Spain — Iberdrola Raises Profit Growth Target as Power Networks Drive Expansion
Spanish energy company Iberdrola has upgraded its financial outlook for 2026 for the second time, supported by its electricity network operations and a more selective approach to renewable energy investments.
Iberdrola, which Reuters describes as Europe’s largest utility, now expects adjusted net profit to grow by at least 10% this year, up from its previous forecast of more than 8%.
The company also projects average annual growth of 10% in adjusted net profit over the next five years, surpassing the single-digit growth anticipated in several of its earlier medium-term forecasts.
The improved outlook reflects Iberdrola’s strategic focus on expanding and modernizing electricity networks in markets such as Britain and the United States. These investments have gained importance as utilities respond to shifting electricity demand and growing requirements for grid infrastructure.
At the same time, Iberdrola has become more selective in its spending on renewable power generation rather than pursuing projects indiscriminately. Its emphasis on network development, combined with more targeted generation investments, has supported its financial performance.
According to Reuters, Iberdrola has recorded annual profit growth in double digits since 2022. The latest projections suggest management expects that momentum to continue.
The company’s financial results for the first nine months of 2026 also reflected continued growth. Net profit rose by 10% to €5.8 billion. Excluding the impact of the sale of its Mexican assets, profit increased by 9% to €5.1 billion.
The gap between the reported and adjusted figures reflects the influence of asset transactions on overall earnings. The adjusted figure offers another perspective on the company’s performance by excluding the specified asset-sale impact.
Electricity networks remain a key pillar of Iberdrola’s expansion strategy. Its regulated grid assets, currently valued at €56 billion, are expected to grow to more than €90 billion by 2030. The company also plans to add 15 gigawatts of new power capacity.
Grid infrastructure connects electricity generation facilities with consumers, making network investment an important part of the energy sector’s development. Expanding and upgrading these systems can create growth opportunities for utilities, although such projects typically require substantial investment over several years.
Iberdrola has also proposed increasing returns to shareholders. The company has put forward an 8.7% rise in its interim dividend to €0.275 per share, with further details on payouts expected in 2027.
Investors will have another opportunity to review the company’s longer-term strategy at its capital markets day, scheduled for March 2027.
The higher earnings forecast reflects management’s confidence in its strategic direction, although future results will depend on operating conditions and the successful delivery of planned investments.
More broadly, Iberdrola’s projections highlight the growing importance of electricity networks alongside power generation in the energy industry. Decisions on grid infrastructure, renewable energy projects and additional generating capacity are expected to remain central to utilities’ efforts to expand their businesses and respond to changing energy needs.
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