Price Revision Lifts Iberdrola
Power-oriented Spanish utility Iberdrola said July 20 that its 1H 2017 profit rose by 4.2% year on year to €1.52bn ($1.75bn), of which 11% was from cheaper gas. It said the €168mn year on year gain was from a cut in long-term contractual gas pricing from a number of undisclosed companies. These are understood to include Nigeria LNG, Algerian state Sonatrach, Qatargas, Statoil (Snohvit LNG) and Eni but the company said it could not say which, owing to confidentiality clauses.
Overall 1H 2017 earnings before interest, tax, depreciation and amortisation (Ebitda) in Spain fell by 12.4% to €662mn, owing to higher generation costs and taxes and lower hydro-electric production.
In the UK, retail gas earnings suffered from lower margins and milder weather hitting sales, but its Scottish Power subsidiary’s customer count was similar to that of 1H 2016. UK earnings were down 76% to just £49mn ($63.4mn), as less power was produced. Iberdrola said the closure of Longannet, Scotland’s last coal-fired plant, in March 2016 alone meant that £30mn less was earned year-on-year.
Operating earnings from networks operations in the US, Mexico and Brazil, and from Mexican generation were all up on last year, helping to generate the net profit. Of Iberdrola’s net 47.75 GW installed capacity worldwide in 1H2017, 30% was gas-fired, 60% renewables including hydro, with the remaining 10% mostly nuclear albeit still with 874 MW coal-fired in Spain.
Iberdrola said it supplied a total of 1.72bn m3 in 1H2017 to third parties, of which 0.82bn m3 were sold on a wholesale basis, 0.38bn m3 sold to end-customers, and 0.52bn m3 used in electricity generation.
Mark Smedley