5 billion (~$1.6 billion) for the first quarter (Q1) of the financial year (FY) 2023, an increase of 40% on a year-on-year (YoY) basis.

The company said that the profit growth is attributable to improved performance in the European Union due to the normalization of production and fewer energy purchases at a lower cost YoY, as well as the growth in renewables and grids.

The company posted revenue of €15.46 billion (~$16.9 million), an increase of 27.2 % YoY.

The company also recorded increased output from wind, solar, hydro, and nuclear compared to Q1 2022, which met customer demand.

EBITDA increased by 38% to €4.1 billion (~$4.5 billion), mainly due to geographic diversification, a larger asset base in networks across all countries, and the normalization of wholesale and retail markets, the company said,

A-rated geographies, including the EU, UK, U.S., and Australia, contributed to 80% of EBITDA.

A robust operating cash flow of €3 billion (~$3.2 billion) in a single quarter led to a steady net debt figure and continuous improvement of financial ratios.

The company said that in 2023, planned organic investments are set to increase to €12 billion (~$13.1 billion).

Co-investment Partnerships 

The company noted that approximately 60% of the planned renewable capacity is either under construction or has been secured. Additionally, agreements or advanced negotiations were made for nearly 100% of network investments under frameworks.

As part of the asset rotation and partnership goals, Iberdrola has reaffirmed its commitment to customers and decarbonization by agreeing to sell 60% of its business in Mexico for $6 billion.

Furthermore, the company said it is accelerating its investments by scaling up co-investment partnerships. This includes an alliance with GIC, Singapore’s sovereign fund, to co-invest in transmission in Brazil following a recent partnership with Norges Bank.

The company’s installed renewable capacity was recorded at more than 40,000 MW, indicating a 5.3% increase from the same period last year.

Notably, solar PV capacity rose by 40%, reaching 4,576 MW due to new installations in Australia, Spain, the U.S., and Brazil, while onshore wind increased by 4%, reaching 20,202 MW.

The company’s emission-free production ratio reached 84%, with Spain achieving 90%. The company has also made progress in offshore wind, with 3,500 MW under construction, representing a total investment of €11 billion (~$12 billion).

The Saint-Brieuc offshore wind farm in France is anticipated to begin operation in May, with commercial operation expected by the end of the year.

The Vineyard Wind in the U.S. is expected to produce its first power output before year-end, and the Baltic Eagle in Germany has already installed the offshore substation.

The company has also secured significant power purchase agreement (PPA) contracts with Amazon Web Services, Mercedes, and Meta, enabling them to establish routes to market for new onshore and offshore renewables in the EU and U.S.

The company secured sales of 116 TWh (95% of production) through contracts with retail and SME customers, long-term PPAs, and regulated mechanisms.

Iberdrola had received  €150 million (~$159 million) million) green loan agreement from the European Investment Bank to develop a portfolio of renewable energy projects in Italy.

Last November, Iberdrola announced an investment plan of €47 billion ($50 billion) for energy transition between 2023 and 2025. Of this, €17 billion ($19 billion) will be invested in renewables to deliver 52 GW of installed capacity by 2025.