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

Good morning, ladies and gentlemen. First of all, we would like to offer a warm welcome to all of you who have joined us today for our 2024 9 months results presentation. As usual, we will follow the traditional format given in our events. We are going to begin with an overview of the results and the main developments during the period given by the top executive team that usually is with us: Mr. Ignacio Galan, Executive Chairman; Mr. Armando Martínez, CEO; and finally, Mr. Pepe Sainz, CFO. Following this, we'll 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. Finally, we expect that today's event will not last more than 1 hour, 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 Mr. Ignacio Galan. Thank you very much again. Please, Mr. Galan.

Thank you, Ignacio. Good morning, everyone, and thank you very much for joining today's conference call. In the first 9 months, our reported net profit reached EUR 5,471 million, up by 50%, with reported EBITDA reaching EUR 13.269 billion. In recurring terms, EBITDA increased by 11% to EUR 11,551 million, driven by strong operating performance across all our businesses. We continue increasing our regulated profile with Networks EBITDA up by 11%, thanks to a higher rate base and tariff increases, especially in U.K. and United States. Energy Production & Customers is also up 11% as a result of new offshore, new capacity in France and Germany and a better contribution from Iberia. Investment in U.S. and U.K. have significantly increased our exposure to A-Rated countries, which now accounts 82% of our recurrent EBITDA. We also made substantial progress to reinforce our financial strength. With total cash flow of EUR 13.821 million, up 69%, including the proceeds from asset rotation during 2024. Recurrent FFO increased by 13% to EUR 8,888 million, leading to an FFO to adjusted net debt ratio to 25.3%. And our current liquidity position remains solid, totaling over EUR 22 billion, more than enough to cover 20 months of financial needs. Investments continued accelerating over the last quarter with a clear focus on long-term growth. By September, organic investment are up 12%, reaching EUR 8.6 billion, more than half allocated to Networks, and we have recently completed key transactions in the U.K. and U.S. to continue strengthening our profile based on regulated activities or long-term contracts with revenue secured for 15 to 20 years. Yesterday, we closed the acquisition of Electricity North West, steadily expanding our presence in Britain. On top of that, the purchase of Avangrid Minorities was approved by more than 99% of the shareholders of the company at the Annual General Meeting. And in Renewables, we won 2 new offshore wind projects, adding 1,000 megawatts in U.K. and 800 megawatts in the U.S., that will be operational between '28 and '29. All in all, Iberdrola performance up to September, and our outlook to the end of the year, have led us to increase our interim shareholder remuneration by 14% to EUR 0.23 per share. As mentioned, reported EBITDA increased by 23%, reaching EUR 13,269 million with an 11% growth in recurring terms, guided by a strong performance across all businesses and geographies. Networks recurrent EBITDA also grew by 11%, thanks to tariff increases, mainly in U.S., U.K. and Brazil and the high asset base. In Renewables, we continue registering record of production. So far this year, we have already more than 2,300 of new capacity, mainly offshore wind, including the full commissioning of 500-megawatt, St. Brieuc in France and the installation of all turbines of Baltic Eagle in Germany, reaching total capacity of 476 megawatts as well. Our hydro reserves remained well above average levels. And our pumped-storage facilities are showing an excellent performance, up 23% year-on-year. Finally, we will continue to grow our long-term PPA portfolio with the industrial customers providing a predictable revenue stream. This growing operating result was driven by new investment, mainly in Networks with EUR 4,894 million invested, 25% up year-on-year. Although this 40% was located in the United States with around 25% investing in Brazil, a similar percentage in U.K. and the rest in Spain. Around 60% of Networks investment corresponds to distribution and the remaining 40% to transmission. After a 70% increase in this activity due to the additional investment in the NCC project in the United States. As a result, our Networks asset base grew by 7% up to September, reaching EUR 47.6 billion after the closing of the ENW transaction. With the U.K. and United States as main contributors together, both countries already represent 60% of our global network assets. Investment in new power generation reached EUR 4 billion, well diversified by geographies and technologies. With more than 50% allocated to U.K. and United States after a combined 35% increase in these 2 countries, mainly driven by offshore wind. We also made several moves to provide further growth over the second half of this decade. Like the acquisition, as I mentioned, of Electricity North West, located between our 2 current U.K. distribution licenses in Scotland and England and Wales and serving relevant urban areas like Manchester. And the purchase of Avangrid Minorities, which we expect to finalize in the next 2, 3 months. On top of this, the U.K. and United States continue providing us additional investment opportunities in transmission. In Britain, next December, we will present our plan for RIIO-T3 from 2026 to 2031, which investment then may triple the amount of the current regulatory period. In United States, we have the transmission investment approved in Europe that could reach $3 billion up to 2030. In offshore wind, we are on track to triple our installed capacity by 2030, reaching 6,500 megawatts just with a project we already have under construction, including the 2 new offshore wind projects of New England 1 and of course the Massachusetts and East Anglia 2 in the United Kingdom. We have also finalized 2 storage facilities at Santiago Jares and Valparaiso in Spain, adding around 2 million kilowatt-hours capacity. And we continue increasing our portfolio of long-term PPAs having