By Isla Binnie
MADRID (Reuters) - Europe's biggest utility Iberdrola (BME:IBE) posted a 36% rise in half-year net profit on Wednesday as strong results in the U.S., UK and Brazilian markets offset a fall at home in Spain.
European energy prices have soared as markets still reeling from the havoc COVID-19 played on supply and demand were hit with supply disruptions and uncertainty caused by Russia's invasion of Ukraine.
At Iberdrola's Spanish business, dry weather hampered hydroelectric generation and nuclear plants churned out less power than expected.
This forced the company to buy electricity at dizzyingly high wholesale prices to meet contracts with customers who had locked in much lower long-term tariffs.
A 195 million euro one-off charge linked to regulated asset value calculations also hit Iberdrola in Spain, contributing to a 26% year-on-year fall in profit there.
Some governments have moved to impose windfall taxes on energy companies they believe are benefiting from higher prices, and Spain has singled out electricity generators as being among those who should be asked to contribute more.
Iberdrola has been vocal among companies objecting to intervention, saying they fix prices far in advance of wholesale market rises and that changing regulations might put off longer-term investment in cleaner energy.
First-half profit came in at 2.07 billion euros, beating the 1.93 billion forecast in a company-provided poll.
The boost to international profits came in part from more renewable capacity and stronger wind generation, better tariffs and inflation in Brazil and regulatory changes in the United States, Madrid-based brokerage Renta 4 said in a note.
Iberdrola said it still expected full-year net profit to reach 4 billion-4.2 billion euros ($4.05-$4.25 billion).
Shares rose 1.4% in morning trade, keeping Iberdrola's market value a touch higher than both its level at the start of the year and that of large peers such as Italy's Enel (BIT:ENEI).
The broad regional industry index has shed almost 10% this year.
($1 = 0.9872 euros)