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Iberdrola reported its Q1 2025 earnings, revealing an EPS of €0.302, which fell short of the forecasted €0.3624, marking a 16.7% miss. Despite this, the company achieved a 26% year-over-year increase in net profit to €4,002 million. The stock price saw a modest decline of 0.38%, closing at €15.67. According to InvestingPro data, the stock trades near its 52-week high of €18.13, with an impressive 42% return over the past year. The company’s overall financial health score stands at 3.1, rated as "GREAT" by InvestingPro analysts.
Key Takeaways
- Iberdrola’s net profit grew 26% year-over-year in Q1 2025.
- EPS fell short of expectations by 16.7%.
- The stock price decreased by 0.38% following the earnings release.
- Investment in renewable energy continues to be a strategic focus.
- Geographical diversification helps mitigate geopolitical risks.
Company Performance
Iberdrola demonstrated robust performance in Q1 2025, with net profit increasing by 26% compared to the previous year. The company’s strategic investments in renewable energy and infrastructure have bolstered its financial standing, despite an EPS miss this quarter. The global energy landscape’s shift towards sustainability positions Iberdrola favorably against competitors.
Financial Highlights
- Revenue: €12.86 billion, a 1% increase year-over-year.
- Net Profit: €4,002 million, up 26% year-over-year.
- EBITDA: €643 million, a 12% growth.
- Gross Margin: €7,200 million, a 5% increase.
- Funds from Operations (FFO): €502 million, up 11%.
Earnings vs. Forecast
Iberdrola’s actual EPS of €0.302 was below the forecast of €0.3624, indicating a 16.7% miss. This contrasts with the company’s historical trend of meeting or exceeding expectations, raising questions about future earnings potential.
Market Reaction
The stock’s 0.38% decline post-earnings suggests cautious investor sentiment, likely due to the EPS miss. With a beta of 0.64, Iberdrola demonstrates lower volatility compared to the broader market. InvestingPro data shows the stock has delivered strong returns, with a 17% gain over the past six months and a 20% year-to-date increase, reflecting robust investor confidence in the company’s long-term growth strategy.
Outlook & Guidance
Iberdrola projects mid to high single-digit net profit growth for the remainder of 2025, with potential for double-digit growth if U.S. past cost recognition is included. The company plans to invest €13 billion in networks between 2025 and 2026, with new renewable assets expected to contribute €800 million to EBITDA annually.
Executive Commentary
Ignacio Galan, Executive Chairman, emphasized the importance of electrification in addressing global challenges, stating, "Electrification is the right answer to global challenges." He also highlighted energy security as a critical component of national security, reinforcing the company’s strategic focus on sustainable energy solutions.
Risks and Challenges
- Potential regulatory changes impacting profitability.
- Economic uncertainties affecting energy demand.
- Competition in the renewable energy sector.
- Geopolitical risks affecting international operations.
- Fluctuations in currency exchange rates impacting financial results.
Q&A
During the earnings call, analysts inquired about Iberdrola’s U.S. investment strategy and the potential impact of tariffs, which are expected to be minimal. The company also addressed questions regarding its response to potential electricity blackouts in Spain, emphasizing preparedness and resilience.
Full transcript - Iberdrola SA (IBE) Q1 2025:
Moderator/Investor Relations, Iberdrola: Good morning, ladies and gentlemen. First of all, we would like to offer a warm welcome to all of you who have joined us today for our twenty twenty five first quarter results presentations. As usual, we will follow the traditional format given in our events. We are going to begin with an overview of the results and the main developments during the period given by the top executive team that usually is with us Mr. Ignacio Galan, Executive Chairman Mr.
Armando Martinez, CEO and finally, Mr. Pepe Seinth, CFO. Following this, we’ll move on to the Q and A session. I would also like to highlight that we are only going to take questions submitted via the web. So please ask your question only through our webpage www.iberdrola.com.
Finally, we expect that our event will not last more than sixty minutes. If any question remain unanswered, we at IR are as always fully at your disposal. Hoping that this presentation will be useful and informative for all of you. Now without further ado, I would like to give the floor to Mr. Ignacio Galan.
Thank you very much again. Please Mr. Galan.