signed in January more than 5 terawatt-hours per annum with Tier 1 companies from different industries like technology for an average of 15 years. As of today, we have already supplied 10 terawatt-hours per annum to tech companies covering their energy needs related to data and artificial intelligence. Building on this long-term relationship with companies from the technology sector, we are in well-advanced conversation for the creation of joint venture to facilitate then additional data center capacity in Spain. Iberdrola will contribute with land and network connection, participating also in the design and licensing processes and guaranteeing renewable energy supply 24/7 from our existing portfolio or new dedicated assets. The partner will hold the majority of JV, being responsible for the construction, the operation and the commercialization of the data center. In the last few months, we have already secured 615-megawatt of capacity in first class location around Madrid in the region of Aragon in the Northeast of Spain. We have pipeline for more than another 5 gigawatt-hours. We expect to give you more details soon on this business, what we already analyzed in other geographies given its potential as well. Implementing all these new investments and projects require strong access to supply chains, especially in today's market condition. In this context, our procurement planning and processes had allowed us to secure already close to 90% of all our network and renewable supplies through 2026, including all contracts for our offshore wind project, with which cover logistics and installation, 85% of our onshore wind turbines and solar panels and 95% of our procurement needs for transmission and distribution. Additionally, we have made significant progress for our procurement plan beyond 2026, with 90% of the key contract for our new offshore wind project, East Anglia 2 and New England 1 already secured. Also, in onshore renewables, where bottlenecks are less severe, we have a framework agreement that enabled us to secure supply chains as we reach final investment decision. And in Networks, we have framework agreement, firm offers and precontracts, allowing us to secure the relevant investment expected in upcoming regulatory periods, which will increase more and more as electrification accelerate, particularly in our key geographies. The Executive Director of the International Energy Agency recently state, we are entering in the age of electricity or as I have repeated for years, the 21st century will be the century of electricity, just like 20th century was the century of oil, and 19th century were the century of coal. Growth potential is immense with electricity moving from 20% of the total energy consumption today to 40% in just 2 decades. As a result, the World Energy Outlook, just published by international agency, predict the Networks investment will grow from $330 billion to at least $700 billion per annum by 2030 with renewable investment more than doubling as well. Government and regulators on both sides of the Atlantic are recognizing the potential of electrification to improve strategic autonomy and competitiveness and reduce emission, leading them to implement new frameworks to attract the massive investment needed. That is the case in the United States. The National Transmission Planning recommends multiplying the size of the transmission system by at least 2.5x by 2050, and the Federal Administration continues creating new incentives. So far, the IRA and the Bipartisan Infrastructure Bill have led to more than EUR 200 billion of investment. In United Kingdom, the new government has said very clearly that the power sector will be a key driver in its strategy to grow and in reindustrialization. As a result, they are preparing new measures to accelerate planning processes, facilitating the massive investment required to reach Net Zero by 2030. In renewables, up to 60 gigawatt-hours in the case of offshore wind, according to the government target. In transmission, with RIIO-T3 approval process on track, as mentioned, and in distribution. In the European Union, the recent Draghi report state the clean electrification can be a massive factor for European competitiveness. In the coming months, a commission will present its vision for a new clean industrial deal. In parallel, European Union continues to clarify which investment can and cannot be considered green, helping investors make informed decision in avoiding greenwashing. In this sense, the European Securities and Markets Authority, ESMA, recently issued new more restrictive guidelines to label investment as ESG. As you can see in the next to this presentation, Iberdrola met all these guidelines. In Spain, the new energy plan submitted into Brazil confirms ambitious target for the new renewable deployment based on significant increase in demand and electrification. For this reason, the plan also calls for additional network investment. We expect the new regulation underway in this business will create the right incentive to make this -- it happen. Finally, in Brazil, the government is making positive progress on the renewal of distribution concession, and the draft terms for the new contract published by consultation are in line with our expectations. The process will be completed by the second quarter of 2025. Moving to financial structure. Total cash flow reached EUR 13,821 million, up 69%. With recurrent funds from operation up 13% to EUR 8,888 million after excluding the impact of asset rotation and the recovery of U.K. retailer deficit in 2023. Cash generation has allowed us to improve adjusted net debt to EUR 46.7 billion, and we have over EUR 22 billion in liquidity, which is sufficient to cover our financial needs for more than 20 months. Given our excellent business performance and a strong financial position, our Board has approved a 14% increase in interim shareholder remuneration, reaching EUR 0.23 per share, will be paid by the end of January. As usual, on top of this figure, next summer, we will pay a supplementary dividend that will be approved in the Annual Shareholders' Meeting. I will now hand over to our CFO, who will present the group financial result in further detail.

