Iberdrola, S.A. (IBE) Earnings Call Transcript & Summary

[Foreign Language] Good morning, ladies and gentlemen. First of all, we would like to offer a warm welcome to all of you who have joined us for our 2021 First Half Results Presentation. And secondly, we wish you a safety and healthy period for all of you and your families. Moving now on to the reason why we are all here, our H1 results presentation, which will follow our traditional format. Firstly, we will begin with an overview of the results and the main developments during the period given by the senior executive team that we usually have with us. Our Chairman and CEO, Mr. Ignacio Galan; Mr. Francisco Martinez Corcoles, Business CEO; and finally, the CFO, Mr. Pepe Sainz. Following this, we will move on to the Q&A session. I would also like to highlight that we are only going to take questions submitted via the web. So please ask your question only through our web page, www.iberdrola.com. Additionally, we expect that today's event will not last more than 60 to 65 minutes. Hoping that this presentation will be useful and informative for all of you. Now without further ado, I would like to give the floor to our Chairman and CEO, Mr. Ignacio Galan. Thank you very much again. Please, Mr. Galan.

Good morning, everyone, and thank you very much for joining today's result presentation. Almost 18 months after the outbreak of the pandemic, I would like to begin today hoping you and your families continue to be healthy and sending our best wishes to everyone affected both personally and on behalf of the whole Iberdrola Group. Let me transmit a conscious but positive message on the global prospect of recovery as vaccination is progressing rapidly, recovery plans are already designed and starting to be implemented and more and more countries are focusing on green growth. Also, travel restrictions are being lifted, allowing us to return gradually to business as usual. Personally, I have already had the chance to travel in the last weeks to United States where I finally met some new members of our green management team in person. France and Germany, where we resume our result activities. This ongoing normalization will allow Iberdrola to continue executing our plans with even more determination, accelerating clean investment, promoting economic activity and creating jobs all over the world. All these is reflected in today's presentation. In the first half of 2021, adjusted net profit reached EUR 1,144 million, up 8% with a reported net profit of EUR 1.5 billion once we include nonrecurring tax items, mainly for the noncash impact in our deferred taxes due to the U.K. government decision to raise corporate taxes from 19% to 23% from 2023 onwards. EBITDA grew 10% to EUR 5,444 million or 15%, excluding COVID and foreign exchange impact, showing the group's solid underlying performance. Investment increased by 37% to almost EUR 5 billion, in line with our expectation of acceleration driven by electrification and green economic recovery. In the last 12 months, we have added close to 3,000 megawatts of new renewable capacity, and we have more than 8,500 under construction. We have also closed several transactions in alliance, creating new growth opportunities in our core countries and new markets. And we have continued reinforcing our financial profile and credit ratings. We support our shareholders to Iberdrola's strategic direction. The support of our shareholder Iberdrola strategic direction in governance and sustainability system was once again reaffirmed in the Annual General Meeting celebrated in June, with a quorum of almost 66% and the proposals, including the agenda approved, with almost 97.6%, a favorable vote in average. A final dividend of EUR 0.254 per share was approved in this meeting for a total annual remuneration of EUR 0.422 per year, a 5.5% increase compared to the previous year. As mentioned, EBITDA was up 10% to EUR 5.4 billion, thanks to the good evolution of renewables and networks. More than offsetting the negative impact of our Generation and Supply business from higher commodities prices, cold snap and COVID-19 effect on the retail debt. Networks showed a strong performance in all regions, thanks to the increased revenue for new rate case in mainly New York. The good performance of the Neoenergia in Brazil, driven by tariff readjustments and reviews, additional results from transmission investment and the contribution of Neoenergia Brasilia since the beginning of March. And finally, the expansion of our regulated asset base in U.K. Renewables EBITDA increased by 63%, driven by a new operating asset in low geographies like the East Anglia ONE offshore wind farm in the U.K., higher production from existing facilities mainly offshore wind and hydro in Spain with more than offset lower wind results in the U.S. and U.K. COVID had an impact of EUR 108 million in EBITDA, and foreign exchange impact reached EUR 287 million. Excluding both, adjusted EBITDA grows 15%, which, as I said, demonstrated capability of our business model to deliver increasing results in all these scenarios. By geographies, a rating countries like United States, the U.K., Spain, Germany, Australia, France contribute 80% to EBITDA, reflecting the group optimal geographic diversification. Building on last year record in the first half of 2021, we have kept spending our investment, reaching almost EUR 5 billion in just 6 months, 37% above the first half of 2020, with more than 80% allocated to renewables and networks. Networks, which increased 40%, was once again the largest investment destination with 46% of the total Investment in Network Rio in all our markets and especially in Brazil where EUR 410 million correspond to Neoenergia Brasilia. Renewables investment increased by 35%, thanks to the acceleration of our dozens of offshore and offshore wind and solar PV project, mainly in the European Union, United States, U.K., Brazil and Australia. Over the last 3 months, we have commissioned close 3,000 megawatt of new onshore wind, solar PV and batteries, driving a total renewal capacity to more than 35,500 globally. Addition includes 2,000 megawatt of onshore wind installed in several countries like Spain, Brazil, U.S., U.K., Australia and Portugal; 900 million of solar PV in Spain in Mexico; and 80-megawatt of battery store located at hybrid facilities with wind farm in the U.K. and Australia and solar PV facilities in Spain. On top of that, we have already more than 8,500 under construction on both sides of the Atlantic, of which 2,600 are in the offshore wind area. By geographies, more than 1/3 of the total capacity correspond to Iberdrola Energia Internacional in European countries like Portugal, France, Germany, Greece and Australia for a total of 1,000 megawatt of offshore wind project under construction, 1,200 of [ pump ] hydro and battery storage, and 650-megawatt offshore wind and solar PV. Almost another third comes from wind, power and solar in the United States, and the remaining 34% is located in Spain, Brazil and, to a lesser extent, as well in U.K. Once we have the capacity, we have already installed from the beginning of 2020 and the project, they are under construction already to build. We already have 22,000 megawatts, that is 80% of our target of new renewable capacity for 2025. And we continue adding new projects to our pipeline. We have reached a new record of 81,500 with a balanced mix of technologies and geographies. As you know all, in the last month, we have seen strong price increases in several commodities and raw materials used in clean energy project like steel, copper or aluminum. We have analyzed our position in detail. And in the coming years, we do not expect any material impact from this situation, therefore, now seems to be temporary. All group major equipment is purchased globally through long-term strategy agreement that allow us to benefit from better price and delivery time. In addition, we have advanced purchase orders worth EUR 18 billion to our suppliers in the beginning of 2020. As you know, the proposal of this was to provide then certainty to mitigate the impact of the pandemic in their activity and employment. But now, we are also benefiting for this relevant side effect of that decision. Also, we have fixed or hedged prices for high share of our purchase for the next years, isolating ourselves for any potential disruption in global supply chains. Taking all this into account as well as other protection included in the regulatory frameworks of our network activities, we estimate our exposure to lower -- is lower than 4% in our total investment plan up to 2025. This is a particularly relevant large-scale project like offshore wind farm. In this respect, let me say that our projects under construction with total 2,600 megawatts have no relevant impact. All of them are progressing according to plan. Saint-Brieuc with 500-megawatt is already being built in Brittany and will be operational by 2023. The manufacturing of the offshore substation and other components is progressing well, and we have started installing the foundation. In the United States, Vineyard Wind, we will become the first largest scale offshore wind farm in the country, began construction of the coast of Massachusetts after completing all permitting and authorization process in May. And a few days ago, we signed with local union the first project labor agreement for an offshore wind farm in United States with attendance of the President Biden climate adviser, Gina McCarthy, and the several congressmen for Massachusetts as well. We have -- we are also moving forward with our second offshore wind mega project in the United States Park City Wind off the Coast of Connecticut. And a few weeks ago, BOEM issues a notice of intent to proceed with the primary permitting document for the project and the design and procurement process are ongoing. As you know, both projects already have secured long-term PPAs with local distribution companies. Finally, Baltic Eagle in Germany is also progressing as scheduled. We have signed as many supply contract that started the construction of the social station. We expect the permit from the Federal Environmental and Marine Authority by September, and we have 2024 as full commissioning date. Additionally, we are working on different offtake opportunities to ensure routes to market for all the projects in our pipeline, like several auctions and tenders that, in some cases, include also seabed rights for new investment opportunities. In Europe, we are participating in the auction and will close after the summer in Germany with a preferential right inside of our Windaker 300-megawatt project. We are also ready to participate in the full round of contract for difference in the U.K. with our 3,100 East Anglia Hub project. And we are preparing bids in several process to add new pipeline, giving us growth opportunities for the second half of the decade. This is, again, for example, of Scotwind leasing round in the U.K., which includes rights for fixed and floating project where we have already reached a partnership agreement with Shell or the auction scheduled for the last quarter in Denmark, where we have an alliance with Total. In the Netherlands, in early 2022, again with Shell. Also, Iberdrola has already been prequalified for up to 1,050 megawatts in Normandy, France, building on our capabilities in this country. We have