Iberdrola closes a historic capital increase to grow in the US and UK

MadridIberdrola reaffirms its commitment to the United States. And also to the United Kingdom. The leading electricity company in Spain has completed a historic capital increase of €5 billion to address investments in these two markets, as announced this Wednesday by the National Securities Market Commission (CNMV). Following the announcement, the Spanish stock market regulator has decided to suspend its listing. A capital increase occurs when a company decides to increase its resources to finance new projects, as is the case with Iberdrola, or reduce its debt, and can be done in different ways (from issuing new shares to using retained earnings). To understand the magnitude of the figure proposed by Iberdrola, it is worth considering that it represents 5% of its stock market value, which is around €100 billion.

The company chaired by José Ignacio Sánchez Galán has long focused on growing abroad, including the United States, especially after divesting itself of almost all of its electricity generation business in Mexico in 2023. Sánchez Galán has stated on more than one occasion that the US market is "very attractive" in terms of regulation, even with the arrival of Donald Trump to the White House, with whom he coincided at the state dinner held in Qatar last May, and his tariff policy.

Iberdrola plans to invest $20 billion in the country by 2030 to modernize, deploy, and digitize its electricity grids (it also plans to do so in the United Kingdom), because the company sees the return on its investment as more attractive. In fact, of the €5.662 billion invested between January and June, 60% went to these two markets. Spain is currently immersed in a debate over the rate of remuneration for this infrastructure (investment to improve and expand the transmission grid, but also the distribution grid). In Galán's view, the CNMC's proposal for a 6.46% remuneration rate "sends clearly negative signals."

The capital increase was announced on the same day that Iberdrola reported its earnings for the first half of the year (between January and June). The utility earned €3.562 billion, 13.8% less than the same period in 2024, when it recorded the multi-million-euro capital gains from the sale of its Mexican business. EBITDA (gross profit) also fell by 14%, to €8.286 billion. In this case, growth in the United States, but also in the rest of Europe, offset the decline in Iberdrola Spain, according to the company.

Record profits for Naturgy

Naturgy was the other energy company to present its half-year results this Wednesday. The gas company earned a record €1.147 billion between January and June, 10% more than the same period last year, thanks to rising energy prices (for gas and electricity). With these results, Naturgy expects to surpass its record annual profit and reach €2 billion.In 2023, it was close to reaching this figure.–.

These are the company's first results after the presentation of the new Strategic Plan for the period 2025-2030 and launching a self-investment offer. over 10% of the share capital to achieve greater liquidity. With Wednesday's figures, Naturgy expects to achieve its objectives sooner than expected and could already increase the dividend to 1.9 euros per share if it maintains 10% of its treasury stock.

The gas company has reported that gross operating profit (EBITDA) stood at 2.848 billion euros. 47% of this EBITDA is explained by the regulated business (energy transmission and distribution infrastructure, both gas and electricity) and the remainder by the liberalized business (53%). The company made investments worth 900 million, primarily to strengthen its electricity grid.

The aftermath of the 'no' in the energy decree

However, this Wednesday wasn't all good news for the energy sector. With the hangover from the Spanish Congress's rejection of the Spanish government's energy decree, publicly traded companies (Endesa, Naturgy, Redeia, Solaria, and Iberdrola) closed the day with shares down between 1% and 4%.

Beyond the image of weakness from the Spanish government left by Tuesday's plenary session, companies saw measures aimed at strengthening the Spanish electricity system derailed, especially with a view to avoiding a new massive power outage like the one on April 28. In this regard, Iberdrola has once again distanced itself from any responsibility for the massive blackout. In the documentation submitted to the CNMV, the utility indicates that "internal and external experts within the group concluded that the group's companies were not the cause of the power outage nor did they contribute to it."