Thank you, Chairman. Good morning to everybody. In the first 9 months of '24, as the Chairman has said, versus last year, EBITDA reached EUR 13.3 billion versus EUR 10.8 billion in '23 -- in the first 9 months of '23, and net profit, EUR 5,471 million versus EUR 3,637 million, growing 23% and 50%, respectively. FX evolution has had a minor negative effect on results, as they are already mostly hedged. The real has depreciated 4.5% and the dollar 0.2%, partially compensated by a 2.2% appreciation of the pound. A 25% improvement in procurement costs, mainly Energy Production & Client business versus a much lower decrease in revenues, 11%, thanks to our fixed price sales has driven a 5% increase in gross margin to EUR 18 billion, improving the growth trend of the first semester where gross margin was up 3%. Net operating expenses, excluding Mexico capital gain, rose 5.3% and 3.7% excluding not only the Mexico transaction but also reconciliation impacts in the U.S. due to the storm costs that are recognized at the gross margin level, positive pension adjustments and other Q3 impacts. Net personnel expenses increased 1.9%, but excluding pension one-offs in the U.K. and the U.S. reconciliation impacts and other minor impacts. Personnel expenses grew 4.5%. External services increased 7.3%, excluding also reconciliation impacts in the U.S. And other Q3 impacts, external services grew 1.6%. And other operating income increased 2.5% on a recurring basis. On a reported basis, net operating expenses improved 34%. Reported levies reached EUR 1,924 million in the first 9 months of '24 versus EUR 2,076 million last year, improving 7%, positively affected by sentences in Spain, EUR 79 million on the Hydro Canon accounted for in Q1 and EUR 183 million from the social bonus accounted in Q2. Excluding these court ruling levies, grew 5%, driven by the higher Hydro Canon as we have been producing more hydro, the 7% tax on Spanish production and the windfall tax in the U.K. Analyzing the results of the different businesses and starting by Networks, its EBITDA grew 11% to EUR 4,875 million, more than doubling the 5% growth in June after improving in Q3 in all countries, but especially in the U.S. and Brazil. Brazil accounts 32% of total EBITDA, followed by Spain, the U.K. and the U.S. But we consider recent ENW transaction, the U.K. will increase its weight to 27%. In Spain, EBITDA fell 1.7% at September to EUR 1,226 million, improving versus the 3.7% fall in June, thanks to a higher asset base and diluting the negative impact with a EUR 27 million positive one-off recognized in the first quarter of '23. In the U.K., EBITDA increased 20.1% to GBP 922 million, with higher contribution in distribution, thanks to the new ED2 framework and almost 4% higher demand and better net operating expenses, thanks to a GBP 58 million impact of a recovery of a provision made in Q3 '23. In Brazil, EBITDA grew 18%, improving the 3% rise in June to BRL 8,910 million with higher demand and higher tariffs in distribution and transmission, positively affected by BRL 983 million negative one-off accounted in Q3 '23. In the U.S., U.S. GAAP EBITDA increased 18.5% to $1,491 million, driven by the contribution of the new rate cases, mainly in New York. IFRS EBITDA was 14% up to $1,088 million, with higher contribution from rate cases more than compensating the negative timing effect due to IFRS accounting of costs, mainly commodities that are being recovered. There is also a $27 million positive one-off in pension expenses in Q3, only in IFRS. '24 9 months Energy Production & Customers business EBITDA reached EUR 8.4 billion compared to EUR 6.4 billion last year. As you can see in the slide, this has been a better recurring operating performance than last year. I want to point out that the business reached close to 85% production emission-free in the first 9 months, advancing in our decarbonization targets. In Iberia, EBITDA was EUR 3.7 billion, up 17.4%, with 5.7 terawatt-hours higher manageable renewable production, including pumping storage, lower procurement costs and already mentioned positive impact of court rulings, more than compensating lower prices and a 10.5% lower nuclear production driven by market conditions. 