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 first quarter results presentations. 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 Galán, Executive Chairman; Mr. Armando Martínez, CEO; and finally, Mr. Pepe Sáinz, 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 webpage, www.iberdrola.com. Finally, we expect that the today's event to last no more than 50 minutes.
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 Galán. Thank you very much again. Please, Mr. Galán.
Thank you, Ignacio. Good morning, everyone, and thank you very much for joining today's conference call. In the first three months of 2024, our strong operating performance has led to a reported profit of EUR 2,760 million, with recurrent net profit up 20% compared to the first quarter of 2023. As you can see, reported result in first quarter are affected by extraordinary items, both in 2024 and 2023. In 2024, we have included the capital gain from the five thousand four hundred and thirty-seven million euro transaction with Mexico Infrastructure Partners, which has completed in the last days of February, with a positive impact of EUR 1.7 billion at the EBITDA and EUR 1.2 billion at net profit level.
In the first quarter 2023, we registered the non-recurrent recovery of previous year retail deficit in the U.K., with a positive impact of EUR 311 million on EBITDA and EUR 238 million at net profit. Reported EBITDA reached EUR 5,157 million, with a 10% increase in recurrent terms, driven by the higher contribution of our businesses. Networks, mainly due to the new rate cases in the U.S., the U.K., and Brazil, and then production and customers, which registered better performance thanks to the record renewable production in Iberia and the highest of the last decade, and the new capacity, mostly offshore wind. We also record investment of EUR 2.4 billion in just three months, a 30% increase versus previous year.
Network investment grew by 27% to EUR 1 billion, driven by new rate cases in the US, UK, and Brazil, with an increase of 85% in transmission, which already represent 40% of the total investment in this business. In renewables, investment are up 50% to almost EUR 1 billion, driven by offshore wind, which represent close to 40% of the total after a 70% increase year-on-year. We have been able to combine this record level of investment with a further increase in financial strength, thanks to a 40% increase in recurring cash flow, reaching EUR 3,145 million, and EUR 5,437 million proceeds from, as I mentioned, from Mexico transaction collected during this quarter. All in all, FFO to adjusted net debt is already above 25%, as the official,
As Pepe will mention later on. As you can see, we are delivering on our 2024- 2025 plans ahead of schedule in terms of results, investment, cash flow generation, and financial strength. As mentioned, recurring net profit is up 20% year-on-year. Once we include the positive impact of the Mexico transaction, reported net profit reached EUR 2.7 billion in the last quarter. This was possible thanks to a very strong operating performance across our business and geographies, leading to a 10% increase in recurring EBITDA. The network business has benefited from new tariffs in the U.S., U.K., and Brazil, and an increase in regulated asset base, both in distribution and transmission, partially offset by temporary IFRS adjustment. Energy production and customers increased its contribution as well, thanks to 10 years' record renewable production in Iberia, with higher production from manageable technologies.
An additional offshore wind capacity from Saint-Brieuc in France, with the all turbines already installed and being gradually commissioned in a process that will be completed in the next three months. And the first turbine from Vineyard Wind 1 in the United States already exporting energy as well. Finally, retail performance is better than expected, thanks to our manageable renewable generation in an environment lower prices. A significant part of our growth was driven by new investment. In the first three months of 2024, we have reached a new record of EUR 2.4 billion, up 36% from previous year, with more than 90% allocated to networks and renewables. As anticipated, we presented our planned networks business. It's already our first investment destination after a 27% increase, reaching EUR 1.2 billion in the period.
40% of this, of network investment were allocated to transmission, with an increase of 85% from 2023, and 60% to distribution, with 6% increase, driven by new tariff frameworks in most of our key geographies. By countries, 40% of total networks investment were directed to United States, mainly New York, due to the increase in transmission and distribution investment included in the new rate case, as well as in Maine, both in distribution of our interconnection line with Canada. Brazil represent 29% of the total investment, UK, 21, and remaining 10% was invested in Spain. Where we continue to have a limit on a lower investment related to GDP growth, that we understand is not compatible with the urgent need of new connections, and therefore, we expect it will be removed by the government soon.