also built new platform of other countries like Poland and Ireland. We have published ambitious target for the coming years, giving us further opportunities for potential growth. And we are also building an optimal position ahead of the auction expected in U.S. and Asia Pacific market. We already have 3,600 in Vineyard Wind area eligible to compete in tenders in the U.S., like one already opened in Massachusetts for those expecting Rhode Island for 2021 and 2022. Also, we have 2,000. We are ready to participate in auction in the next 3 years in Japan. We are working on the forthcoming tenders in Taiwan to secure new pipeline there. Finally, other opportunities are arising in the U.S., like Bight area lease sale for over 7 gigawatts of the State of New York and New Jersey. As anticipated, last quarter had a progress in multiple alliance with companies from several sectors, willing to improve their carbon footprint and take advantage of the investment opportunities arising from electrification. This is the case of leading Spanish insurance company, Mapfre. We have formed a co-investment vehicle to accelerate the build-out of solar PV and offshore wind -- onshore wind in Spain with a target of more than 1,000 megawatts just in the first phase. In the last month, we have already allocated 225 megawatt of this vehicle, and 100 megawatt will be integrated in the third quarter. For Iberdrola, this alliance provide visibility to the value of our pipeline as well as a new growth platform, optimizing our financial structure and generating additional revenues from development, construction and maintenance of the projects. We are also expanding our other alliance to promote decarbonization with companies from different industries like energy, where we are partnering with offshore wind development, as I have just explained. Chemical and manufacturing for the electrification of industrial processes with heat pumps, electric boilers and elements along with dedicated PPAs, and for the use of green hydrogen in high-temperature processes. In zero-emission mobility, we have close agreement with the leading car manufacturers like Volkswagen, Renault, Mercedes and Irizar in heavy transport. And with public administration as Glasgow City Council for [indiscernible] bus fleet, retail company like Mercadona, Makro. And developments of electric charging systems such as Wallbox, a company which Iberdrola is a relevant shareholder and that will be soon trading in the new stock exchange. Additionally, we have signed relevant agreements like the one with Cummins to install in Spain one of the largest electrolyzer manufacturing plants in Europe. The consensus about the need to speed up decarbonization is becoming unanimous, involving government, citizens and investors who are pushing for more sustainable and electrified models. There is a clear political support to green investment identified as a great opportunity to generate wealth, employment, competitiveness and better social models. All major economies have committed to achieve net zero emission and are accelerating their common reduction target. Also, several governments are organizing business summits to attract international green investment in the context of increasing competition for capital like Choose France organized by President Macron, which I attended last month in Versailles or the U.K. summit to which I have been invited next October. All countries are also putting investment in renewables, network storage or green hydrogen at the center of daily recovery plans to build back better from the pandemic. The EU, the Next Generation funds, the U.K. Green Industrial Revolution or the American Jobs Plan are 3 relevant examples. The sense of urgency is higher than ever. The international agency had just warned that the CO2 emission for electricity generation will increase again by 3.5% in 2021 and by 2.5% in 2022, which would lead to all-time high. To mobilize a huge investment required in the transition, it's also fundamental to help full consistency between energy policy and regulatory frameworks as well as more agile permitting processes for greenery cleaner projects. The European Union is probably the best example of the execution in this respect. Shortly after adopting new climate law, the increase of the EU emission reduction target from 40% to at least 50% represent by 2030. Last week, the European Commission published the Fit for 55 legislative package to deliver on this commitment. As President [indiscernible] has highlighted, Europe is now the first continent that present a comprehensive architecture to meet the climate ambition. The package include legislative proposal to reaffirm carbon price as a fundamental instrument to cut emission in the European Union, strengthening the emission trading system for industry and power generation and creating a second ETS on buildings and road transport. It's also proposed measure to increase the share of renewable sources in energy mix, rising binding targets from 32% to 40% by 2030 and energy efficiency to 36% by 2030 as well, or to promote electric mobility with a target of 100% of zero emission new car by 2035 and specific objectives to deploy charging infrastructures. Finally, the package also covers energy taxation, one of the most relevant pending reform in the EU with an ambition plan to comply with a pollutant-paced principle and increased consistency among the member states. We expect all these proposals to progress in the coming months. Other countries have also published relevant regulation in the last months. Like Brazil, which is preparing a comprehensive set of measures to minimize impact of the current drop. As you know, last December, the Ministry of Mines and Energy, MML, the regulator renegotiated the debt outstanding from the past hydrological risk through the extension of concession. Now although [ rationing ] is currently not expected as new power plant and transmission line make the situation very different compared to the previous droughts. The government has created a committee with different minister to monitor the situation and has reviewed the system of flags, increasing surcharges to customers. In the U.K., the sector appealed to some aspect of the RIIO-T2, linked in mainly to regulatory returns is ongoing. And all distribution companies have submitted draft business plan to AGM for the next regulatory period with increasing investment in the range of 15% to almost 50%, 30% in the case of Scottish Power. In Spain, the Climate Change and Energy Transition Act was finally approved with remarkable consensus. And the build for creation of a national fund for the sustainability of the electricity segment is progressing through the legislative process. This measure will distribute the cost of renewable currently almost fully supported by electricity bill among all energies, allocating the carbonization effort fairly and establishing a level playing field. In addition, the government recently submitted a draft bill that would impact nonpolluting technologies [indiscernible] to pay from CO2 they do not emit. As stated by rating agency analysts and several organizations, these unexpected changes will seriously harm the regulatory stable interpretability and legal certainty, which are essential to attract green investment and to guarantee security supply in the coming years. For the moment, this proposal is still open, and I am confident that over the process, a balanced solution will be reached. Fully consistent with European guidelines, in accordance with the principle polluters pay, but whatever does not pollute pays as well. In U.S., the Connecticut Regulatory Authority approved new rates for our subsidiary until 2023. Also in line with other state, Resiliency Bill was passed in New York, asking all utilities to identify climate change vulnerabilities and proposed 3 years plan to increase investment related with a strong impact. This will be an opportunity to improve the system security of supply. The transaction with PNM Resources, the New Mexico and Texas utility is progressing well. All federal authorizations have been received and the Public Commission of Texas also approved the merger, having only pending the approval of New Mexico. We expect final closing in the last quarter of the year. Moving to the group financial performance. The resiliency of our business model, strong cash generation and our growing balance sheet management measures resulted in an even stronger ratios. Operational cash flow grew 8%, reaching EUR 4,246 million, leading to an improvement of 160 basis points to our FFO -- to adjusted net debt to 23.6%. Following our performance, credit ratings have referred our day rating for Iberdrola. In addition, our liquidity position reached EUR 17.6 billion, securing access to financing in very competitive terms. Since January, we have also signed EUR 10 billion of new green financing sustainable commercial [ PayPal ] and credit line linked to sustainability indicators, consolidating our global leadership in green and sustainable financing with almost EUR 32.4 billion outstanding. As part of our commitment to environmental, social and government criteria, we have been the foundation of our business model for decades, in line with the 17 sustainable demand goals now fully integrating our strategy. Iberdrola was the first moving in the energy transition, having closed all our coal and oil plants well before competitors and investing heavily in renewable energy networks and storage. As a result, our emission currently stand at just 43 grams of CO2 per kilowatt hour, and we will achieve zero emissions ready in 2030, 20 years ahead of EU targets. Iberdrola is also the largest corporate issue of green bonds worldwide, and we have fully implemented the recommendation of the tax force climate-related financial disclosures. And we delivered this result, demonstrating the fighting climate change is the best way to create wealth and jobs. Since the beginning of last year, we have awarded purchase of EUR 18 billion, supporting 400,000 jobs globally through our supply chain. We see 6,000 new hires and reinforcing our commitment to learning and development with 4x more hours of training per employee than average in Europe. Finally, our government sustainability system continues to receive several international recognition from corporate [indiscernible] or the [indiscernible] Institute among others. And we are constantly adopting best practice in corporate governance. It matches our sustainability of diversity and inclusion. Our climate action with a new commitment for our Board of Directors to approve an update annually a plan with the aim of becoming carbon neutral. This one of the items approved in our last Annual General Meeting celebrating a month ago in a fully virtual format for the second time. Attendance was close to 66% of the share of the capital with a very high participation of institutional investor, mainly international. As I said, all the proposals received a massive support from our shareholders with an average favorable to around 98%. Another approved proposal was a supplementary dividend of EUR 0.254 per share, which added to the interim dividend of EUR 0.168 per share already paid, leads to a total remuneration of EUR 0.422 per share, a 5.5% increase versus the previous year. I will now hand over to CFO, who will present the group financial result in further detail.