Ignacio Galan, Executive Chairman, Iberdrola: Thank you, Ignacio. Good morning, and thank you very much for joining to this call. I would like to start thinking and recognizing the excellent work of more than 2,000 professionals of Iberdrola, which have already restored electricity in Spain after the blackout suffered two days ago. At all times, our generation plant were available to operate under the instruction of the system operator, Retelectrica. Also, our distribution networks were also connecting and restoring the service progressively in the system as the system operator, who is responsible operation, asked us to do it.
Moving to result, in the first quarter twenty twenty five, net profit reached €4,002,000 20 6 percent up year on year excluding the capital gains from last year divestment of thermal generation. And reported EBITDA was €643,004,000 also 12% up in like to like four terms. Mainly driven by a strong operating performance in networks, we represent 52% of EBITDA through March, higher generation volumes for new assets in operation in The U. S, Iberia and the rest of the world, partially offset by the normalization of margin in The United Kingdom, especially Iberia, resulting 70% decrease in EBITDA in Spain. Investment were up by 14%, hitting a new record of 2,007 and €20,000,000 in just one quarter and €300,017,000 in the last twelve months.
Thanks to 30% increase in The U. S. And U. K. Over the quarter, which together represent two thirds of our total investment.
By businesses, net worth investment were up 18%, mainly driven by 30% increase in The UK, both in transmission and distribution. Renewable investment rose by 7% with offshore wind up 50% due to project under construction in The U. S. And UK and Germany, all of which will be operational in 2025 and 2026. In addition, we received the final approval from UK Competition and Market Authority for the integration of electricity in the West has been fully consolidated in our accounts since March.
As a result, our regulated asset base in UK is now reached €15,500,000,000 more than doubling in just five years. Thanks to the contribution of new investment, cash flow increased by 11% with respect to the first quarter twenty twenty four to €502,003,000 leading to financial ratios that are fully consistent with our BBB plus rating. As mentioned, EBITDA reached 4,006 and €43,000,000 12 percent up with almost 50% coming from The U. S. And U.
K, mainly to the strong growth in our net gross asset base in both region, offsetting the decreased Spain results. As a consequence, networks contributed more than 50% of total EBITDA, almost 10 points above the average of the last five years. EBITDA in the businesses also includes a positive impact to the recognition of past calls in U. S. Production and customers operating result reflect 2,600 installed over the last twelve months, of which six sixty come from an offset offshore wind.
An increased production in The U. S, Iberia, France, Germany and Australia, offsetting the normalization of margins in The UK and Iberia. Finally, we continue closing new PPAs with Tier one customers with more than four terawatt hours per annum signed in the last twelve months, reaching a total portfolio of around 40 terawatt hours per annum to be supplied per annum in the following years. The record investment figures achieved in this first quarter more than €2,700,000,000 are mainly due to our strong expansion in networks with $1,432,000,000 euros invested through March, up 18% over first quarter twenty twenty four and more than 50% above the average of the last five years, mainly driven by The U. S.
And UK, which represent more than two thirds of the total after doubling investment levels over the past five years. This increase will accelerate in the coming quarters, given the huge investment commitments in both countries. In The UK, we are progressing with again in the approval process RIIO T3, which is expected to support an unprecedented expansion of transmission infrastructure between 10/26 and 02/1931. And we foresee a similar trend in distribution. Recently, Objen approved €200,000,000 in additional investment for the Scottish Power Distribution licenses, including electricity in the West.
In The United States, net worth investment increased by 10% with €241 invested in transmission mainly in the NCEC interconnection between Massachusetts and Canada. In this project, all foundation and poles have been already installed in the DC line and we continue progressing the converter station and other facilities, expect to have this infrastructure fully operational by the year end. Our bank distribution investment have reached close to €300,000,000 80 percent in the state of New York, where all our companies are reaching and exceeding the headline return of equity set in their rate cases. In Brazil, the regulator has approved a new tariff review in Pernambuco for the next four years and annual readjustment in Bahia Regrando do Norte. That together will add at least BRL100 million operating result per annum, increasing the energy EBITDA by 10% on the annual basis with this adjustment.
In addition, the renewal process for distribution concession is progressing as expected. Our total regulated asset base reached €49,000,000,000 reflecting the organic growth already mentioned and the consolidation of electricity in the West, which contribute €3,400,000,000 to our asset base in this and is expected to add around €450,000,000 of EBITDA per annum exceeding initial expectation. Following this excellent performance, electricity in our West recently received the utility of the year hour by utility week and was ranker number one in of the annual performance benchmark in all UK distribution companies, followed by the orders to Scottish Power licenses in Scotland and England and Wales, which were ranked second and third. Biographies, U. S.