91% of the production in Iberia was non-emitting. In the U.K., EBITDA fell 20% to GBP 1,079 million, affected by the already mentioned positive one-off related to tariff deficit recovery in '23 and another negative one-off issue at our offshore wind farm East Anglia 1, that is already sold, not showing the recurrent positive evolution of the business with higher contribution in wind onshore and better prices, partially offset by the windfall tax. In the U.S., EBITDA increased 44% to $812 million, thanks to the positive performance of our flexible generation fleet and better prices that improved results despite the fact that renewable production was only slightly higher, around 1%. In addition, net operating expenses improved 16%, benefited from the negative nonrecurring breakup costs at the U.S. offshore wind farms accounted in Q3 of '23. In the rest of the world, EBITDA grew 48% to EUR 448 million, with 36% higher production due to the entry into operation of St. Brieuc offshore wind farm at full capacity since May and more onshore capacity installed in Poland, Greece and Australia. In Brazil, EBITDA decreased 7.8% to BRL 1,240 million as the contribution of a hydro asset following the swap with Eletrobras and higher wind resource after a good Q3 is not enough to offset the lower thermal contribution. Finally, in Mexico, EBITDA reached $2.2 billion. Excluding the transaction, EBITDA reached $306 million, affected by the consolidation of the assets sold on February 26. But the remaining assets still contribute around half to the previous contribution. EBIT grew 33% to EUR 9.1 billion and 14% on a recurrent basis. D&A grew 6%, driven by higher asset base in Networks and higher provisions. Net financial expenses improved EUR 514 million to EUR 1,152 million. Debt-related costs improved EUR 30 million as a consequence of a EUR 69 million reduction due to a lower cost of debt, 14 basis points, EUR 26 million linked to FX, mainly due to the Brazilian real depreciation, partially offset by a EUR 65 million increase due to EUR 0.5 billion higher average debt versus '23. And non-debt-related results got better by EUR 484 million, including EUR 230 million linked to FX derivatives. I want to point out, especially due to the Mexico peso that was hedged due to the big transaction that we did, which is fully compensated at the tax item. So there is a big gain here at the Mexican peso, but it is fully compensated in the tax item and a lesser extent due to the real. And another EUR 254 million related to capitalized interest, driven by higher investments, especially East of Anglia 3 and one-offs. During these first 9 months of '24, Iberdrola has done very successful operations in the capital markets, which allow us to diversify the investor base as well as maintain the duration of debt. This is a trend that we expect to continue, and as the Chairman has said, as we comply with the new ESMA requirement. In the annex, you have the details of how Iberdrola complies with the new ESMA requirements as a genuine green investments to be included in the ESG funds. Our reported credit metrics improved thanks to a EUR 1.2 billion decrease in our adjusted net debt to EUR 46.7 billion compared to September '23, together with the growth of our FFO as the Chairman has explained. As a consequence, FFO/adjusted net debt reached 25.3% versus 23.2% 1 year ago. Our adjusted net debt to EBITDA improved to 3.1x versus 3.3x. And our adjusted leverage ratio also got better to 42.6% versus 44.4% at September '23. Our previous guidance for '24 year net debt was EUR 47 billion. For year-end, nonorganic growth will be increasing net debt with the ENW acquisition EUR 2.5 billion already paid yesterday. The acquisition of Avangrid Minorities for EUR 2.3 billion is expected to happen either at the end of this year or in the first quarter of '25, but we are also expecting to finalize more asset rotation between December and the first quarter of '25 for around 25 -- sorry, for around EUR 2 billion. That will be offsetting partially the impact of the nonorganic growth acquisitions. We have different scenarios depending when average minorities is finalized and when we will account for the asset rotation. But in any case -- let me stress that in any case, we will remain with a comfortable rating of BBB+, Baa1 rating level, also helped by the improvement of our business profile with more regulated assets in countries with better ratings. Net profit, excluding EUR 1.2 billion net Mexico transaction, was EUR 4,300 million, increasing 18% versus the reported 9 months of '23 net profit. On a recurrent basis, net profit grew 22% from EUR 3.5 billion in '23 to EUR 4.3 billion in '24. In the annex, you have a slide also with the interim dividend calendar. Now, the Chairman will conclude the presentation. Thank you.