Thank you, Chairman, and good morning, everybody. Let me advance before I start. Two nonrecurring tax impacts in the second quarter of the year. EUR 463 million corresponding to the U.K. deferred taxes approval, as the Chairman has explained, that will start on April 2023. So it doesn't have any cash impact in our accounts. And EUR 245 million positive after-tax impact due to the reversal of the retractive Spanish hydro canon corresponding to the years '13 and '14 after a court ruling in April. And it is reflected by -- with EUR 265 million at the EBITDA level and in the net financial results with another EUR 62 million. First half reported EBITDA was EUR 5,444 million, up 10% versus last year, excluding EUR 108 million of COVID impact and the EUR 265 million due to the hydro canon. Our adjusted EBITDA increased 3.8%. FX impact has been EUR 287 million. After the devaluation of real, more than 18% than the dollar, more than 9% while the British pound remained stable. Excluding also FX impact, our EBITDA would have grown around 10%, showing the real recurring performance of the EBITDA. Revenues increased 13.9% to EUR 18.7 billion and procurements 21.7% reaching EUR 10.2 billion. Gross margin rose by 5.7% to EUR 8.5 billion and 10.6% excluding COVID and FX impact. Net operating expenses rose 3.2% to EUR 2.1 billion as group's growth is almost compensated by FX positive impacts. Excluding FX, net operating expenses grew to EUR 109 million due to the contribution of new businesses, including Neo Distribução Brasilia from the second of March, Infigen and Aalto Power. Analyzing the results of the different businesses and starting by networks is EBITDA grew 10.6% to EUR 2.6 billion, an 18.5% excluding EUR 203 million negative FX and COVID impact. The latter will be partially recovered. EBITDA grew in all geographies. As you can see in the slide, Spain contributed 33%; Brazil, 26%; the U.S., 21%; and the U.K., 20%. In Spain, EBITDA was up 5.8% to EUR 836 million, due to the impact of EUR 25 million of positive settlements from previous years as a consequence of improvements in quality and regulated OpEx and 12% lower net operating expenses and despite lower remuneration that, as you know, has come down in 2021 from 6% to 5.58%. In Brazil, EBITDA grew 64% to BRL 4,351 million, driven by positive impact from tariff updates and inflation adjustment in our distribution companies and increasing contribution from transmission assets. Neoenergia Distribução Brasil contributed with BRL 50 million. In the U.S., EBITDA IFRS was -- or IFRS EBITDA was 13.7%, up to USD 670 million due to the increase in investments and to past costs recognition, but affected still by higher stocks than last year. That will be reconciled in the next years. Excluding COVID impact, demand EBITDA would have grown around 16%. U.S. GAAP EBITDA amounted to $813 million, $140 million over our IFRS EBITDA, mainly due to the difference in the timing of accounting of the levies that in IFRS are fully accounted in the first quarter and in U.S. GAAP through the year. Finally, in the U.K., EBITDA grew 3% to GBP 445 million, thanks to the higher asset base. Demand still affected by COVID will be recovered in '23. In Renewables, EBITDA rose 63% to EUR 2,005 million and 45%, excluding the negative FX impact, and EUR 265 million positive impact from the Spanish hydro canon reversal. This growth is driven by Spain, the U.S., Mexico and Brazil. Production increased almost 17% with 8.8% more installed capacity that reached 35,676 megawatts and a higher load factor due to hydro with higher average price in Spain and the U.S. In Spain, EBITDA was EUR 990 million, EUR 690 million over last year, thanks to higher price of the supply business and 29% higher output with 38% higher hydro, 12% higher onshore production and 138% higher solar production whose style capacity already has reached 1,430 megawatts. It also includes, as mentioned, EUR 265 million from the hydro canon accounted at the levies level. Excluding this nonrecurring positive impact, EBITDA would have still grown by EUR 425 million. In the U.S., EBITDA increased 42% to $448 million with positive contribution from the Texas cold snap, a new capacity and despite a 3% lower output with 2 percentage points lower wind resource than last year. In the U.K., EBITDA fell 7.7% to GBP 304 million due to a 16% lower onshore production and lower prices, partially compensated by higher offshore production due to East Anglia ONE contribution. Let me point out that it has been the lowest wind conditions in the last 30 years in the U.K. in this first half. In our International Energy business, EBITDA fell 2.9% to EUR 172 million due to lower production from Wikinger and higher development costs despite Infigen and Aalto Power increased contribution. In Brazil, EBITDA grew 30% to BRL 350 million, thanks to the extension of the hydro concession to recover costs from previous years. Finally, in Mexico, EBITDA rose 112% due to the higher operating capacity coming from Pier and Santiago onshore wind farms and Cuyoaco. Generation and Supply EBITDA decreased 41% to EUR 808 million and 38%, excluding negative FX and COVID impact. The business has been negatively affected by lower thermal output, higher prices negatively affecting our Spanish business as well as cold snaps in Mexico and Europe. On the positive side, the U.K. showed a better performance. In Spain, the EBITDA was down 58% to EUR 350 million with flat output due to the higher renewable production and energy processes at higher prices with output already sold at fixed prices and the additional negative hit from the Filomena Storm, while COVID improved its negative impact. In Mexico, the EBITDA fell 21% to USD 336 million, negatively affected by the Texas cold snap for around $70 million. In addition, there has been an increase in access fees of over $20 million. In the U.K., EBITDA grew 21% to GBP 135 million with higher sales despite COVID effect, mainly due to weather condition and improved margins, especially in gas. Excluding COVID, EBITDA grew 11%. Brazil added BRL 251 million to the EBITDA, highlighting the better performance from our CCGT plant and improvement of COVID impacts versus the half -- first half of last year. In our International Energy business, EBITDA was minus 16%, affected by cold snap, development costs and lower sales due to COVID. EBIT was up 20% to EUR 3.6 billion. Excluding FX, COVID and Spanish hydro canon, EBITDA -- EBIT grew 13.2%. D&A remains stable at EUR 2.2 billion, due to the fact that FX has compensated the 7.3% growth mainly due to the larger asset base and activity. Provisions were down 18% to EUR 203 million as consequence of the lower bad debt provisions related to COVID compared to the first half of '20 as collections are improving. Net financial expenses grew EUR 72 million to EUR 472 million, mainly linked to positive FX hedges in the first half of last year, partially compensated by other nonrecurring accounted for in the Q2, mainly the accrued interest from the hydro canon that amounted EUR 62 million. Debt-related costs remained stable, minus EUR 31 million due to the higher cost of debt that increased 19 basis points to 3.38% from 3.19% due to higher costs of our Brazilian inflation linked debt more than offset at the EBITDA level, compensated by a 5% lower average net debt. Our reported credit metrics improved due to the following reasons. First, the adjusted net debt decreased EUR 515 million to EUR 36.6 billion despite the investment efforts, thanks to the hybrid issues. And second, our resilient business model improving our cash flow generation. Our 12 months FFO grew 6% to EUR 8,625 million. Our adjusted net debt-to-EBITDA improved to 3.4x. Our FFO adjusted net debt grew 1.6 percentage points to 23.6%. Our retained cash flow over net debt improved to 21.2% and our leverage ratio strengthened to 41.6%. Adjusted net profit grew 8.4% to EUR 1,844 million compared to last year's of EUR 1,702 million. Adjusted net profit excludes extraordinary impacts, including COVID, hydro canon and nonrecurring items, but not FX impact as we consider FX part of the risk that brings being a global player. Reported net profit was EUR 1,531 million, 18% below last year due to the accounting of the U.K. corporate tax, as explained previously. Thank you very much. And now the Chairman will conclude the presentation.