Driven additional economic growth with a very limited impact on tariff. As a result of this investment, our asset base reached EUR 43 billion, up 9% year-over-year. In renewables, investment reached EUR 944 million in the first quarter, 50% up from 2023, driven by increases of 70% in offshore wind, which contributed 40% of the total investment. In investment in onshore technology was also up by 43%, and storage investment rose by 70%. By geographies, 36% was allocated to United States, mainly driven by offshore wind, as we keep progressing in the construction of Vineyard Wind 1 in Massachusetts. 34% of the total investment correspond to solar PV, storage, and onshore wind in Spain, followed by 22% allocated to Australia, offshore wind in France and Germany, and onshore in Portugal and Italy.
Finally, 18% of renewable investment were directed to U.K., mostly to East Anglia Three offshore wind farm construction. These first quarters results reflect a very strong renewable performance in the Iberian Peninsula, with an increase in production by 90% to reach a ten-year record of 10,600 GWh. Currently, pricing environment allow us to maximize pumped storage, driven 18% increase in energy stored, up to 2,240 GWh in this quarter. As a result, as of today, our reserves are in record levels of 9,500 GWh. The build-up of new offshore wind capacity is also progressing on schedule, with 1.6 GW already contributing to results, including the first MW of two of the three offshore wind farms that we are already under construction.
Saint-Brieuc in France, 60% of its 500 MW are already producing, and the remaining 200, we are expected in the next three months. In Vineyard Wind, in the coast of Massachusetts, 130 MW are already exporting energy, and the remaining 370 MW are progressing construction. On top of this, Baltic Eagle in Germany has its first turbines already installed, and its 475 MW will be fully operational also before the year end. This means that in 2024, we will install 1,100 MW more, than doubling our offshore wind capacity in just one year.
Additionally, we have under construction the offshore wind farms of Windanker, also in German Baltic Sea, with 350 MW, and East Anglia Three in U.K. with 1,400 MW of capacity. Both on track to be in full operation by 2026, and with secure route to market. In the last month, we have also continued to secure additional opportunities in this technology for the coming years, like the 375 MW Happo-Nos hiro project, recently awarded in Japan, in a consortium with which Iberdrola holds 13% stake. We are currently working with our partners in the supply chains and the route to market for this project, with an expected final investment decision no later than 2026.
We also have two projects participating in the Round Six auction in United Kingdom, East Anglia Two and East Anglia One North, with a combined capacity of 1.8 GW. In the United States, we recently presented bids for the New England multi-state auction with two project, New England One and New England Two, totaling almost 1,100 MW. We expect the result of this auction before the year end. Lastly, we continue securing seabed rights for additional project for 2030 and beyond, such as ScotWind in U.K., where we have 2 GW+ a joint venture with Shell for the development of another 5 GW of floating offshore wind. Or Kitty Hawk, with 3.5 GW in the coast of Virginia and North Carolina, United States.
As you know, in Australia also, we are expecting a positive result of the auction for seabed right in Victoria, where we presented our 3-gigawatt Gisborne project. In the last few months, operating cash flow reached EUR 3,145 million, a 14% increase in recurrent terms. We continue delivering on our asset rotation and partnership plan. As mentioned, we collected EUR 5,437 million from Mexico transaction, and we expect to continue announcing soon additional progress in our co-investment agreement with the Tier 1 partners. All this is driving an ongoing increase in our FFO over net debt ratio, which in March improved by 180 basis points to reach 25%. We'll now hand over to CFO, Pepe Sainz, who will present the group financial standing for the detail.
Thank you very much, Chairman. Good morning to everybody. In the first quarter of 2024, EBITDA reached EUR 5,857 million, versus EUR 4,065 million in Q1 of last year, and net profit, EUR 2,760 million, versus EUR 1,485 million last year. FX evolution has had a minor effect on results. The pound rose against the euro by an average of 3%, the real, 4%, while the dollar depreciated 1.1%. There are two one-offs impact affecting the evolution, both in the energy production and customer business. As the chairman has explained, Q1 2024 has been positively impacted by the sale of Mexico assets, cashed in on February 26.
