Regulatory changes hit Acciona profits

SPAIN: Poor performance from Acciona's energy division, which is dominated by wind, has led to the company reporting a dive in profits.

Acciona operates wind projects with a capacity of 6.1GW

The Spanish conglomerate's energy business reported a slump in pre-tax profits of 75% to EUR 27 million in the first nine months of the year.

Regulatory changes approved by the Spanish government as well as a global market slowdown were responsible for the poor performance, said the turbine manufacturer and wind farm developer.

But this fall in earnings was counter to a 2.3% increase in revenues from the division, due, the company said, to the 105MW of wind projects installed in the last 12 months.

This is explained by a shrinking of the business' profit margin, from 6.8% a year ago to 1.7%.

Significantly, revenues from generation climbed 9%, but EBITDA from generation fell 6%. The company said that February's change in the Spanish law accounts for this discrepancy.

Under the changes, feed-in-tariffs paid to renewable energy producers are no longer adjusted for inflation according to the retail price index but use a lower measure.

The company estimates that the changes, along with 2012's alterations to the tax regime for renewable energy projects, have lost the company EUR 137 million.

The energy business accounted for 78% of the group's EBITDA in the first nine months, down from 79% last year.