During the first nine months of the year, Iberdrola gained a net profit of €2.042bn, up by 6.4% on the same period last year, due to good business performance and the reduction in operating and financial costs.

Recurring net profit rose by 17% to €1.9576 billion.

Gross operating profit (EBITDA) stands at €5.729 billion, a 4.2% increase which would grow to 6.7% if foreign exchange impact were excluded. Of the total amount, 76% come from businesses that are regulated or which have long-term contracts.

The group's revenues were €21.5377 billion (-9.1%) and its gross margin improves by 2.3% to €9.7405 billion. Funds from operations (FFO) stand at €4.7172 billion, i.e. a 9.5% increase compared to the figure for the first nine months of 2015.

The group's North-American subsidiary, AVANGRID (NYSE: AGR) in which Iberdrola holds 81.5% of its share capital, recorded an adjusted net profit of US$404 million in the period, up 45% . This strong performance brings AVANGRID's shareholder remuneration for the year up to US$1.728 per share.

Iberdrola's US subsidiary is the country's second largest wind operator, managing 6.3 gigawatts (GW) of renewable installed capacity, whilst supplying electricity to over 3 million customers in New England and New York. Additionally, AVANGRID has booked 2 GW in new wind turbines and will re-energize 350 megawatts (MW) of existing wind capacity by 2020.

Iberdrola continues to make progress towards executing its Outlook for 2016-2020.

In the networks business, the company is building new infrastructure in the United Kingdom – Western Link, South West Scotland, Beauly/ Denny – and it has stable, long-term returns for both the electricity distribution and transmission activities.

In the United States, in this area, the group is making progress on its projects in the States of New York, Connecticut and Maine, with new tariff agreements signed in the first case. In Spain, the new remuneration scheme for distribution has been approved and the company continues to roll out smart networks under its Star scheme: 159,100 kilometres of power lines and some 50,000 transformer stations.

In Brazil, distribution tariffs for the Elektro subsidiary grew by 9%, applicable from August.

In the area of supply, the group continues to design customised products and services for its 16 million customers and remains at the forefront in the digitisation process, with 9 million smart metres installed.

As regards the renewables business, which is one of Iberdrola's main areas for investment in the period, the group is building 1,064 new megawatts (MW) in offshore wind power, 1,923 MW in onshore wind power and 336 MW in solar photovoltaic facilities. Between the last quarter of this year and 2018, a total of 2,284 MW of new renewable capacity are expected to be commissioned.

On offshore wind, the highlight of the period is progress being made at the 350-MW Wikinger wind farm in German waters of the Baltic Sea. It is expected to be fully commissioned next year.

Iberdrola is also making progress on the East Anglia One project with 714-MW capacity, located in UK waters and expected to be commissioned in 2019. 70% of the supply contracts for the construction of this facility have already been awarded.

In addition, progress is being made on the Saint-Brieuc offshore wind farm project (496 MW) in French waters, which is expected to be commissioned in 2022.

In the regulated or long-term contract generation business, Iberdrola's installed capacity in Mexico will amount to almost 10,000 MW by 2020, once the projects currently under construction, with an aggregate capacity of 4,000 MW, are finalised. By the year 2019, the group's power production in the country is expected to be higher than what it currently generates in Spain.

Judging by the rate at which its projects are currently being developed, the company expects its generation capacity that is regulated or covered by long-term contracts to increase by 4 GW by 2018 and by 6.8 GW by 2020.

The first nine months of the year were marked by a positive performance in the regulated businesses.

The networks area presents an EBITDA of €2.935 billion, up 8.6% on the same period of last year. This result – of which 60% was obtained outside Spain – is due in particular to the good performance by Spain and the United States, where the business increased its EBITDA by 6.6% to €1.1926 billion and by 50.6% to US$973.5 million, respectively.

The generation and retail division has maintained similar results to the first nine months of 2015, with an EBITDA of €1.7338 billion (-0.1%).

In Spain, this magnitude has increased by 1.6% to €1.2002 billion, boosted by output increases in hydro (+56.2%) and nuclear (+4.6%). In the United Kingdom, the EBITDA for this area amounts to £187.1 million (up 2.6%) while in Mexico it dropped by 7.7% to US$350.6 million, due to lower tariffs.

The renewables division obtained an EBITDA of €1.1431 billion by September (down 3.3%), due to the poorer performance and the exchange rate effect in the United Kingdom.

Performance in Spain was particularly strong, with the renewables EBITDA rising by 15.9% to €410.2 million, boosted by a 5.8% increase in output. It was also strong in Latin America, where the EBITDA for the business stands at €55.1 million, up 20.9% thanks to the higher contribution by Mexico (+41.7%).
The group has maintained a solid balance sheet in the first nine months of the year, playing a very active role on the capital markets.

The company has issued €2.7 billion in long-term debt, with very competitive conditions, having become leader in green financing on the bond markets.

Net financial expenditure is down 22% on the figure for the same period of 2015, dropping to €583.8 million.

The financial ratios continue to improve: while the net debt/ EBITDA ratio remains at 3.7, funds from operations (FFO)/ net debt stands at 22.5% and retained cash flow (RCF)/ net debt at 19.9% .

The company continues to advance on its fight against climate change, having set itself the target of reducing by 50% its emission intensity by 2030 from 2007 levels and become carbon neutral by 2050.

Thanks to its commitment against global warming and for an economically sustainable model, Iberdrola was selected as industry group leader for electric utilities by the Dow Jones Sustainability Index, becoming the only European utility to have been selected in all 17 editions.

The positive results and progress made towards meeting its 2016-2020 Outlook are evidence of the success of Iberdrola's business model, which is based on a combination of growth, sustainability and predictability.

Business performance and management throughout the first three quarters of 2016 enable Iberdrola to confirm its guidance for the full year.

Thus, EBITDA is expected to grow around 5% from the previous year, with the group's net profit expected to rise still further by the year end.

This means that Iberdrola can meet its commitment to increase the remuneration it pays to its shareholders in line with its results.

To that end, the Board of Directors of the company has approved the launch of a new edition of its Iberdrola Flexible Dividend scrip scheme for what would have been the interim dividend for FY2016.

On this edition, the company is undertaking a commitment to pay €0.135 gross per free allocation right – 8% higher than the amount committed to the interim dividend for FY2015 – payable in January 2017.

This amount will be completed by the complementary dividend for FY2016, which will be submitted for approval at the next General Shareholders' Meeting, and will be payable in July 2017, if approved.