The EUR 1.7 billion gross capital gain has been registered at the net operating expenses level, with a EUR 1.1 billion post-tax impact. In Q1 2023, was positively affected by a EUR 311 million retail tariff deficit recovery from 2022 in the U.K., accounted as higher revenues, negatively affecting the evolution this year. At net profit, the impact is EUR 238 million. Excluding the Mexico EUR 1.7 billion capital gain, EBITDA was up 2% to EUR 4.14 billion, and net profit grew 7% to EUR 1.6 billion. Excluding also the EUR 311 million of U.K. tariff deficit recovery in Q1 2023, EBITDA was up 10%, and net profit grew 28%, as the chairman has presented.
A 33% improvement in procurement costs versus an 18% decrease in revenues has driven a 2% increase in gross margin to EUR 6.8 billion. Excluding the EUR 311 million U.K. retail tariff deficit recovery in Q1 2023, gross margin grew 7%. As I mentioned at the beginning of my part of the presentation, the EUR 1.7 billion Mexico capital gain positively impacted re-reported net operating expenses, making them to be EUR 78.5 million positive, as you can see in the slide. Excluding this Mexico capital gain, net operating expenses increased 12%, and 8.1% excluding not only Mexico capital gain, but also mainly the reconciliation impacts in the U.S. due to storm costs that are recognized at the gross margin level also.
Analyzing the results of the different businesses, and starting by the networks business, its EBITDA grew 2% to EUR 1,692 million, driven by a higher regulated asset base and tariffs. In Spain, EBITDA fell 6.8% to EUR 404 million, negatively impacted by a EUR 27 million positive regularization of investments recognized in Q1 2023, and higher net operating expenses on this quarter. In the U.K., EBITDA increased 35.8% to GBP 305 million, with higher contribution in transmission, thanks to higher tariffs and higher asset base, and in distribution, thanks to the new framework, ED2.
In Brazil, EBITDA decreased 0.5% to BRL 3,272 million, with higher tariffs and demand, partially offset by lower inflation and lower contribution of transmission due to the consolidation of the assets as part of the GIC agreement signed in Q3 of 2023. In the U.S., U.S. GAAP EBITDA increased 8.1% to $578 million, showing the contribution of the new rate cases, mainly in New York. IFRS EBITDA was down to $346 million, due to a $90 million negative timing effect due to IFRS accounting of higher commodity costs that will recover through 2024, despite higher contribution from the rate cases, especially in New York, as I has commented.
Q1 2024 energy production and customer business EBITDA reached EUR 4.1 billion, compared to EUR 2.4 billion last year, boosted by the already mentioned Mexico capital gain, partially compensated by a higher comparison base due to the EUR 311 million U.K. tariff deficit recovery last year. As you can see in the slide, Q1 2024 has had a better recurring operating performance than last year, 1% excluding the Mexico capital gain, and 16% excluding also the impact of the U.K. tariff deficit. In Spain, EBITDA was one thousand two hundred and twenty-two million euros, 2.7% up, driven by higher output, along with lower procurement costs and lower levies. Those positives more than compensate lower prices and a positive effect in gas management in Q1 of last year.
In the U.K., EBITDA fell 11.3% to GBP 514 million, affected by the above mentioned Q1 2023 positive one-off. Nevertheless, the recurrent evolution of the business, with higher contribution in wind onshore and offshore, thanks to better prices and volumes, mostly absorbs the one-off. In Brazil, EBITDA increased 3.2% to BRL 425 million, as the global consolidation of 261 MW hydro assets following the swap with Eletrobras last year, more than offsets the lower wind output. In the U.S., EBITDA increased 27% to $211 million, thanks to the positive performance of our flexible generation fleet that improved results despite a 9% lower wind production.
In the rest of the world, EBITDA grew almost 40% to EUR 282 million, with a 29% higher production due to the gradual entry into operation of Saint-Brieuc offshore wind farm and more onshore capacity installed. Finally, in Mexico, EBITDA reached $2,037 million. Excluding the capital gain, EBITDA reached $176 million, affected by the deconsolidation of the assets sold from February 26th. Nevertheless, let me point out that the business from the retained assets evolved positively with better prices and volumes, up 30% to $97 million. EBITDA grew to EUR 4.5 billion, compared to EUR 2.7 billion reported in Q1 2023. D&A grew 2%, driven by a higher asset base, partially compensated by 14% lower bad debt provisions, mainly in Spain.