Thank you, Pepe. To conclude, this result shows that in this unpleasant period, we have continued to make progress ahead our plans and delivered result in line with our forecast in the first half of the year. We have accelerated our investment in renewables adding 3,000 megawatts in 12 months with 8,500 under construction. And we -- and the rate case closed in the last month, for instance, in New York are driving additional investment and result in networks also boosted by the contribution of new transmission project. Both businesses, CapEx with ongoing improvement in operating efficiency has more than compensated the complex situation of Generation and Supply in the period affected by high commodity prices, strange weather and COVID-19. We've also managed to further improve of our financial strength are reflected in our key ratios and reaffirming our leading position in green and sustainable financing. And we expect this positive trend will improve even more in the second half as a result of the acceleration of capacity addition with 3,000 new megawatt expected in the second half and the recovery of wind resource to usual levels more than U.S. and U.K. increasing result in networks, reflecting additional investment in new regulatory frameworks and the normalization of business condition in retail, allowing to reaffirm today's -- our net profit guidance for 2021. But over the last month, we have also focused on expanding our footprint to create new platform and ensuring additional growth in the years to come. Taking advantage, increasing investment opportunity linked to the carbonization all over the world and our track record of innovate clean energy solution and new technologies such as offshore wind, confirming our role as an engine for industrial development and job creation. Fully in line with our 2-decade commitment to social market economy, the increase value for all shareholders, employees and the shares itself. In just 1 year, we have agreed large-scale corporate transaction in networks in the U.S. and Brazil, then strengthened our position into our fastest growth markets. We have also expanded our presence in offshore wind in new markets, from France and Germany to Sweden and Poland and Europe, Japan, South Korea, Taiwan in Asia, and we have reinforced our position in Australia. And we have leading presence in the green hydrogen value chains and the new initiative to promote electrification in transport and industrial processes. In other words, Iberdrola is today stronger in the businesses and the geographies that had driving our growth in the last 20 years. It has more enough option to deliver even higher growth rates in the 20 years to come. You can be sure that the management team and the 40,000 women and men who make up Iberdrola are more than ever committed to continue this success history. Now we will be more than happy to answer your questions. Thank you.

