Iberdrola Investments Hit Record 9 Billion Euros, Driven by UK and US Growth, Boosting Profit by 17%

Record Investment and Upgraded Forecast

Iberdrola announced today that its investments reached a record 9 billion euros in the first nine months of 2025, marking a 4% increase compared to the same period last year. This investment surge, primarily focused on the United Kingdom and the United States, has significantly boosted the company’s network business operations and cash generation. As a result, Iberdrola is upgrading its year-end forecast to 6.6 billion euros, anticipating double-digit growth. The company will also distribute an interim dividend of 0.25 euros per share while continuing to strengthen its financial position.

Profit Growth and Market Position

The company reported a net profit of 5.307 billion euros through September 2025. Excluding one-off items such as divestments and deductions, this represents a 17% increase over the previous year. Following these results, Iberdrola’s assets now exceed 160 billion euros, with a market capitalization of around 115 billion euros. This valuation cements its status as the largest utility in Europe and one of the top two globally by market value.

Strategic Focus on Electrical Grids

The profit increase was primarily driven by the heightened investment, strong performance in the networks division, and improved regulatory frameworks. Of the 9 billion euros invested, over 60% was allocated to the UK and US markets. The network business was the main target, receiving 55% of total investments, or approximately 4.904 billion euros. This has expanded the company’s grid asset base to 49.3 billion euros, a 12% rise compared to the prior-year period.

Expansion in Renewables

In the generation and clients division, Iberdrola invested 3.442 billion euros, which supported the installation of over 2,000 MW of new renewable capacity in the last 12 months. The UK and US also received 60% of this investment. Currently, the Group has 5,500 MW under construction and another 8,500 MW in advanced development, positioning it to meet potential demand growth.

EBITDA and Business Segment Performance

Driven by this investment effort, gross operating profit (EBITDA) reached 12.438 billion euros, with adjusted EBITDA growing by 4.4%. Notably, 83% of the EBITDA originated from countries with high credit ratings, with the UK and US contribution increasing to 43%. By business segment, the networks’ operating result surged by 26%, thanks to investments and new regulations. Conversely, the renewable production and clients division saw an 11% EBITDA decline, attributed to divestments and higher ancillary service costs in the Iberian Peninsula.

Improved Financial Solidity

Business growth has been accompanied by enhanced financial strength. The company reduced its net debt by 3.2 billion euros in the first nine months of the year, bringing the total down to approximately 48.5 billion euros, facilitated by its asset rotation and partnership strategy. Iberdrola signed agreements valued at over 8 billion euros during this period, positively impacting net debt by about 4.5 billion euros. Cash flow grew by 10% to nearly 9.752 billion euros, and the company maintains a strong liquidity position of 23 billion euros, enough to cover 25 months of financial needs without market access. Consequently, the cost of its debt has decreased to 4.72%.

Record Dividend Proposed

Based on these results, the company has proposed a record interim dividend of at least 0.25 euros per share, an 8.2% increase from the previous interim dividend. This will be supplemented by a final dividend, subject to approval at the next General Shareholders’ Meeting, to be paid in the third quarter of 2026.

Federal Reserve Poised for Second Rate Cut Amid Balance Sheet Speculation

Anticipated Cut and Data Uncertainty

The Federal Reserve is widely expected to cut interest rates for the second time this year, with over 96% of the market anticipating a 25-basis-point reduction, bringing the target range to 3.75%-4.00%. Despite the high certainty surrounding the cut itself, this meeting is one of the most anticipated of the year. Fed officials are operating partially “blind,” forced to make their own calculations to assess the labor market and inflation trends. This uncertainty is a direct result of the government shutdown, which has delayed official data on consumer inflation, wages, and employment.

Focus Shifts to Future Policy

Inflation figures from last Friday, which were also delayed, showed a mixed picture. The year-over-year rate in September rose to 3%, an increase of three-tenths, but this was less than anticipated, smoothing the path for the expected cut. However, analysts are already looking past this meeting, with many focusing on the likelihood of another cut in December. The market is more interested in the Fed’s future bias and whether Chairman Powell will signal a specific, temporary period of cuts, rather than the immediate reduction itself.

The Quantitative Tightening Question

A crucial element of this meeting is whether the Fed will, as hinted by the chairman earlier this month, begin to halt the reduction of its balance sheet, a process known as Quantitative Tightening (QT). The Fed previously used Quantitative Easing (QE)—the massive purchase of assets to stimulate growth—following the global financial crisis and continued the policy, with pauses, until 2022. Since then, it has been progressively shrinking its balance sheet. Powell’s earlier remarks about potentially stopping QT have already impacted markets, leading to an increased cost for banks to obtain overnight loans secured by Treasury bonds.