As you can see in the slide, EBIT, excluding Mexico capital gain, grew 2% and 15%, excluding also U.K. tariff deficit recovery in Q1 2023. Net financial expenses were up only EUR 14 million to EUR 524 million. Debt-related costs grew EUR 18 million. EUR 23 million increase is due to the EUR 2 billion higher average net debt in the quarter, as the EUR 5.4 billion cash proceeds from Mexican transaction were received at the end of February. This was partially compensated by EUR 13 million reduction due to the lower cost of debt, 10 basis points, falling from 5.08% to 4.98%, and EUR 8 million of negative FX impact. There is a EUR 4 million increase in not debt-related results.
Our reported credit metrics improved versus the end of 2023, mainly thanks to a 2.9 billion decrease in our adjusted net debt to EUR 44.9 billion, compared to December 2023 debt of EUR 47.8 billion. Mexico cash proceeds have been partially offset by a record CapEx quarter, as the chairman has commented, dividend payments, plus an FX impacts. As a consequence, FFO adjusted net debt rose to 225%, improving the 23.2% at the end of 2023. Our adjusted net debt to EBITDA improved to 3.10 times versus 3.32 times at December of last year, and adjusted leverage ratio was 41.8% versus 44.2% at year-end.
Net profit grew 85% to EUR 2,759.7 million, and 7% to 1,004 to EUR 1,595 million, excluding the EUR 1,165 million net Mexico capital gain. Excluding also the EUR 232 million net tariff deficit recovery in the U.K. in Q1 2023, recurrent net profit grew 20%. Now, the chairman will conclude the presentation. Thank you very much.
Thank you. Thank you, Pepe. To conclude, we have started 2024 with a record first quarter in the history of the company. I think it's important to mention that one, either in recurrent terms, either in reported terms, either in as well, a record operating performance and investment. This, together with the confirmation of our prospects for the rest of the year, allow us to improve our 2024 net profit guidance to high single-digit growth, excluding any capital gains from asset rotation. We continue delivering on targets presented in our strategic plan, with a record investment of EUR 2.4 billion in the first quarter, and on the way to reach EUR 12 billion in the full year.
Also, with a very strong operating result and cash flow, and with additional installed capacity, mainly offshore wind, driven by Saint-Brieuc in France, Vineyard Wind in the States, and Baltic Eagle in Germany, they will become fully operational by year-end. Also, we have 100% of our expected production for 2024 already sold, and higher reserve for manageable renewables, record as well. The increasing result of and cash flow from all these activities will drive even stronger financial ratios. This set of results show very clearly the benefit of our model, based in our four key, key pillars: vision, anticipation, delivering, and flexibility, driving predictable growth and value for all our stakeholders. So just to conclude, as you know, we have our annual general meeting in Bilbao on 17 May, with a wide range of options for virtual participation.
Let me invite all of you to join us in this event. You have in our website all the information regarding the agenda, as well as our proposal on dividend and the rest of the items. Also, in the annex of this presentation, you will find all the details of the shareholder remuneration program, and its key dates. Thank you very much, and now we are more than happy to answer all your questions. Thank you.
The following financial professionals have asked the question that I will now put to the senior managers present on this event: Alberto Gandolfi, Goldman Sachs; Fernando Garcia, Royal Bank of Canada; Rob Pulleyen, Morgan Stanley; Jorge Alonso, Bernstein; Gonzalo Sanchez-Bordona, UBS; Manuel Palomo, Exane BNP; Pedro Alves, CaixaBank; Peter Bisztyga, Bank of America; Jose Javier Ruiz, Barclays; Javier Garrido, JP Morgan; Michael Charlton, Santander; Jorge Guimaraes, JB Capital Markets; Javier Suarez, Mediobanca; and finally, Markita Cohen from Berenberg. The first question is related to the guidance 2024. Can you please confirm the basis for the new high single-digit growth? Can you confirm the baseline use and whether Mexico capital gains is included?
