Acciona chairman upbeat on energy outlook as more dealmaking expected
By Pietro Lombardi
MADRID (Reuters) - Spanish construction conglomerate Acciona's energy unit should improve performance significantly in the coming months as electricity prices are picking up, its chairman said on Tuesday, adding that its renewable energy assets are attracting growing interest from potential buyers.
While the group reported consensus-beating results for the first half of the year thanks to its infrastructure operations and wind turbine making business Nordex, its energy subsidiary Acciona Energia was hit by low energy prices which prompted it to cut production.
Weak electricity demand, mild winter temperatures and abundant wind and hydroelectric production "resulted in some of the lowest pool prices in the Spanish power market history," Acciona Chairman Jose Manuel Entrecanales told analysts.
"Consistently with these low prices, we have had to significantly reduce production as it was often not economically viable," he said.
Looking ahead, "lower risk of excess energy in the market, normalized electricity prices, a reduction in curtailments," are expected to contribute to a significant improvement in the energy business.
Shares in the energy unit traded up 3.9% at 1037 GMT.
Selling renewable assets to strengthen its balance sheet is a key part of the Acciona's strategy. To this end, Acciona said it had agreed to sell a 175-megawatt hydroelectric portfolio to Spanish renewable company Elawan for 287 million euros ($310.56 million)
And more is in store.
"We have observed increasing market interest to the extent that we have received formal offers, many unsolicited, for approximately six gigawatts of our asset base," Entrecanales said, adding that the company "will prioritise those deals where we see the best value and strategic fit."
For the six months to the end of June, Acciona reported a 75% decline in net profit to 116 million euros. The sharp decline reflected exceptional gains a year earlier, but the profit was more than double LSEG analyst forecasts of 46 million euros.
In the same period last year, results included exceptional gains as the company fully consolidated German wind turbine manufacturer Nordex and another renewable business.
($1 = 0.9241 euros)
(Reporting by Pietro Lombardi, Corina Pons and Sarah Young, Editing by Louise Heavens and Susan Fenton)