Weak power demand hurts Iberdrola

 

Spain's largest power utility Iberdrola posted a 2.3% decline in 2011 net profit on Thursday, depressed by weak power demand in some of its core markets and rising commodity prices.

Still, falling demand for electricity in Spain and the United Kingdom was partially offset by strength in Iberdrola's growing business in the United States and Brazil.

Iberdrola's net profit fell 2.3% in the full-year to December to 2.8 billion euros, slightly below forecasts for 2.89 billion euros from a poll of six analysts.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) at the group, whose main shareholder is Spanish builder ACS with 19%, rose 1.6% to 7.65 billion euros, compared with forecasts for 7.69 billion.

Shares in Iberdrola, with a market capitalization of 28 billion euros, have fallen 2% since the start of the year.

Analysts say many investors are avoiding the stock until Spain's new government spells out plans to eliminate the utilities' 24 billion euro tariff deficit.