Thank you, Pepe. The result we have presented today reflect the positive signals of the last few quarters. In consolidating strong double-digit growth trend across the key financial indicators, including operating profit, net profit and cash flow. This has allowed us to expand our business, enhance profitability and perceivable finance strength while increasing our insurance shareholder remuneration by 14% to EUR 0.23 per share. As a result of this positive momentum, today, we are rising our net profit outlook for the full year to around EUR 5.5 billion with our capital gains from asset rotation, growing in line with the interim dividend just announced. In the last quarters, we have expected to continue benefiting from high net worth tariff, particularly in U.S. and U.K. and a higher asset base, thanks to accelerated investment in transmission and distribution as well as the contribution of 2,300 of new capacity -- megawatt new capacity, including 1,000 megawatts from our new offshore wind farm in France and Germany while we continue securing long-term revenue through PPAs. To conclude, I'd like to announce that we will host our new -- next Capital Market Day in autumn 2025. By that time, we will be able to provide you with updated growth targets once we have the full integration of Electricity North West, the initial determination of the new transmission framework from '26 to 2031 also in the U.K., and the “Avangrid” transaction completed. In addition, after summer, we will be able to report on further progress on the construction of our key projects in different countries. However, let me advance that we expect to follow our trend of the last 2 decades, with more investment, higher result and higher dividend, always preserving our strong financial position. In any case, in the coming quarters, we will continue updating you as usual. Now, thank you very much, and we can start now the Q&A session. Thank you.