So, the first thing I would like to clarify that our 2024 guidance is based on 2023 reported net profit, not on recurrent net profit. Basis for 2024 guidance, so is in 2023, reported net profit of EUR 4,103 million. So it excludes any capital gain from asset rotation and partnership. Does not consider Mexico transaction capital gain of any another resulting from an alliance of asset rotation. So what that include?
Growth drivers: new investment of EUR 12 billion, as I mentioned, in networks with new rate cases in Brazil and United States; new transmission investment; U.K. additional revenues for investment under RIIO-ED2 and T2; and in production and customer, the strong renewable production in Iberia; additional capacity that I strongly mention of offshore wind; 100% of all energy sold at prices secured; higher reserve for manageable resources, reserve, let's say, reserves. The consequence is what I mentioned, is increase the outlook from 5%-7% growth in net profit to high single-digit growth.
Second one, regarding Mexico capital gain, what is going to be the final use of Mexico capital gains?
As traditionally with us, we will use it to maximize future growth.
Next is, regarding again to guidance 2024. Given the good, Q1 2024 results, can we expect further additional guidance hikes throughout the year as occurred in 2023?
So I insist on that. Given the first quarter result, we have increased our guidance, to give you the most updated information, as always with us. Of course, if there are any other trends along the year that make us update it again, we will do it, but at this point, we are comfortable with this high single-digit guidance I'm giving to you.
Next is Regarding the 1.2% revenues tax in Spain. When should we expect news about the CapEx deduction mechanism in Spain revenue tax?
No, no recent news, but we expect investment in the energy transition will be become deductible, as announced by the government. Nevertheless, you have to know that we have this tax. We are already is deductible in our profit because we have already our fiscal residence in the Basque Country.
Next is related to the net debt, guidance for 2024. When should we expect net debt for 2024 to be?
Pepe?
Yeah. As I mentioned, the last time, we are thinking about EUR 47 billion net debt, excluding, you know, the minorities purchase. If in the end, the minorities of Avangrid is purchased before the year end, obviously we'll have to add that amount to the EUR 47 billion.
Next is related to the net debt, but in Q1. Could you comment on the Q1 net debt evolution?
Yes, Pepe.
Yeah, in the first quarter, as we mentioned, we have had the cash, the EUR 5.4 billion of the Mexico divestment. We have had a record investment quarter, as the chairman has explained. In addition to that, on treasury returns, we've paid a little bit more, so we've ended up with a CapEx of over EUR 3 billion. We have also had the impact of the dividend payment in this quarter, that it was around EUR 1.4 billion. In addition to that, we have had another EUR 300 million of FX negative evolution, and a little bit of working capital and other. Now, typically, in this first quarter, is the quarter in which we have more of the bills to collect. Okay?
So in that sense, normally there is a slightly negative impact on the working capital in this first quarter, that it is absorbed during the rest of the year. That is what has driven us this 47.8-44.9.
Yeah.
But as I was mentioning, we are maintaining the EUR 47 billion guidance that I gave you, you know, in the previous results presentation.
Next is related to the Avangrid results. What do you expect for U.S. grids, EBITDA, at EBITDA level in 2024? Will the recovery and return on equity be reflected in 2024 or gradually throughout 2026? Is it a cost issue or revenue recognition?
Pepe?
Well, as we are expecting, you know, a strong performance in the EBITDA in grids. Basically, as we were saying, driven by the New York rate case. So I think that this year we are expecting this strong performance. As I mentioned in this presentation, there is a negative almost EUR 100 million impact coming from IFRS accounting due to commodity purchases that will reverse through the year. So basically, we are still looking for a very, very strong performance of our U.S. business, mainly due to networks in 2024.
Next is regarding the CCGTs in Spain situation. You apparently recently announced the closure of all CCGTs plans before 2030. What will be the backup technology for renewables in the future?
So, we are not planning to close our combined cycles, I think the first point. And this, because I think in the short term, they provide firm capacity, which is key for the reliability and security of the system. I think even it's going to be more relevant in the current scenario, nuclear closure. We need already the fact is that we need already mechanisms for the economic viability. I think the system operator is now signaling the problem, so I think it's not only about money, and the commission is mentioned that one.
