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Iberdrola increased its net profit by 4.7% to €2.68 billion in the first nine months of the year and maintained an increased rate of investment, reaching €6.64 billion, a record figure and 23% more than the same period last year, reinforcing its commitment to economic recovery and job creation in a complex global environment.

These investments allowed the group to add 4,600 new megawatts (MW) in the last year, of which 1,300 MW have been installed in the third quarter of 2020, and to continue progressing in the construction of 7,600 MW. At the end of September 2020, the company added 14,000 MW to its pipeline - approximately 90% of which is offshore wind - which already exceeds 70,000 MW worldwide.

Iberdrola continues to drive investments that activate the green recovery which focus on renewables, grids, high-capacity storage and new technologies such as green hydrogen for decarbonising industry. In line with this strategy, investments in renewables grew by 52% as of September and represent 54% of the total invested in the period, while those for networks increased by 5.5% and account for 38% of the total. Likewise, Iberdrola has reaffirmed its commitment to reach the €10 billion of investment planned for the year, despite the impact of COVID-19.

During the presentation of the results for the first nine months of the year, Ignacio Galán, the Group's Chairman, explained that "despite the difficult environment in which we operate, the acceleration of our investments is opening up enable us to continue being a key driver of economic recovery and job creation, while improving our financial results.”

Operating efficiency and financial strength

At September, adjusted gross operating profit (EBITDA) rose by 3.2% to €7.56 billion. The performance of the business, which includes the COVID impact of €216 million, was supported by the increase in the installed renewable capacity and the operational performance of the renewables business and the generation and supply business. After eliminating extraordinary items from the period in 2019 and 2020, EBITDA amounted to €7.35 billion, a 2% reduction.

By business, EBITDA in renewables increased by 5.6% to €1.77 billion, driven mainly by the United Kingdom and the United States, as well as an increase in operating capacity of 7.4% to 29,175 MW and total installed capacity to 33,701 MW. The generation and supply business showed growth of 10.3% and achieved EBITDA of €2 billion. Networks, for its part, impacted by COVID-19 and weather events in the United States, saw a reduction in EBITDA of 10.7%, to €3.52 billion.

The company's activity during the period was impacted by COVID-19, representing €203 million in terms of net profit, on account of the effect on demand and provisions for insolvencies. The evolution in the last quarter, however, shows a progressive normalization of energy demand and prices in Spain and the United Kingdom, while countries such as the United States and Brazil are making progress in implementing regulatory recovery measures.

Iberdrola’s net profit rose by 4.7% to €2.68 billion. Discounting the non-recurring factors over the period, both in 2019 and 2020, the company's adjusted net profit would stand at €2.55 billion, up 8.8%.

During the period, Iberdrola continued to improve its efficiency, with a 1.8% reduction in net operating expenses. Cash flow generation rose by 2.3% to €5.96 billion at the end of September, improving solvency ratios. The group's liquidity exceeds €13.8 billion, covering 30 months of financial needs.

Maintains commitments: results and shareholder remuneration

The increase in investments, the operational performance of the businesses and the diversification of the model allows Iberdrola to maintain its net profit forecast for the end of 2020, with an estimated medium/high single-digit growth.

Iberdrola is also maintaining its shareholder remuneration policy, with the launch of a new edition of the 'Iberdrola Flexible Remuneration' program, through which it will distribute an interim dividend of at least €0.168 gross per share for 2020. The final amount is expected to be paid out in February 2021.

Reinforcement in core markets and new growth platforms

During the year, Iberdrola has strengthened its position in the main markets where it operates and has sought new opportunities in markets with renewable energy growth prospects, adding to its pipeline of medium and long-term projects.

Thus, along with the corporate operation in United State announced today, with the acquisition of PNM Resources in the states of New Mexico and Texas, over the past nine months the group has carried out a further seven corporate acquisitions. This includes Australia, with the incorporation of Infigen; Japan, with a 3.3-GW offshore pipeline, following the acquisition of the local developer Acacia Renewables; and in Sweden, with the agreement with Svea Vind Offshore AB (SVO) for the potential development of up to 9 GW of offshore wind.

It also reinforced its presence in core countries, such as France, with the purchase of the French company Aalto Power - 118 MW of operational wind power and a 636-MW pipeline in different stages of development - and the acquisition of 100% of the Saint Brieuc offshore wind farm. In Scotland the company acquired two onshore wind power projects with 165-MW capacity, and in Brazil Iberdrola completed the acquisition of a wind power project pipeline of 400 MW capacity.

The transition to a decarbonized and electrified economy has widespread support. This is demonstrated by recently announced strategic plans, and the review of environmental objectives in the main countries where the company operates.

Recently, the European Union announced more ambitious climate objectives, with a target of reducing emissions by 55% by 2030 - and increased renewables targets that include 40 GW of green hydrogen by 2030. Similarly, Spain is working on structuring the European funds for recovery, in line with the green transition, which will see 37% of €72 billion allocated to clean energy, including a new green hydrogen strategy, with planned investments of €8.9 billion by 2030.

The United Kingdom has also redoubled its commitment to offshore wind power and is targeting 40 GW by 2030; while the US states of New York, New Jersey and Virginia are preparing auctions for 4.9 GW of offshore wind power, Virginia aims to have 5.2 GW of this technology in the next few years.

In the first nine months of the year, Iberdrola's global activity advances in terms of sustainability. Its CO₂ emissions have been reduced by 10% compared to September 2019, to 98 gCO2/Kwh. Likewise, it has recruited 3,000 new employees during the year. The company has received numerous awards for diversity and inclusion in the period, with awards such as The Planet Mark in the United Kingdom. Iberdrola also occupies the fifth position in the global ranking of the most sustainably managed companies in the world, according to the first edition of the ranking prepared by the US newspaper 'The Wall Street Journal’ and together with the 'Just' recognition from Forbes for its commitment to the environment and the communities it serves in the US.