Let us say a few words on the news that have been appearing in the last weeks about the Zenith case. Maybe there are some questions on this as well. This is an issue of 17 years ago when at least 21 Spanish companies and some government bodies contracted and registered a legal security company called Zenith. In any case, from the moment Iberdrola knew about this in 2018, we did all the compliance and internal audit procedures as well as fully independent forensic by PwC. In addition, we have a legal opinion from the international law firm, Baker McKenzie, saying that there is no illegality or irregularity by members of the Board of Directors or senior management, and all the corporate governance procedures has been properly working. We are talking about an order of EUR 25,000 plus VAT for services provided in Romania, for an employee of a subsidiary, Iberdrola Renovables Energia, of a subsidiary of Iberdrola parent company, Iberdrola SA, so like a granddaughter. Be sure that we will take all legal action to defend in one hand the reputation of the company and on the other, the interest of our shareholders. We will continue informing you with fully transparencies as usual.

Let us now move on to the Q&A session. And the first question comes from Fernando Lafuente, Alantra, and is regarding the EBITDA guidance for 2021 after this strong H1.

I think in the first half, the results are progressing better than expected, as you mentioned. Operating performance continues to be very good. We have accelerated investment in capacity additions. We have new rate cases in New York and additional growth in transmission. We have improved our financial strength. So what we expect in the next month is higher renewable operating capacity and the recovery of wind resource, especially in the United States and U.K. has been very poor, the acceleration of network result as a result of investment in transmission, especially in distribution and as well as on the regulatory framework, which is going to be coming to force in the next few months as well. And I hope the improvement in retail after the normalization of the nonrecurring effect. With that, Pepe has already mentioned the cold snap, and we hope in the COVID as well. That's why, thanks to all these things that we're reaffirming our guidance for 2021, as I mentioned before.

Next question, since I have in mind be the record of people interested is around the CO2 draft proposal of [indiscernible] and it's coming from Alberto Gandolfi, Goldman Sach; James Brand, Deutsche Bank; Jorge Guimarães, JB Capital; Rob Pulleyn, Morgan Stanley; Javier Garrido, JPMorgan; Javier Suarez, Mediobanca; Harry Wyburd, Bank of America Merrill Lynch; Stefano Bezzato, Crédit Suisse; Elchin Mammadov, Bloomberg; and Jorge Alonso, SocGen. Summary are 5 main questions. First is chance to be approved. Second, timing. Third, has it been discussed with the European Union? Fourth, impact on Iberdrola. And finally, possibilities to be improved.

So I think the first thing I would like to say is that this draft bill is not a good news. I think it's a surprise to everyone after 3 years of a clear direction in energy policy. I think we've been already passing through a period, which have been very, let's say, abnormal because, traditionally, our regulatory authorities used to give surprises time to time. So I think that is not the case. That has not been the case. And suddenly, that was a surprise. A surprise for trying to solve something that is going not to solve. I think I would like to explain to you more or less what is the situation in this moment of the prices. So approximately 90% of the energy of Spain today is not affected by the spot prices because they are already fixed prices. From this 90%, approximately 15% are already residential, which I think were less than 10 kilowatts. That with the measure where the government has already taken at present, the diminishing for this, the VAT, they're not only not paying more, they are paying less, around EUR 5 less per month because they have already fixed price that we, the company, we are already absorbing because we make already this contract. We fixed with them. In the industry, the industry and the service, which is the 75% of the total energy consumed in the country is not at all affected because most of them are already fixed prices. They, therefore, agreed with the commercial companies or they already agreed with the operators. The only one which are affected is 10% of the energy, which are those residential customers without already the use what they call the PBPC, the price for the small consumer, which is regulated. And because of the decision of this government, the previous government, it's already supporting the volatility, hourly volatility of the market. Probably it's the only country in Europe. We have already such, because everybody is already using, as we had in Spain before already some kind of baskets of prices, which can already provide already a fixed price for a long period of time. So nevertheless, with the measures taken by the government in terms of reducing VAT and taking into consideration the 70% of the -- almost 70% of the bill is related to fixed prices, which is the regulated part of this one. Only 30% is affected by energy. So that represent with today's prices, which are already higher than those they were already the average of the previous year by EUR 30, EUR 40. The impact -- daily impact of those consumers is EUR 0.12 per customer daily. So it means less than EUR 4 per month. That's it. So I think that has a very easy solution, is to move toward prices, basket prices, which can already fix the price for those customers, which are more affected at present on that one. Saying that, I'm quite convinced then during the approval process that can -- during the process of approval, they can already been improving on the terms of, actually, the fact. The CNMC has already made certain technical improvement. We can already improve this situation. So I think in terms of the chances to be approved, I don't know. I think that has to pass through the parliament, and I think probably it's going to take several months. Now it's on the state council. We have to make -- make their own report, and I don't know how's long it's going to take. Related to you, of course, we are talking with you about that one. I think we are already just informing about the situation because it's precisely a contradiction. What about the Fit for 55 has already been proposed. I think Fit for 55 is precisely saying they apply the principle who pollutes pay. And I think that is who polluting pay and who is not polluting pays as well. And with the risk that with this law, why not in 5 years' time, somebody, whatever government, this one, another government can already as well try to do the same thing with the technologies, which are today being built. Or in other sectors, steel industry who actually already made already certain transformation of their production, reducing CO2, using another kind of thing. They have to pay because now they are benefiting of the higher prices of carbon. So I think it's something, which is absolutely contradiction, and we have already been, of course, explained that European Union. In part Iberdrola, we should see what is the result of that one, but certainly, it's going to be several hundreds of millions of euros, and that is happening. But I think we have to take certain decisions because in certain situations of low gas prices and high prices of carbon, even the income or their revenue is going to be less than the tax we have to pay. As you can see, that is already a situation. Then we have to be very careful because we cannot be ready to produce in a situation in which every megawatt we produce is more -- you have to pay than we have already to receive. And the positivity to be improved, I'm sure then that is -- there are already possibilities because I think I understand the position of the government. They are already pressed because of these prices. But the point example is to explain what I'm saying. The impact of these prices is only to the 10% of the energy already sold in Spain. And that is representing EUR 0.12 per day per customer. And that is easy to be solved, making already a basket of energy using the forward prices, which are lower than those prices we have today or using another thing that we offer, for instance, for this short -- for this small consumers using, for instance, a fixed price for nuclear as the French are already doing or other countries are already doing. So there are solutions, we can already achieve the same result without making already this solvency on the regulatory orthodoxy, which are already generating. I understand your position already. Nervousness, which has not already been in line what has already been done up to now [indiscernible] has been very orthodox and doing the things very well in the right direction in all the bill we have been passed up to now from this government.