The electricity market reform, which has been recently approved by the European Commission, consider this capacity mechanism, and the Spanish government is as well initiating the process to carry out this system, which I think is going to be already in the next few months. The fact that we are not closing this combined cycle is absolutely compatible with our targets, given the lower emission linked to lower production. I think we are going to produce much. I think they will secure, but they will not produce large number of hours. And I think in the emission they will make, we love the emission with another mechanism.
Next is regarding networks in Spain and the regulatory situation. Can you provide an update on the discussion with the CNMC regarding the update of the allowed WACC expected for 2026? What are your suggestions for the regulator?
Uh, Armando?
Good morning. Yes, I think there is now an open consultation from the CNMC. We always said that we need a huge amount of investment in networks, as we explained in the capital markets day. We expect that the rate of return will be something similar as we are seeing in other countries where energy transition is taking very seriously the development of networks. In Spain, the need of networks is very, very high. There is a huge opportunity for data centers, and we are very confident that the government will move through this direction and will put networks development as one of the main priorities of the energy transition.
Regarding energy hedge in Spain and U.K., could you please update on hedge volumes for 2025 and 2026?
Armando?
Yes, as the chairman has said, 100% of the energy this year is already sold. From the period 2025-2026 in Spain, 75% is already closed, and a wholesale price in line with the plan that we presented, and the final price for customers will be something around EUR 95-EUR 105, something around that. In the U.K., during the period 2025-2026, we have secured 65%. It's in line with the market references.
Question 11, demand growth: How much do you expect power demand to grow across your main regions, Spain, U.S., U.K., over the coming five years? And what will be the drivers, sorry?
So I think I mentioned already in CFD, clearly, that electrification is unstoppable. So I think it's the electrification in the current advanced economies is already growing between 1.5% and 2%, and the developing countries is growing more than 3% per annum. So share of electricity is still, you have to be aware, is represent only 20%-25% of the total energy consumption worldwide. And I think that the expectation in this share grows by 20 to 30-35% by 2030, according with the data of International Energy Agency. And I think from 2030, the expectation is it will be booming because of the more electrification in many, many uses.
Which are the main drivers? I think, transport, is already according with the information, published today, is expected to multiply by 4 by 2030 and by 19 by 2050, electrical transport. In buildings, cooling and heating is more than 50% will be already, electricity, by 2040. And in industry, the expectation is to increase by 60%, by 2040 and continue growing up to 2050. What are another factors of this increasing demand? I think digitalization, artificial intelligence and data centers are key drivers, which are doubling the demand already now by 2026. There are countries like United States, where today the demand of, for data center is in the range of 6%-8%, and the expectation is to double in the next two, three years.
So, I think there are certain users today than heating, with today are below 200 degrees Celsius, which is going to be massively used in electrification instead of boilers. So, I think it's, I insist, data centers, transport, and industry sectors like food, beverages, tobacco, paper, chemical sectors. So I think only these three sectors, I think food, beverage, industry, chemical sectors, are consuming in Spain 70 TWh, which is roughly close to 30% of the total Spanish demand. So I think a big episode that one will change drastically the electrification of the country.
Next is related to the power prices in Spain. We have seen that wholesale electricity prices in Spain have been frequently at zero megawatt-hours during the month of April. Which impact do you expect from this phenomenon? What are the short-term solutions to solve it?
Armando?
So, at lower prices, due to renewable penetration, I think we were anticipated in the capital markets today. In our models when we presented, that was very clear that there will be something like that. We maintain our price estimation based on these, hourly periods of low prices. Negative prices responds to a very specific situation. We can see that very lowest demand period in the year, heavy rainfall since October, that is, increased the reserves, in a level of 85% in our case. And also, we have a high wind production in during the year, and also the increase in PV penetration. So this is something like we expected, that with all these phenomenon is disappearing, prices will go to normal.
In any case, we must add that thanks to our hydro pumped storage, we are able to capture a huge value of the price volatility from the market.
