Iberdrola : €5bn capital raise announcement alongside solid H1-25 results

Solid H1-25 results slightly ahead of expectations / 2025 net profit guidance affirmed . EBITDA reached €8.29bn (slightly above expectations), down 14% on a reported basis, due to a negative base effect (€1.7bn capital gain recorded in H1-24 on Mexican assets disposal ). On a reported basis, it grew 5% YoY. Net debt stood at €5 2 . 7 bn at 30/06/25 , up from €5 1 .7bn at end-24. Management reaffirm ed its n et p rofit g uidance for 2025 of “ d ouble-digit growth” . €5bn capital increase announced . The transaction will support Iberdrola’s intensified investment effort in power networks with a €55bn envelope earmarked for the 2026-31 period . Investments are to be made in “ countries with stable, predictable and attractive regulatory frameworks, and strong credit ratings ” , primarily the US, UK and Spain . Management made it clear during the conference call that the €5bn proceeds are not meant to finance large acquisitions. Besides, noteworthy is a set of press reports mentioning this morning the po tential sale of some Mexican renew able assets valued at €4bn . S et to remain one of the strongest credit profiles among European utilities . Today’s announcements further illustrate the solidity of Iberdrola’s strategic and financial trajectory. Networks investments being considered the safest in the industry, the capital inc rease will further strengthen Iberdrola’s anchor at the BBB+/Baa1 /BBB+ rating levels. Increased flexibility on the hybrid side? W e note that the €5bn capital increase leaves Iberdrola with some flexibility in the refinancing of its current hybrid stock (€8.25bn) pursuant to S&P’s replacement criteria , in particular for what concerns the €1.6bn instrument reaching 1 st call date in January 2026. Tackling the topic during the Q&A session, management mentioned its commitment to maintaining credit metrics in line with the current BBB+/Baa1/BBB+ ratings. This suggests Iberdrola is inclined to maintain its current hybrid stock, which implies refinancing the next instruments reac hing 1 st call date.