Iberdrola´s 9-months results have been negatively impacted by
increased regulatory costs in Spain and the UK as well as other
factors which have led the Company to reduce shareholder remuneration.
Positive business activity, including efficiency gains, have reduced
the impact on Ebitda to a net €240 million.
These positive business developments plus improved efficiency also
helped limit the reduction in net earnings to 3% to €2,775 million.
Ebitda is down 4.1% to €5,542 million. According to last results presentation, gross margin was up 1.8%
to €9,459.2 million with growth in all sectors except Brazil.
Operating cash flow (FFO) was €4.41 billion and exceeded investments
of €2 ,167 million, of which €1,321 million were on networks, €580
million on renewables, €193 million on generation and supply and €73
million on other businesses and the corporation.
Another significant factor was a continuing increase in levies of 45%
during the period to €1,267.6 million. Of this amount, €792 million
correspond to Spain where this item doubled over the nine months. Of
the €1.01 billion impact on Ebitda, a gross €503 million related to
the recent energy reform approved in Spain. Of this amount, €363
million were for generation and supply, €79 million for networks and
€61 million for renewables. This amount excludes considerations under
Royal Decree Law 9/2013 on remuneration for renewables which is
Sustainability of shareholder remuneration policy
The sustainability of its shareholder remuneration policy is a
priority for Iberdrola, with the goal of achieving the maximum returns
possible, while being sustainable and compatible with the objectives
of financial strength.
In this respect, it views a payout of between 65% and 75%, similar
to other companies with a comparable profile, as compatible with
sustainability and future growth of shareholder returns.
Thus, under its Iberdrola Flexible Dividend programme, the
repurchase price for subscription rights under the next scrip dividend
plan, payable in January 2014, is set at a minimum gross figure of
€0.125 each. This price is 10% lower than that set at the same time
The Company is considering the option of amortizing Treasury
stock to compensate the dilution associated with new shares.
Balance sheet strength
Iberdrola continued to make progress during the nine months
in strengthening its balance sheet and realizing its 2012-2014
At the end of September, Group net adjusted debt – excluding
the €2,024 pending reimbursement from the tariff deficit –
came to €26,526 million. Including the deficit amount, the
debt stood at €28.55 billion.
Gearing stood at 43.1% excluding the deficit, against 45.9%
for the same period last year.
Results from financial operations improved 10% to bring net
financial expenditure at €879.7 million, fruit of steps that
have reduced average debt by 6.8%, improved financial costs
and developed a currency hedging programme which nearly offset
negative exchange impacts.
Iberdrola continued to improve its financial ratios, with
funds from operations (FFO) to net debt standing at 22.1%,
retained cash flow (RCF) to net debt at 18.8% and net debt to
Ebitda reduced to times 3.5. These figures exclude the tariff deficit.
For more information, you can look at our quarterly results report.