Now in the Q&A session, the following financial professionals have asked their following questions. Alberto Gandolfi, Goldman Sachs; Arthur Sitbon, Morgan Stanley; Fernando Lafuente, Alantra; Fernando Garcia, Royal Bank of Canada; Philippe Ourpatian, ODDO; Pedro Alves, CaixaBank; Daniel Rodríguez, Bestinver; Peter Bisztyga, Bank of America; Manuel Palomo, BNP Paribas; Javier Garrido, JPMorgan; Victor Peiro, GVC Gaesco; Javier Suarez, Mediobanca; Jorge Guimarães, JB Capital; James Brand, Deutsche Bank; and finally, Jorge Alonso, Bernstein. The first question is related to the guidance 2024, drivers and concept included in this given guidance for the year 2024.

As explained, our guidance for the full year 2024 is now around EUR 5,500 million, excluding capital gains from our asset rotation. The basis of comparison of this result is net profit, EUR 4,803 million last year. So this growth, we are expecting is in line, as I mentioned, with our interim dividend of 14%, 15%. And that is driven by the positive business trend observed during the year, plus the new investment. I think we have already made EUR 9.6 billion as you saw in the first 9 months 2024. So in other words, new rate cases and higher rate basis in production and customers additional capacity. So I mentioned already a couple of offshore wind farm, which as you know they are contributing in a very important manner to our result and as well the pan hydro contribution as a recurrent business.

And the next question is related to the guidance 2025, given that in 2024, Iberdrola is growing at double digit, the audience is wondering how sustainable this double-digit growth is. Also what growth prospects does Iberdrola have for next year? And which businesses are going to drive this growth?

So well, we are still in this moment working in the budget. So I think we'll give details of the guidance in February. But when we will complete all this one is, let's say, you have very clear details for all those things. Nevertheless, I think we can say that now we are a year ahead of our estimate, our CMD in March. So our rate guidance for 2024 is higher than that one we fixed for 2025 in our CMD. And our expectation is that we will continue growing in 2025, clearly above this -- the numbers we provided in March, which was in the range of 5.3%, 5.4%, which is today we are announcing more for 2024. And I think that we are going to have more investment in Networks with higher tariffs. We will have more capacity fully in operation during the whole year, Saint-Brieuc, Baltic Eagle, in 12 months, higher prices that we expected in those ones we were planning, lower interest rates. And I think -- overall, I think we are, let's say, optimistic that the number is going to be substantially higher than those we are announcing for 2024.

Another question about targets, but in this case about the plan 2024, 2026 is still in place. The targets for this period were presented last March. However, since March, there have been several news and updates, ENW, energy prices, et cetera. And we have received some questions on how these targets may change in the future.

Well, as I mentioned, we are progressing 1 year ahead of our plan. So we are well ahead of our 2025 outlook. I think in 2024, we are reaching the numbers -- over the numbers for 2025. Also, we are increasing the dividend ahead of that was as planned. Also, we make -- all our asset rotation, which was planned for, is already done. And also, we have already closed relevant transaction. I think this summer was very busy. We made ENW. We made the offshore in U.K., United States. Many of those will be materialized after 2027, but I think there's already some good inputs. We will update all the numbers for the plan of -- after 2025 in autumn for 2026 and beyond. And once we have already, as I mentioned, completed ENW integration, and we will have more detail of RIIO-T3 total investment required in the period. But I was saying for 2025, we have positive feelings on the direction of the new targets. I think we are, let's say, optimistic about the numbers we will present to you in the next CMD.

Next is related to the guidance given about the net debt at the end of this year. There are some cash inflows in the last quarter of the year that will play an important role. But do you have in mind a range where the net debt may end at the end of 2024? Pepe?

Pepe, could you?