The next is related to the Avangrid minorities deal. Have Iberdrola and the unaffiliated committee began discussion on the terms of the deal? Or are you just awaiting for their response or after assessing the offered terms? Also, do you expect the unaffiliated committee to consult with shareholders before making its recommendations?
I think the board has delegated to the Avangrid special board committee to already do whatever necessary to analyze and to nominate advisors, to talk whatever they will consider. After it, the special committee, the negotiation will follow with Exelon, depending as well on the special committee. If eventually we approve, we agree, and the merger agreement signed, it will start regulatory approval process. So I think is... We will keep you informed in the next few months.
But I think we are making all the process in a very, very transparent manner, with a special Avangrid independent board committee is doing whatever necessary to give already the proper analysis and to negotiate with Iberdrola the terms after their analysis is made for themselves and for the advisors they will nominate.
Next, on M&A. Is the company actively scouting for some opportunities to reinvest the cash in from the sale of Mexico? In which sector and geographies is the company's intention to grow? Any update on the pending asset rotations?
I think when we make already our proposal of asset rotation and partnership in 2022, I think is somewhere ecstatic. So I think now all our 2025 plan is fully completed, either in asset rotation, either in partnership targets. But we have many additional opportunities in advanced stage, but we would like to be selective. I think our focus now is on partnerships, partnerships with make already evaluation, with give us the opportunity of building more projects. With through this partnership, we can share risk in the construction phases, in cases.
I think something which is very important, our commitment with the decarbonization is 100%, and I think that can help to accelerate the decarbonization with our own resources, with the resources of our partners.
Next is on the current fashion topic of data centers. Press argued that you may consider entering into the data center business. Which could be the rationale behind such move, and what synergies could you extract from this activity?
So, we are in this one. We are already, this moment, a contract signed for supply electricity for more than 7 TWh to our to customers in Europe and United States. But I think for us, it's a very interesting angle to catalyze this new electricity demand. And I think we would like to contribute already using our capabilities to make the then this data center can be developed and can be put in operation. So, what we are making is analyzing how to maximize not only this potential growth demand, electricity growth demand, but as well to maximize the value we can really provide and using our capabilities. So saying that, I think is not new. We are already in this segment.
We are in talks with many people, and we will try to help as much as we can, all those companies which are developing these data centers to be beside for providing all with our capabilities in electricity, in power, and whatever things we can already give to them to make already to accelerate the process for these data centers in the countries we have already present.
Last question received is about supply market in Spain. Can you give color on supply market in Spain? Higher competition as prices are lower. What do you expect going forward?
So I think the main things we are observing is that there are already a move from customers, from the liberalized market into regulated one. In the same direction, in the opposite direction, they were moving already the previous year. So I think they are more moving from regulated tariff. They were moving from regulated tariff to liberalized because the conditions were more attractive. Now, they are moving to the regulated one. And but I think in any case, we are keeping and maintaining our strong position. Based in what? We have very competitive energy cost. I think I mentioned very many times, we are not selling. We are selling depending what is our cost, not what is the market condition.
That's why we have most of our contracts are long-term hedging policies. We are selling most of electricity is already sold a long time. I think it's 100% this year, electricity production is sold. Next year's is probably 80%-90% already sold. And why we can make that one? Because we have the production, which is not dependent of the variable cost of the fossil fuels, and because we have already, as Armando was mentioning, storage capacity, that we can benefit already in the moments where the market prices, both market prices are very low, we can already store electricity. We beat our record of storing electricity in a quarter, more than 2.5 TWh.
And we have already offering to the customers not only a tariff, but a range of products, including smart solutions and another thing. So that's why I think as a whole, our total customer base in Spain has far less volatility than other competitors. There has not such a competitive advantage as we have already, as we can offer. So that's why we are already quite satisfied how the things are performing.
Okay, without further questions, please allow me to give the floor to Mr. Galán to conclude this event.
So thank you very much, taking part of this conference call. I remind you again that the seventeenth of May, we will hold the AGM, which will be already attended through different digital channel, but as well, we have already present in Bilbao. You are welcome, you would like to be there. So in any case, related to this quarter result, our Investor Relation team will be, as always, available for any additional information you may require. Thank you very much, and you are invited to be with us on the seventeenth of May. Thank you.