Iberdrola Asserts Independence, Profit Rises

Spanish power company Iberdrola on Tuesday trumpeted its independence and ability to create value as Chairman Ignacio Sanchez Galan took a sideswipe at anyone looking to disrupt his industrial vision.

Iberdrola has been at the centre of a storm of takeover speculation concerning a possible break-up bid brokered by its shareholder ACS and French power giant EDF, leading to many other combinations being touted in the market.

"This company is in a position to keep growing and respond to the support we have received with the best possible project, a unique one, represented by our 2008-2010 strategic plan," Galan told analysts at a presentation on the results.

Iberdrola has received support from various shareholders, politicians and trades unions who are all against a break-up of the company.

"I can say clearly that we are already a giant in global terms ... and we have a healthy balance sheet which will allow us to finance investments," he added. "We will continue to add value in the coming years, and in 2008 expect strong or very strong growth in all areas."

Galan underlined the fact that Iberdrola is privately owned in contrast to EDF which is over 80 percent owned by the French state, although he did not name the French firm.

Iberdrola's strategic plan for 2008 to 2010 calls for investment of 24.2 billion euros of which 6.4 billion will go on the almost completed purchase of Energy East and 17.8 billion euros on growth without acquisitions.

Earlier, Iberdrola announced its net profit rose by 41.8 percent in 2007, narrowly beating market expectations, boosted by the contribution from Scottish Power and despite lower domestic wholesale prices.

It made net profit of 2.35 billion euros ($3.46 billion) last year, compared with 1.66 billion in 2006. The average forecast in a Reuters poll of 10 analysts was for net profit of 2.17 billion euros.

Iberdrola said earnings before interest, tax, depreciation and amortization (EBITDA) rose 42.4 percent to 5.54 billion compared to a poll forecast of 5.48 billion.

Operating profit (EBIT) gained 39.3 percent to 3.70 billion euros.

Iberdrola trades on a price/earnings multiple of just over 20 times, against the DJ Stoxx European Utilities index which trades on a multiple of 15 times.

Iberdrola shares have gained 19 percent in the past year, including 6 percent in the past month, after it emerged that construction and services company ACS, a major shareholder, has talked to EDF about a takeover of Iberdrola.

ACS and EDF have admitted having contact, but the talks did not lead to an offer, which, according to reports, would have included selling some of Iberdrola's assets to Union Fenosa, owned 45 percent by ACS.

Recent media reports have played down the EDF connection, raising the possibility of an Iberdrola/Fenosa merger and asset sale to satisfy competition authorities.

Media reports have also matched Iberdrola with Germany's E.ON and RWE and Spain's Gas Natural.

Iberdrola's 80 percent-owned renewable energy unit Iberdrola Renovables saw its net profit fall 38 percent due to lower domestic power prices, while its core profit gained 1.3 percent to 564 million euros.

Iberdrola shares were 1 percent lower at 10.17 euros, while the Spanish IBEX was 1.4 percent lower.