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Investing.com-- Iberdrola (BME:IBE) on Wednesday reported second-quarter net income of €1.6 billion, 19% above consensus, and confirmed plans to raise €5 billion through an accelerated bookbuilding offering to support grid investments in the United Kingdom (TADAWUL:4280) and the United States.
The Spanish renewable energy company maintained its full-year 2025 net income guidance of mid- to high-single-digit growth excluding capital gains from Mexico in 2024 and a €386 million non-cash past cost recognition in the US recorded in the first quarter..
The equity raise represents approximately 5% of Iberdrola’s market capitalization and is intended to help finance a €55 billion capital expenditure program between fiscal years 2026 and 2031.
The company said the new funds will allow it to increase annual capital spending to €15 billion, compared with consensus expectations of €13 billion per year.
Iberdrola stated that no further equity raises are anticipated before 2030. The capital raise is expected to help preserve the company’s credit ratings of BBB+ and Baa1 and to support earnings through additional investments.
Trading of the new shares is scheduled to begin on July 25, 2025, subject to regulatory approval.
In the second quarter, Iberdrola reported earnings before interest, taxes, depreciation and amortization of €3.6 billion, 2% above consensus, and earnings before interest and taxes 4% higher than forecast.
The company cited favorable regulatory returns in its networks business, with an average return on equity of 9.5%.
Net debt stood at €52.7 billion at the end of the quarter, compared with €55.7 billion in the first quarter.
The company said the equity raise is part of a longer-term strategy to support growth in regulated networks, primarily in the U.K. and U.S., and that it expects the capital injection to have a positive effect on earnings per share over time.
“Overall, small near-term negative, as cap raise would likely be dilutive to near-term EPS, but helps de-risk the medium-term outlook,” said analysts at Jefferies in a note.