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Micro Cap
Market Cap £965k
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RPT-UPDATE 1-Iberdrola bets on foreign grids for recovery after tough 2014

Wed 19th February, 2014 1:17pm
(Repeats to add link to factbox) * To invest 9.6 billion euros in 2014-2016 in new strategy * EBITDA, net profit to grow annual 4 percent after 2014 * Expects minimum gross dividend of 0.27 euros/share * Shares down 0.28 percent By Tracy Rucinski  and Andrés  González MADRID, Feb 19 (Reuters) - Spanish power firm Iberdrola IBE.MC  said it would spend the bulk of 9.6 billion euros ($13.2 billion) in investments over the next three years on regulated power grids and renewable assets abroad, driving an earnings recovery after 2014.  Iberdrola, a world leader in wind power, posted a 6.8 percent decline in underlying profit in 2013, hit by fresh regulatory changes in Spain during the year which it said wiped 801 million euros from pretax earnings. Utilities in Spain have suffered from a series of government reforms - including a power generation tax, caps on profits and subsidy cuts - aimed at closing a multi-billion-euro electricity tariff deficit that has built up during years of selling power at regulated prices that did not cover system costs. "We are confident we will keep on providing opportunities for growth with a model based on international diversification," Executive Chairman Ignacio Galan told investors on Wednesday, underlining a focus on countries with stable regulation.  "Imagine what our situation would be were it not for Spain," Galan said during the 2014-2016 strategy presentation. Iberdrola's earnings before interest, taxes, depreciation and amortisation (EBITDA) reached 7.21 billion euros in 2013, near an average 7.24 billion euro forecast in a Reuters poll. ID:nL5N0LJ34L  Its new strategy sees EBITDA falling to 6.6 billion euros in 2014 before recovering to post annual growth of about 4 percent in following two years. Net profit would follow a similar trend, falling by 11.5 percent year-on-year to estimated 2.3 billion euros in 2014 before rising by an annual 4 percent until 2016, it said. The company will cut debt by 6.7 percent to 25 billion euros in 2014, a figure it expects to stay stable until 2016, thanks to cash flow generation rather than a need for major new asset sales, CFO Jose Sainz told Reuters on a telephone interview. Iberdrola said it expects to maintain dividends in line with profit growth, targeting gross shareholder remuneration of at least 0.27 euros per share between 2014 and 2016. It shares, which have risen 19 percent over the past 12 months, were down 0.3 percent at 4.595 euros on Wednesday, in line with Spain's blue chip index  .IBEX .  For a FACTBOX on the strategy, click  ID:nL6N0LO2LM       ($1 = 0.7272 euros)  (Editing by Paul Day and Mark Potter) ((tracy.rucinski@thomsonreuters.com)(+34 91 585 2153)(Reuters Messaging: tracy.rucinski.thomsonreuters.com@reuters.net)) Keywords: IBERDROLA RESULTS/STRATEGY
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