And UK already contribute 60% of our regulated asset base, which is expected to exceed €51,000,000,000 by the year end. Investment in renewables increased by 7% up to $1,064,000,000 euros with two thirds is in United Kingdom and United States. More than 50% of renewables investment were allocated to offshore wind, mainly the constraints of Binyar Wind in The U. S, which we will be fully operational by year end, is Anglia 2 And 3 in The UK and the rest in Bindakar in Germany. Offshore wind accounted by 20% of total investment more than The U.
S. And The UK. And solar PV represent 21%, highly diversified between The U. S, Iberia, other countries in Continental Europe and Australia. All this investment continue to progress as scheduled even in the current supply chain scenario, thanks to our procurement strategy.
Base or local suppliers will represent 80% of our total purchase and the anticipation of business needs through detailed planning processes, securing all strategic contracts in advance. This strategy is also protecting us from current global trade dynamics. Accordingly, we expect no impact from new tariff in our product in our result, with a maximum increase of just $130,000,000 in the group investment cost or less than 1% of our total annual CapEx, clearly within our total our planned contingency levels. Relate to 10% of our investment in our offshore wind and solar PV projects under construction in The U. S, where we have clauses in our contract with suppliers that will allow us to reduce this amount.
We do also expect any impact in transmission and distribution investment as 99% of The U. S. Purchase are local and this business are regulated. In our offshore wind, where 100% of the supply chain of Binyard Wind one is already fully secured. Our strong increase in networks investment and our selective approach to renewables is also driving a structural improvement in our cash generation profile and financial ratios.
In renewables, we expect the completion of major project under construction will reduce by 50%, the work in progress in the business in this business over the next two years from €8,600,000,000 today to between 4,000,000,000 and €5,000,000,000 by the end of the twenty twenty six. In addition, these new assets will add around €800,000,000 of EBITDA on an annual basis both in 2025 and 2026 for a total of €1,600,000,000 from 2027, mainly coming from the offshore wind project of Isangia three in The UK, Binyagua in The U. S. And Baltic Eagle and Bindacker in Germany, which have already closed long term PPAs of CFDs providing significant stability to revenues and profits. All these will drive a substantial increase in our return on investment in these businesses and in our overall financial strength.
That will continue improving, thanks to our focus on networks, where we expect to invest more than €13,000,000,000 between 2025 and 2026, as 90% of this investment will have a positive impact on return and cash from year one, including 100% network investment in The UK and all the investment related to rate case in The U. S. Plus NCEC reinterconnection project beginning in 2026. Our strong operating performance and the acceleration of cash recovery has driven 11% increase in funds from operation to €502,003,000 allowing us to maintain our financial ratio in line with our plan and with our BBB plus rating after the constellation of electricity in the West and the purchase of our green minorities. With FFO over adjusted net debt of 22.3 percent, in addition, our liquidity remains at €21,000,000,000 enough to cover nineteen months of financial needs.
I will now hand over to our CFO, Pepe Saeed, who will present the group financial results in more detail. Thank you. Pepe?
Pepe Seinth, CFO, Iberdrola: Thank you, Chairman. Good morning to everybody. As the Chairman has said, the first quarter twenty twenty five net income reached €4,002,000 and grew 26% once compared to the first quarter of twenty twenty four adjusted net income excluding the thermal generation asset divestment. As main change of the perimeter, let me highlight that the E and W is fully consolidated since March. FX evolution has had a minor effect on results with the dollar and the pound growing 3.82.8% and the Brazilian real being 13% lower.
A 1% increase in revenues mainly in the network business due to The U. S. Recovery of past costs combined with a 3% decrease in procurements boosted gross margin by 5% to €7,200,000,000 1 point 7 billion thermal generation asset divestments in Q1 of twenty twenty four positively impacted reported net operating expenses. Excluding it, first quarter twenty twenty five net operating expenses decreased 10.4% mainly due to the €176,000,000 lower storm costs in The U. S.
That is neutral at the EBITDA level as it always lowers as it also lowers the gross margin. Net personnel expenses decreased 0.4%, external services fell 9.8% and other operating income grew 30% due to indemnities of past year costs. Excluding also the mentioned reconciliation impacts and other minor net operating expenses improved 0.9%. Analyzing the results of the different businesses and starting by networks, its EBITDA grew 43% to €415,002,000 with better performance in The UK and in The U. S.