Next question comes from of Rob Pulleyn, Morgan Stanley; Harry Wyburd, Bank of America Merrill Lynch; Elchin Mammadov, Bloomberg. Impact of the inflation in our business.

So certain, the global ration in supply chains caused by COVID-19 has increased, as I mentioned, the raw material prices in the short term. My feeling is that is going to be correct progressively. I said we have not expect significant things in 2021 and 2022 in our exposure. And as said already, by 2025, the numbers we are making with today's situation is just 4% of our -- in our investment plan, so which I think is something which is already digestible. I think we -- most of our key monies purchased globally. We have already advanced orders, as I mentioned, for EUR 18 billion. So it's in the beginning of 2020 with the prices were lower. All our investment decision under construction is made with a very high share of the CapEx cost already fixed. I think I would like to say 80%, 90% of those ones, which are in construction, is already -- all these already fixed. And as well, major equipment contracts have some kind of sort of price indexation with generally [indiscernible]. I would like to say one project, which I think is the -- we don't think in my mind, which is already -- can be affected, which is already -- which is committed to be already in operation in 2025, which is Park City Wind offshore. We have the PPA signed, but we have not still already fixed decide all in purchase, all the equipment, et cetera, not the turbine, not the substation, not the -- all the infrastructure. So -- but I think from now, still we have a few years before we started the construction. I think we expect that this situation improve. I think, by memory, it's the only one which can be already affected, but I think it's a minor part in comparison with the total investment we have to make, which I mentioned is almost 80%, 90% are fully hedged and fully covered in this moment. So also, I think in the -- that increase in price is becoming structural for the future. So I think that certain will be already reflected in pricing. In the same manner, then it was already decreasing prices when the equipment reduce the price as well, so -- which I think -- I would like to [indiscernible] in the sense that from now to 2025, almost all our investment is already covered with the exception of this Park City by memory, which I think that one which is already the most important. And if it's structural, the prices in the future will be adjusted according with that one. So according with increase in the raw materials.

Next question comes from Alberto Gandolfi, Goldman Sachs. In light of the European Union Recovery Fund money, can you tell us what upgrades to investments do you envisage from it? What could be the EBITDA or net income upside from this in the period 2022, 2026?

So I think, as you know, the Spanish Recovery Transformation Resilient Plan has been already approved by European Commission, and we know the government -- Spanish government is working on the processes to allocate these funds. I think you know that Spain is going to receive close to EUR 9 billion in the next 2 months. And we are already in this moment responding to the request for proposal linked to our business. As I mentioned in last presentation, we have probably presented several projects. I think 175 projects. I think it was 180 projects in very different field from floating offshore, wind, green hydrogen, electric mobility, energy storage, altogether can already mobilize close to EUR 30 billion and generate something like 60,000 jobs. But I think I would like to stress that our business plan is not dependent at all of this project. So I think that will be something more if we get some of those things will be an upside in our plan. I think no one of those are already included in our business plan. I think I don't know how you're going to take. I think another day, it was announced something on the area of the car industry for electric vehicles. But I think even in that one was announced the total amount. They would like to allocate in that one, but they still has not already approved any other project because they have to be made under a competitive system. So which is still we don't know how it's going to be the system, and we don't know much about that one. Sorry not to be able to say more because, unfortunately, we have -- it's one of the secret better maintain. I think we have not all information. Everybody is talking to me about the same thing, said, "Well, with your relation with the government, you have to know something." I don't know anything. So even in some of the project, theoretically, we are already part of the one has been announced. I think we don't know how, when and which place is going to be built. So I'm sorry not to be able to say more because I don't know more about that.

Jose Javier Ruiz, Barclays send this question. Could you update on the closing of PNM acquisitions? Will PNM have to increase the benefit to rate payers during the negotiation?

Do you talk about PNM?

PNM, you're right.

So well, I think it's not -- no changes from our previous conference call. I mentioned already, we have all the federal permits, which is something like 20 or 25 permits of different areas. We have already the permit of Texas, and we have already are now in talks with New Mexico. I think their hearings expected by 20 or 22 of August. And I hope in this hearing, the thing will be clarified. We are expecting that all will be already clear. And I think -- and so I think where expectation is in the fourth quarter to have already just to complete all this one. But I think it's -- I think that is what I can say about PNM.

Okay. Next question comes from Manuel Palomo, Exane; Javier Garrido, JPMorgan. I think that has been almost answered in your premium -- when you talk about the CO2 clawback draft legislation, but I'm going to read it. High power price environment in Spain. Can you elaborate on the expected impact of the current high power prices in H2 2021 and in 2022? When do you expect to start to see the benefit in your earnings, if any? News about how the Spanish government will ease with a strong increase in power prices. And how do you expect the wholesale market to evolve in the coming years with the expected increase in renewables installations?

