By Pietro Lombardi
MADRID (Reuters) -Europe's largest utility Iberdrola (OTC:IBDRY) posted on Wednesday a 50% increase in net profit for the first nine months of the year, in a sign that its focus on Britain and the United States is paying off.
This is part of a broader shift - toward building and upgrading power grids while taking a more selective approach toward renewables, with a preference for offshore wind projects - that has pushed its market cap to record levels.
Record investments in the past 12 months allowed the Spanish company to add lucrative regulated assets to its network operations, as well as new renewable capacity.
The group, which raised its outlook for the year in the previous two quarters, cited operations in Britain and the U.S. as the main drivers of its performance this year.
Iberdrola sees further opportunity for expansion in its core renewables and grid operations and beyond, eyeing businesses such as data centres to drive further growth.
"Our continued major investment drive is delivering new renewables projects and regulated assets, and the contribution to results of our increased offshore wind capacity underlines the reason why investment in this technology was a key pillar in our strategic plan," Executive Chairman Ignacio Sanchez Galan said in a statement.
It expects net profit to increase by 14% this year to around 5.5 billion euros, excluding one-offs such as the sale of some assets in Mexico. This is in line with the growth in its interim dividend, set at 0.23 euros per share.
Net profit for the period rose to 5.47 billion euros ($5.91 billion) from 3.64 billion, the company said.
Core earnings - before interest, tax, depreciation and amortisation - rose 23% to 13.27 billion euros.
With the vast majority of grid and network supplies secured through 2026, Iberdrola is working on supplies for 2027 and beyond.
($1 = 0.9255 euros)