In The UK, EBITDA increased 10.8% to £339,000,000 excluding £35,000,000 positive net contribution from E and W effective since March and higher contribution in distribution, thanks to higher RAB and that more than compensates negative contribution from transmission due to the cap allowance application. In The U. S, EBITDA reached $1,054,000,000 dollars with higher tariffs and better contribution from transmission and positively impacted by the new decision 15.3% down with a slightly higher production partially offsetting margin normalization and 3% higher levels levies even despite 1.2% revenue tax termination. Ascent of April, Iberdrola had record hydro reserves nine terawatt hours which will help the performance of the group in 2025. In The UK, EBITDA fell 17.2% to £426,000,000 with lower wind resource both in onshore and offshore and lower prices partially compensated by lower windfall tax.
In The U. S, EBITDA increased 35% to $286,000,000 with better wind and solar performance and also some timing effects helping EBITDA growth despite the fact that in Q1 of twenty twenty four was positively impacted by the Arctic blast storm one off of $37,000,000 In the rest of the world, EBITDA grew 25.3% to €229,000,000 with a 76% higher offshore production due to the gradual entry in operation of St. Brook in France and Baltic Eagle in Germany both of them offshore wind farms. In Brazil, EBITDA decreased 40% to BRL254 million with lower thermal contribution from ThermoPay our only GCDT in operation compared to a strong twenty four first quarter. Finally, in Mexico EBITDA reached US144 million dollars 90 3 percent lower contribution compared to last year.
That included a thermal asset capital gain and only 17% excluding this capital gain as the remaining business was favored also by some indemnities of past costs. Depreciation and amortization and provisions grew 2% driven by a higher asset base in networks and new operating capacity in renewables, partially compensated by lower depreciation of around €30,000,000 thanks to full year 2024 adjustments and lower bad debt provisions in Spain and in The UK. EBIT reached €3,200,000,000 and grew 17% on an adjusted terms. Net financial results improved €16,000,000 to €588,000,000 thanks to non debt related costs that improved €91,000,000 mainly linked to the FX derivatives that we usually close at the first part of the year due to our P and L hedges. This is more than offsets the debt related costs that grew €75,000,000 due to the higher average net debt while interest related cost has been compensated by the FX due to the depreciation especially of the Brazilian real.
Our reported credit metrics remain comfortable within ratios for BBB, Baa1 even after the ENW consolidation from March, mainly thanks to our cash flow generation with an 11% higher FFO offsetting higher net debt mainly linked to the mentioned €2,300,000,000 ENW consolidation and €800,000,000 gold hybrid bond. As a consequence, our ratios remain strong and we expect to remain in these levels by the year end. FFO adjusted net debt reached 22.3%, adjusted net debt to EBITDA reached 3.5 times and our adjusted leverage ratio was 47.3%. We are also expecting that according to plan debt will end the year around these levels. Net profit grew 26% to €4,002,000 on an adjusted terms compared to €1,600,000,000 adjusted first quarter twenty twenty four net profit.
Equity method includes €25,000,000 corresponding to two months of contribution of E and W. While from March as mentioned before E and W contribution is already at the EBITDA level. In addition, financial results improved 3% while our tax rate normalized to usual levels and minorities were lower as a consequence of the 18% of Angrit acquisition. Now the Chairman will conclude the presentation. Thank you very much.
Ignacio Galan, Executive Chairman, Iberdrola: Thank you, Pepe. Following this first quarter result in the coming quarters, we expect to continue growing and reinforcing our financial strength. With networks as main driver, thanks to a double digit increase in our regulated asset base in just one year, reaching more than €51,000,000,000 and the positive outcome on new rate cases as we recently saw in Brazil. The clear outward trend in demand across all regions will reinforce the need of new infrastructure. It will benefit our energy production and customers business where we will have 4,000 new megawatt fully operation in 2025.
With better wind factors expected in Northern Europe, especially in United Kingdom after a very low first quarter. In Iberia, hydro reserves at record levels of 9,000 kilowatt hour today, as Pepe mentioned, that will secure our production for the second half. Also 100% of our production in the whole 2025 is already sold as agreed prices. All these factors will continue improving our cash generation after 11% growth achieved in the first quarter. New renewable asset in operation will contribute additional cash in the coming quarters and reduce our work in progress in these businesses.