So as I mentioned, I think my feeling is that, that is a temporary situation. I think it's mainly due to these high commodity prices. And I think the forward prices, I think, in the case of the gas, as far as I know, is due to the lack of the stock. The companies in the countries are already filling the stock where they are already at minimal. So -- but I think something I would like to say very clearly is that utilities of companies like ours, so we are not benefiting of these high prices. I think that is something I would like to stress very strongly. I think we are, I think -- what I mentioned before about the consumers, 90% of the LNG already not affected, it's because we are already absorbing this cost. And that's why, among other reason, why our retail business has been affected negatively on that one. So I think a part of that one, you know the situation we faced at the beginning of the year with Filomena in which we had already as well just very high prices and high demand. And I think we are not able to -- we have not hedged all this demand. And that way, we were forced to buy this one. But also in those what we are already just -- we have to produce. In some cases, we are not enough and that we are forced to buy. So I think we are affected negative on that one. I think that is something I would like to stress because the high prices is not already improving our result. Today's high prices are already affecting negatively our P&L globally. I don't know, Paco, you would like to stress something more in this respect.

No, I think I have nothing more to add. That's the situation, and this is what is going -- what we are suffering this year. So...

This question comes from Alberto Gandolfi, Goldman Sachs; and Javier Suarez, Mediobanca. And it's a follow-up of our introduction that we make about the Zenith case. Can you give us your read of what is going on with these court cases against Iberdrola in Spain?

Well, as Ignacio mentioned, we have been reading about this issue in the press for almost 3 years without having access to the dossier because we were not part of the process. Even if we ask to be part of the process, the judge doesn't deny to be part of the process. So finally, we have access to that one. And as Ignacio said, during this period, I think without having access to the dossier, we put in place all our corporate governance and control procedures from an internal audit to compliance, and even we use already independent forensic made by PricewaterhouseCoopers. Also, we have already -- as you can imagine, we have already had legal advice from national and international law firms. And also, we have already got a legal opinion from Baker McKenzie. I think, Ignacio, that is on the documents that we presented.

That's right.

So you can repeat that one. All of them, internal and external law firms, the legal opinion from Baker, all of them have read the same conclusion. Nothing illegal or irregular was done by any member of the Board of Directors or senior management. And the government procedures are working properly. I think that is what I can say. I think once we have already -- that is the information we can already say. I think we have nothing illegal or irregular was done by no one member of the Board of Directors and the management. And the government procedure has already worked properly. So I can tell you, we have already had something like 40 meetings of the committees, the Board, and we have already analyzed and talk about that one without having the access. When we have access to the dossier, no new findings were there. We have not really properly analyzed. That's it.

On Page 21 of the presentation, you can find this document, legal opinion from Baker Mackenzie. Next question comes from Elchin Mammadov, Bloomberg. Output and prices hedged in the coming years.

Paco?

Okay. Thank you, Chairman. For 2021, we have 100% of estimated price-driven output already hedged at around EUR 75 per megawatt hours, let's say. And for 2022, we have 3 quarters of the year around 74% of estimated price-driven already hedged at above EUR 80 per megawatt hour. This is in Spain. And in United Kingdom, we have almost 100% of the 2 years already sold or closed or hedged at similar prices in pounds.

Next question comes from Jorge Guimarães, JB Capital. Is it possible to clarify the impact of hydro canon recovery at EBITDA and net income? At EBITDA, it was EUR 265 million and at net income, EUR 245 million. Is the difference just coming from taxes or is also something included in financial results?

Pepe?

Let me say what we have is EUR 265 million gross at the EBITDA level, plus EUR 62 million gross at financial expenses. So in gross terms, it's EUR 327 million divided to 65 EBITDA and 62 in financial expenses. If you take away the taxes, then it's -- this EUR 327 million becomes EUR 245 million, which is what we are stated to compare the impact with the EUR 463 million of the U.K. taxes that is also net. So that is how you reach the EUR 245 million.

Stefano Bezzato and Jorge Guimarães. Stefano Bezzato, Crédit Suisse; and Jorge Guimarães, Haitong Capital. Can you elaborate on the drivers for the very weak performance of generation and supply in Q2 in Spain? How much of this is driven by margins being transferred to the renewable business?

Paco?

Yes. In Spain, the key question has been, let's say, 2 halves. The first half is the transfer or the contract between Renewables and Generation and Supply business, and this is -- this accounts for EUR 200 million. And the other half, the other EUR 200 million, comes from 2 main issues. One, let's say, 15% of this, about 30 is technical constraints. It's due to the fact of the higher payments we have made as a supplier because we have had generation that has been forced by the grid in Spain for the network constraint. And the rest is about EUR 170 comes from the fact of having sold the energy last year for the future -- I mean, for this year with an environment of very low prices. And that's the big fact that when you have to solve -- set to sell the future and the environmental or the prices of the moment where you are, the spot price and even the forward prices are very low, you are not able to pass all the margins and all the costs. Well, all costs for sure, but all the margins you want. So that's the other 170. So that's account for 200 plus 200. So 200 has no effect because appear on renewables and the other 200 are the one that I mentioned.

Maybe we ask -- I'm sorry. Rob Pulleyn, Morgan Stanley. Yes, you can drop. What the COVID impact are in H1 and why they are still 2/3 of the level in H1 '20 last year, rather than having fallen more?

So unfortunately, we are saying that anything is moving back to normality, but I think the first time that our people, and the people are able to move freely in some countries like Britain is very recent. Same in the United States, I think in which still there are already certain restriction of the people to go to the office, et cetera. And I think the main consequences of the COVID part of the demand in the past already is the bad debt in retail. I think the bad debt is already -- and I think if the people cannot really go to try to recover that one or the people cannot go to the bank for paying, et cetera. So I think we are already facing this problem. The things are recovering. I think the amount is less than it was, but still it's already time for being full normality for already mainly for diminishing this, but that because we are collecting as much as -- to come into the normality in collection. So there are countries which is going better, so which is the case of Brazil, but I think it still is not full normality on that one.

Next question comes from Alberto Gandolfi, Goldman Sachs. Would you consider a spin of the offshore business to fund your 22 gigawatts pipeline?