Yes. Well, as was mentioned, it will depend a lot when we finish -- when we complete the Avangrid transaction. If we have completed the Avangrid transaction together with the asset rotation, the debt will end up somewhere around EUR 51 billion, more or less, if you add the Avangrid and the asset rotation. The only thing is that we don't have a date for that. So this will depend a little bit on when this is approved. But assuming you know that we have approved the Avangrid transaction before the year-end, and we have the asset rotation, then the debt will end up somewhere around EUR 51 billion -- EUR 50 billion, EUR 51 billion, okay?

Next is related to the acquisition of ENW. Could you please update on -- update us on the calendar to close the transaction? Is there -- if there are any approval spending, how it will contribute to results in 2024 and from 2025 onwards? How will the company be consolidated?

So I think -- everything, I think, is progressing as expected. CMA has already published its standard limitation for these kind of deals. But I think this standard has already met some exception, they will know this exception, which has been already agreed, an important derogation on this standard limitation, including the appointment of 2 independent directors of the company, who we will nominate in the next few days. The only companies affected for this restriction are Scottish Power Networks. And in other words, we have no restriction to the rest of Iberdrola businesses. We are going to continue collaborating with CMA during this process. And we expect by the end of this quarter to have already all these clearances for that one. In our estimate, it's not considering in 2024, any contribution of ENW. In any case, I think in the period of time, it will be very, very small. I think the -- one of the reasons we would like for making already this CMD in autumn next year is precisely. Once we will have insight of the company, we can already make more detail about how much this can already contribute to the group because the numbers we have already -- as you can imagine, is already not as accurate as it will be when we will be inside. But I think we will keep you updated in a moment. We can already continue a bit more details of that one.

Next question is related to politics. What's your view on the potential outcome in the United States election? And how do you think it could affect Iberdrola's plans if the Republican party wins?

So we have a long-term record in the United States. We have -- for many years, we've been with different administration from both parties. I think we've been in times of President Obama, in times of President Trump, in times of President Biden. So I think we've been with both political parties. But I think you have to be aware that our main business in the United States is Networks. And networks is regulated by state. We have already rate cases already secured for 2025, 2026 in distribution and transmission, which is depending of those states. And already -- I think we are already working in some transmission investment for the second half of the decade and especially in New York for close to EUR 3 billion, which -- and EUR 1.5 billion in New England, so which is in the NECEC. In renewables, I think the assets are under construction, it's awarded. We have already secured for those ones, the ITCs and the PTCs and the current legislation. So I think it's not new for us, whatever the scenario can be produced. In any case, we will respect what the Americans will decide as always. So we will work with whatever administration, and we have already done for many years.

Next is related to Networks regulation concretely in Spain. And a few days ago, some news came out on the return on investment to be below that companies currently are demanding. Do you think the new regulatory framework in Spain will make the investment attractive?

Well, we are -- I think all the inputs in all the organization, from the international agency, from American administration, from the British administration that was last week already in investment summit of -- organized by the Prime Minister of Britain and European Union. Everybody is already just in transmit, and we are perceiving a strong appetite to -- for increasing the investment in this sector. So I think it's -- they are a huge appetite for the technology company as to sign contracts for a longer period of time with prices for worked prices above the actual one for securing the more amount of energy. And also, I think we are perceiving a well good appetite for repowering project. What we have already is a positive situation with a portfolio more than 5 gigawatts to be already repowered. So I think we are already receiving positive trends. And what we are seeing is big appetite, so -- everywhere. So I think the money will move whatever they will make already more clear, stable, predictable and attractive frameworks, which I think another day in the meeting in London with this investment summit, it was these words well repeated several times for all the participants; stability, predictability, rule of law. And that is what is making already the attractive business to move the investment from one side to another one, knowing the demand of more electricity in this moment worldwide is huge, especially for new demand like data centers.

Next is, again, related to Spain, and its press noise about the government's intention to extend and make permanent the 1.2% revenue tax. What is your opinion on the subject? And what would be the impact for Iberdrola? Have you included this tax in your projection for the years 2025 or 2026?