And we will increase the share of investment in networks project, the generic cash flow from the AR1. Additionally, we expect to continue our asset rotation in line with the plans following recent transaction like sale of Maine Natural Gas and the partnership with Kansai in our Windacke offshore wind farm in Germany, cash a few days ago, will allow us to continue executing our investment plan as preserve our financial strength. As a result, today, we reaffirm our net profit guidance of mid to high single digit growth excluding capital gain from natural rotation, even without considering the positive impact already mentioned from the recognition of past costs in The U. S. If we include this impact, we expect to reach double digit growth in net profit in 2025.
With progressive acceleration of the second half of the year, this will result in a very different quarterly profile compared to last year, especially in reported net profit. Given the strong impact of the capital gains from the divestment of thermal generation in the first quarter twenty twenty four. And we expect to accelerate this growth over the coming years. In the current macroeconomic scenario, our government are looking for substantial economic growth and this is driving massive investment infrastructure, especially in sectors, which the lowest exposure to global trade dynamics as electricity. And we saw last morning CERAWeek conference in Houston or during the summit jointly organized by U.
K. Government and the International AS in London last week, we brought together more than 60 governments and the largest global energy companies including Iberdrola. Energy security has become a decisive component of national security, compelling all countries to prioritize any energy autonomy. And as we have been saying, electrification is right answer to these global challenges to its potential to reduce external dependency, geopolitical risk and price volatility linked to fossil fuels, increased security and self sufficiency, improved competitiveness to the higher efficiency of electricity compared to other sources of energy and promote local industries and job across the supply chains and deliver tangible benefits in terms of affordability and price stability, thanks to the market mechanisms such as PPA or CFDs. Iberdrola is optimally positioned to provide long term growth in this scenario, building in our track record of more than two decades of sustained increase in result in dividends, driven by a clear strategy focused on regulating networks and select approach to renewable investment.
With supply chains secured thanks to the anticipation of procurement needs and established relationship with major suppliers of the industry. And benefiting from our geographical diversification with U. S. And UK as our key growth drivers and with a strong presence in Continental Europe, Latin America and Australia, markets in which our scale and relevance allow us to have direct and fluent relationship with key suppliers, financial institution, government regulators. We will continue combined growth and financial strength thanks to cash flow generation, our active debt management and our asset rotation strategy, allowing us to reinforce our strong financial position or our BBB plus rating.
We continue to report on all these development in the coming quarters. So thank you very much. Now I finish for your attention and now we are ready to any questions you may have. Thank you.
Moderator/Investor Relations, Iberdrola: Now starting with the Q and A session, I would like to introduce the following financial professional that have asked the upcoming questions: Gonzalo Sanchez Bordona, UBS Fernando La Fuente, Alantra Alberto Gandolfi, Goldman Sachs Manuel Palomo, BNP Paribas Meike Becker, HSBC Rob Poulay, Morgan Stanley Filip Orpatian, Odo Pedro Alves, Caixabank, VPI Jorge Guimaraes, JV Capital Markets Javier Garido, JPMorgan Javier Suarez, Mediobanca Fernando Garcia, Royal Bank of Canada Jose Javier Rith, Barclays James Brand, Deutsche Bank and finally, Andre Mulder, Credit Suisse. The first question is related to the can you please provide a little more clarity on the net profit guidance for the end of twenty twenty five?
Ignacio Galan, Executive Chairman, Iberdrola: So the guidance I mentioned is we reaffirm our mid to high single digit excluding the past cost recognition of The U. S. Including this impact, we expect net profit to grow at double digit. In all cases, exclude capital gains from natural rotations.
Moderator/Investor Relations, Iberdrola: Second question as well on guidance. Could you please explain which are the key elements which will provide the mid to high single digit growth for this year?
Ignacio Galan, Executive Chairman, Iberdrola: So I think the first one is action taken during the past 2024. So I think we take certain action, a certain decision which is affecting positive 2024. I think we have already things electricity and those transaction, the full acquisition of our green minorities last year, efficiency measures that we took already during 2024. And of course, I think in 2025, it is our organic growth, higher regulated asset base in all countries with the specs to pass to €51,000,000,000 as I mentioned before. More than 4,000 megawatt of new capacity operating contributing to EBITDA.
And I think we expect that that is going to continue during the second part of the year. But nevertheless, Pepe, you would like to provide more detail. You can already provide more details of this.
