By Pietro Lombardi
MADRID (Reuters) -Spanish power company Iberdrola (BME:IBE) on Thursday raised its 2023 outlook for the third time this year and hiked dividends after increased renewable output and margins drove net profit for the first nine months 17% higher.
A European leader in green energy, Iberdrola has funded investment in renewable capacity and network assets by selling minority stakes in renewable projects.
Some business have grown cautious about renewable projects this year in the face of high interest rates that increase the cost of debt and supply chain problems.
But Iberdrola said on Thursday it expected double-digit net profit growth for 2023, excluding additional gains from asset sales, compared with a previous forecast of high-single-digit growth.
Net profit for the first nine months rose to 3.64 billion euros ($3.84 billion), supported by tariff adjustments in network operations, as well as increased renewable output and margins in Europe.
Iberdrola also approved an interim dividend of 0.20 euros a share, up 11%.
"The execution of the strategy presented last November is allowing us to grow, preserve financial strength and increase dividends," Executive Chairman Ignacio Galan said on Thursday.
The company, which also raised its guidance in April and July, will hold its next Capital Markets Day in March.
Iberdrola plans to invest 47 billion euros between 2023 and 2025, with a further 65 to 75 billion euros for the rest of the decade. In 2021 and 2022, it invested around 20 billion euros in total.
It expects to receive around 6 billion euros from partnerships and asset sales by the end of the year that will help the company close 2023 with a net debt of around 42 to 43 billion euros, roughly in line with 2022.
"Earnings are likely to accelerate on average hydro conditions, increase in average achieved prices in low marginal generation and FX," RBC analyst Fernando Garcia said.
($1 = 0.9483 euros)