Spain's Iberdrola plans to invest 47 billion euros ($47 billion) in its electricity networks, renewable energy production and customer businesses in 2023-2025 alongside an expected rise in profits, it said on Wednesday.
Iberdrola is pushing to remain one of the global renewable power leaders at a time when utilities are facing a challenging transition away from fossil fuels, accelerated by the need to cut energy dependence on Russia.
In a strategy update, Iberdrola said 57% of the investment, or 27 billion euros, would be in electricity networks in Britain, Brazil, Spain, and the United States.
It said 85% of that investment has been secured, with deals already closed or expected to be closed next year.
Some 17 billion euros of the 47 billion total investment will go on renewables.
Nearly half of that will be spent on offshore wind.
"If we are to learn one lesson from the current crisis, it is the compelling need to deliver electrification quickly for a more secure, clean and competitive energy system," said Executive Chairman Ignacio Galan.
"The global investment plans we have set out today will help us to bring more self-sufficiency and resilience against potential energy shocks in the countries where we operate, by reducing their dependency on oil and gas and by continuing their path to Net Zero," he added.
Italian peer Enel, which controls Spanish utility Endesa, has said it plans to spend 160 billion euros ($190 billion) over the next ten years to become a green 'super major', of which 70 billion would be spent on renewables to triple capacity to 120 gigawatts (GW).
Iberdrola currently has 40 GW of renewables capacity, new chief executive Armando Martinez told the company's capital markets day in London.
The company plans to deliver 52 GW of new installed renewables capacity by 2025, he added. Over half of the new capacity is already secured and around 95% of the production in 2025 is contracted.
The target has been reduced from 60 GW previously and its 2030 renewables capacity target has been reduced to around 80 GW from 95 GW previously, analysts at Jefferies investment bank said. Net profit should increase to between 5.2 billion and 5.4 billion euros by 2025 from an expected 4 billion to 4.2 billion euros in 2022, Iberdrola said in its strategy update.
It also aims for earnings before interest, taxes, depreciation and amortization (EBITDA) of 16.5 billion-17 billion euros by 2025.
Shareholders are expected to receive between 0.55 and 0.58 euros per share by 2025, after Iberdrola set a payout ratio of between 65% and 75% of earnings.
($1 = 0.9933 euros)
(Reuters - Reporting by Jesus Aguado and Jessica Jones in Madrid and Nina Chestney in London/Editing by Mark Potter, Elaine Hardcastle)
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