Iberdrola's Strategic Pivot: Networks, Caruna, and the Electrification Tailwind
Iberdrola reported a strong first half of 2026, with reported net profit up 22% to €4.34 billion and adjusted net profit up 8% to €3.57 billion, driven by a 7% increase in adjusted EBITDA to €8.05 billion. The company's strategic pivot toward regulated networks is unmistakable: investment rose 25% to over €7 billion, with 72% allocated to the U.K., U.S., and Brazil, and Networks now representing two-thirds of total investment.
A Concentrated Bet on Regulated Networks
The regulated asset base (RAB) grew 11% year-on-year to €55 billion, underpinned by double-digit growth in the U.K., U.S., and Brazil. “In the U.K., we have higher contribution from Electricity North West, consolidated since March 2025. Increasing contribution from transmission. Started RIIO-T3 in April. In the U.S., higher rates, contribution of NECEC interconnection between Canada and Massachusetts from January.” — Ignacio Galán, Chairman · 2026-07-22 This geographic diversification—83% of EBITDA now comes from A-rated countries—insulates the group from any single-market regulatory risk.
The data center AI boom is a key driver of incremental electricity demand. Galán noted, “We see in the U.S., we have huge demand. People knocking our door for extending life of the existing asset, of investing in new ones with long-term PPAs, even longer than before, with higher prices.” — Ignacio Galán, Chairman · 2026-07-22 This is a tailwind that reinforces the investment case for networks and renewables.
The Caruna Acquisition: A Calculated Move into the Nordics
Perhaps the most significant news was the announced acquisition of Caruna, Finland's largest electricity distribution company, for an enterprise value of €5 billion. This deal perfectly fits the strategy of swapping thermal generation for fully regulated assets. Galán explained, “We are changing money from one country to another one, in a country in power generation, fossil power generation, into clean Networks operations regulated.” — Ignacio Galán, Chairman · 2026-07-22 The transaction is expected to be accretive from day one and to add 7% per annum to net income, with a supportive regulatory framework offering an average ROE of around 8%.
This transaction follows the same rationale as the acquisition of other network companies, like ScottishPower Energy in U.S. or Elektro in Brazil. We are a long-term industrial investor. We are not really speculative investors. We see opportunities that probably another one has not seen.
AI as an Efficiency Multiplier
Iberdrola continues to deploy artificial intelligence across its operations, with over 300 projects in production or final development. Galán stated, “There are around 300 projects at this moment in production at the final development stage. We have another 150 projects progressing. We are training now thousands of people, probably more than 4,000. We expect that the value of all this initiative will be measured in the hundreds of millions.” — Ignacio Galán, Chairman · 2026-07-22 These efficiency gains, combined with the Earnings growth from new capacity and higher regulated tariffs, underpin the company's confidence.
Guidance and Outlook
The company comfortably reaffirmed its 2026 guidance of more than 8% adjusted net profit growth. With 100% of expected energy already sold and hydro reserves near record levels, Iberdrola is well-positioned for the second half. Galán hinted at potential upside: “If the positive trends of the second quarter continue in the coming months, we could give you some good news after summer.” — Ignacio Galán, Chairman · 2026-07-22 The regulatory approval process for new rate cases and the Caruna closing in Q1 2027 will be key catalysts.
In summary, Iberdrola's H1 2026 earnings paint a picture of a company accelerating its investment cycle, leveraging structural electrification trends, and executing a disciplined M&A strategy. The Caruna acquisition, coupled with robust organic growth and AI-driven efficiencies, positions the utility for sustained earnings growth in a rapidly electrifying world.