Pepe Seinth, CFO, Iberdrola: Yes. Well, as the Chairman has said, we are expecting if you look to the numbers and you multiply by four, we are expecting more than €150,000,000 coming from the contribution of E and W. We are also expecting additional over €100,000,000 coming from the recurring net profit of the full ownership of Avangrit and also an improvement in net profit due to lower operating and depreciation expenses linked to 24 adjustments that we did as you can see in this quarter that was giving us €30,000,000 of lower depreciation expenses. So all in all, this supports what the Chairman has been commenting.
Moderator/Investor Relations, Iberdrola: Next question is related to the blackout of Quromonday in Spain as an unprecedented event. Could you please give us your opinion on what caused it? And if it is possible that an event like this happening in Spain again?
Ignacio Galan, Executive Chairman, Iberdrola: So the reason of the blackout must be clarified, but responsible of the system operator, Red Electrica Espana. I think I have my own ideas as engineer, but I think here is not a question of engineer to engineers. I think it’s the system operator have to have the clarify because they are the responsible of this one. What I can say is that before, during, and after this blackout, our generation fleet was ready and the the at the disposal of Red Electrica to the system operator to enter in operation as soon as we received the instruction from the system operator. And I think our people, as I started mentioned already, did a great job working and restoring the service, which normally takes longer periods in a very, very short period of time.
So I think I would like to say it again to congratulate, recognize the work already done by more almost 2,000 of our employees dedicate huge effort to restore service, which is as you mentioned an unprecedented situation.
Moderator/Investor Relations, Iberdrola: Next is related to the business in The U. S. Has the recent measures taken by Trump’s administration changed your view on the country? Can you please provide your view on the future of renewable projects in The U. S.
Including the IRA?
Ignacio Galan, Executive Chairman, Iberdrola: We have been in The U. S. For more than twenty years, I mentioned several times. We have increased investment with all the administration during also during the previous Trump administration. Today, have more than $50,000,000,000 in asset in United States.
We are present in 24 states. And in distribution, we are in New York, in Connecticut, in Maine and Massachusetts and serving almost 10,000,000 Americans. So I think we have a very, very deep presence in The United States. Since the last election, we have invested more than €6,000,000,000 in The United States, including €2,500,000,000 in our green minorities and €2,000,000,000 in the capital increase that we make afterwards, more than $1,500,000,000 in organic investment, almost $1,000,000,000 in the last three months, making The U. S.
Our first investment destinations as I mentioned before, together with UK. Over the last months, I have the opportunity of meeting Secretaries of Interior and Energy and then the Secretary of Energy as well. And all of them said clearly, The U. S. Is totally focused in promoting infrastructure investment.
And this will drive massive investment in networks. I think that is our main business is networks. 80% of our grid result come from networks. Huge opportunities in this segment. I think we are expecting more than $20,000,000,000 up to the end of the decade in New York, Maine and Connecticut for already investing in the grid, in the infrastructure.
And as well as they need more power generation. And this power, in this moment, we have 10,000 megawatt in operation with production sold through long term PPAs, high quality, a very good, let’s say, pipeline for making move. And we will make more power or less power depending on the market condition. If the market conditions are attractive, we will invest more in power. If the market conditions are attractive, invest less.
But I think the ambition of the American government and the American official I had already met is that they are welcoming investment either in power, either in new infrastructures. And we are especially infrastructure we are very, very well located in the country.
Moderator/Investor Relations, Iberdrola: Next is regarding The U. S. Two despite the slide we’ve shown. Do you have an estimation on the impact in your accounts of the new tariff that The U. S.
Are imposing? DIEGO
Ignacio Galan, Executive Chairman, Iberdrola: I think they have impact in terms of CapEx. The impact in CapEx is very limited. It’s less than 1% of our total group planned investment in 2025. So this impact is fully covered by our standard contingency in all the projects allowances.
And we have also agreements with our suppliers to reduce this amount in an important manner. I think the numbers I shared with you before in generation and in power, margin impact is $130,000,000 It’s less than 10% of the total investment plan in United States. And we expect to reduce that by the final part will be much lower because of the agreement we have with suppliers. In the case of Networks, I see no impact. First, because 99% of Networks purchase are local, but also I think whatever cost is protected by a pass through in the rate cases.
And I think in the case I think those are the main things.
Moderator/Investor Relations, Iberdrola: Next is regarding the energy production and customer business in Spain basically that has had a lower contribution in this quarter than last year. Can you provide some color on how it will contribute along the whole
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