Well, I think that question was passed to me I think in the last presentation. As I mentioned at that time, we are always studying all potential measures to optimize our balance sheet and our financial profile. I think certain areas are attractive this one. So we are already looking with a very, very detailed on that one. So why? Because I think in offshore, we have 1,300 megawatts in operation. Almost -- they are contributing already EUR 600 million EBITDA. They are -- we have 2 -- more than 2,600 under construction. As I mentioned, there are at least 12,000 megawatts offshore, which can be already in operation by 2030 with almost EUR 30 billion investment. I know decision is taken, but we are analyzing with very detail. And I think if we take any decision, we will inform you about that one. But certain is an area that we are already analyzing, and we are an area where we see that we have some hidden values inside and, in due time, we will see how it can be already been materialized. But nothing is decided yet.

Manuel Palomo, Exane BNP Pariba. Reasons to enter in the Vietnamese market? Could you please share your views on the update renewables target in Japan?

So I think I used to say that the pandemia during this time of confinement, even if our money people has been unable to travel, but they feel the new technology has already facilitate to then to do a lot of deals, a transaction. I think our expansion in Asia has already been almost made, thanks to the pandemia period. I think we went to Australia. We went to Japan. We went to Taiwan. We have reached agreement with Korea. We are now looking from this in Vietnam. And what is we are seeing there? I think it's a country where they are already given potential growth in this one. I think the agreement with this is a portfolio of almost 550, 600-megawatt. There are 5 wind farms and 50-megawatt of floating photovoltaic project. And I think we expect to start off provision between '22 and '24. You have to know that we are now has an additive of 20 gigawatts renewable by 2030. It's already -- the regulation there is quite attractive, which I think that can already provide us this possibility of being in this country. Same thing in terms of Japan. In Japan, I think is a target capacity almost 45,000 megawatts already of offshore, which I think we would like to be part of these possibilities. Always already the same one. We would like to go to countries with a large -- with a good potential in which we can use our skill and knowledge and capabilities. I think certain, we have already developed certain knowledge skilling capabilities in offshore, and we would like to come to those countries. We can already provide legal certainty with attractive regulatory environment and using our skill and our experience. And that is what we've been doing, I think, during this time with this Asian expansion already.

Question 15, 1-5, Harry Wyburd, Bank of America Merrill Lynch; and Javier Suarez, Mediobanca. Can you elaborate in your view of the EC's Fit For 55 proposal and the implication for the group?

Well, I think we've been during 20 years already moving in one direction. We was not precisely the direction the most of government and competitors and business leaders were already just supportive. They were already just against almost everybody in this direction. For us, seeing this sort of legal regulatory framework, I think we see as a great opportunity because that can already generate wealth, employment and investment. And we can really use all our skills and accelerate whatever we have been developing for many, many years. Certain, I see now is a consensus globally, political consensus to promote decarbonization. But my concern on that one, and I think that is something which is well reflected apart of the objectives in terms of renewables, in terms of energy efficiency, in terms of the new ATS sectors as well, I think it's the fact that they're trying to make a full consistency between policies and regulatory framework in fiscal framework as well. So the fact that they are saying that the intensive taxation, any modification, any taxation have to be approved by the 27. I think it's a good news. I think we can avoid these situations surprises than we've been already supporting in our country for so many years. So with everything to transform Europe in a real energy union, I think that should be great because we can already move across Europe with much more facility than we are already today. We have already with such differences between countries in taxation, with such differences in the permitting process, with such differences between what the politician said the regulation facilitate. I think all those things as much as can be unify, standardize and facilitate the things as much better should be for achieving the net zero and achieving the target of decarbonization. If that is not happening, it should be impossible. I think I mentioned before in the last International Agency report is saying that the carbon emission in 2021 continues increasing, and the carbon emission in 2022, if nothing changed, continue -- is going to continue to increase. So when we move fast, if we try to unify all our effort to apply the principle who polluters pay, we cannot achieve that one. With measures, which are already just this incentive in those which are already not already polluting. If we're already trying to maintain those ones, which are polluting in a, let's say, in a better situation, we will not achieve the target. So I think that's my point. So I think it's ambitious plan, but it's reflecting the demand, social demand, for trying to diminish that one. You see the situation of float in Germany, so which I think all those are dependent on that one. Another day, one of our board members were mentioning that in Brasilia, they had never seen already storm of -- I don't know [Foreign Language]. I don't know, a kind of snow in Brasilia. So it's ice already. Yes, raining ice. So it has never happened, but has already happened in Brasilia and it was affecting service during this time. So I think that's why I think it's a good news...

Hale.

Hale. Sorry, hale is that right word. So Brasilia, we hale. So it's incredible. So...

Next question comes from Javier Garrido, JPMorgan. AVANGRID has outlined the sale of 780 megawatts of renewable developments. What gains would you expect of the sale? And when should they be booked in your accounts?

Well, I don't know the detail, but I think it's -- we are always looking at opportunities to maximize the value of the pipeline. I imagine that one should be something, which probably they have not really been interesting for them to build. And therefore, they find out somebody, which are already to pay something for development, and they see that this better for -- to obtain a better return, selling the development instead of building and operating that one. I don't know the detail, but I think you like -- Ignacio, you can already say. But I think it's something that we will continue the opportunities on that one. But I don't imagine in much, but I think you can already inform that one to obtain information.

I don't know what it is. So last question comes from Jorge Guimarães, Haitong Capital. How is the [ Tamaga ] hydro project in Portugal evolving? When should we expect it to be totally online and producing? 2021 for the first stage and 2023 for the final one.

So I think as far as I know, it's going well. We've been not allowed to travel to Portugal. I plan to go this -- during my summer holidays. I'm already just very close to Portugal, and I will try to use one of my holiday days for visiting that one. But as far as I know, the thing is going very well. I think the information I got is that the one of the power plant, [indiscernible] is -- this year is going to be already just in operation. It's already 100, 300 something megawatts. And another one, Daivões, I think probably as well can be all ready by the year-end. It's another 100 or 120 megawatts. And the thing which still we are already willing for the -- so the major part of the project is going to be by the year-end already in operation. And what we call [ Alto Tamaga ], which is the big dam, which is already at the north of another two. I think they are already now in construction. And that the plan was to be completed by 2024, I think. So -- but I think the 2 first large group, which is where is the storage, I think they will be in operation by the year-end this year. But I can already next -- in the next presentation of results, I can really give you more detail because I'm going to visit that one during the summer.

Okay. So just please let me now give the floor to Mr. Galan to conclude the event.

So thank you very much for this -- for taking part in this conference call. If you have any doubt, as always, our Investor Relations team will be available for any additional information you may require. So we have not really have the opportunity to meet you before. Have a good holidays for those who are going to take, and we'll be in touch in the next presentation or results in October. So thank you, and good summer for everybody.

Thank you.