Iberdrola, S.A.

First-half 2026 reported net profit was EUR 4,336 million, up 22% year over year, while adjusted net profit was EUR 3,565 million, up 8%. Adjusted EBITDA increased 7% to EUR 8,050 million; Networks adjusted EBITDA rose 13% to EUR 4,213 million and Power & Customers EBITDA increased 1% to EUR 3,100 million. Adjusted revenues were up 4.2%, adjusted gross margin rose 4%, and adjusted EBIT increased 10% to EUR 5,226 million. Net debt was EUR 54 billion at June 30, FFO to adjusted debt was 22.4%, liquidity was more than EUR 21 billion, and net debt to EBITDA remained 3.5x. For the full year, management reaffirmed guidance for growth above 8% in adjusted net profit in 2026; year-end net debt is expected to be around EUR 56 billion.

Ignacio Galán emphasized that the quarter confirmed Iberdrola’s strategy of shifting capital toward regulated Networks while continuing to expand renewables and storage. He said the company is benefiting from higher RAB, better tariffs, RIIO-T3 in the U.K., stronger U.S. demand, and Brazil’s concession renewal, while also pointing to policy tailwinds in Europe and the U.K. His tone was upbeat and confident, repeatedly saying the company is comfortable with the full-year outlook and could provide “good news” after summer if second-half trends hold.

Pepe Sainz walked through the bridge from reported to adjusted earnings, highlighting the EUR 950 million gain from the Mexico sale that mainly explains the gap between reported and adjusted net profit. He said FX was a meaningful drag: excluding it, adjusted EBITDA growth would have been 9% and adjusted net profit growth 14%; the dollar fell 6.8% and the pound 3.1% against the euro. He also cited adjusted gross margin up 4%, net financial results worsening by EUR 508 million to EUR -1.1 billion, net debt at EUR 54 billion, and leverage/credit metrics of 3.5x net debt to EBITDA and 22.4% FFO to adjusted debt, with liquidity of EUR 21.5 billion. On Caruna, he said the deal justifies a 16x purchase multiple based on the net income available to Iberdrola after the shareholder loan is removed.

Analysts focused on the sustainability of first-half profit growth, the rationale and economics of the Caruna acquisition, AI initiatives, upside vs. the plan, U.K. policy changes, Brazil investment returns, the Spanish blackout, U.S. renewables repowering, U.S. rate cases, batteries, year-end net debt, Spain retail competition, and the tradeoff between grid investment and affordability. Management said the first-half strength should continue into the second half thanks to higher regulated assets, improved tariffs, full-year contribution from Neoenergia minorities, 2.1 GW of added capacity by year-end, and 100% of expected energy already sold. On Caruna, Galán framed it as a small, accretive, regulated-network deal financed in part by Mexico proceeds, while Sainz said the expected net income and removal of the shareholder loan support the valuation. On AI, Galán said there are about 300 projects in production or final development and another 150 progressing, with value expected in the hundreds of millions.