JOSE 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 twenty twenty first quarter results presentation. Secondly, we hope that you, your family, friends and colleagues are all safe and well during this global pandemic. Now on to the reason why we are all here, our Q1 results presentation, which will follow our normal format. Firstly, we will begin with an overview of the results and the main developments during the period given by the senior executive team that we usually have with us: our Chairman and CEO, Mr.
Ignacio Galan Mr. Francisco Martinez Corcoles Business CEO and finally, the CFO, Mr. Jose Sein. Following this, we will move on to the Q and 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. Additionally, we expect that the today's event will not last more than sixty minutes. As I'm sure you can appreciate, the logistics for this call are more complex than normal. So we hope that everything runs smoothly, but please bear with us if there are any technical issues that arise during the call. 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 our Chairman and CEO, Mr.
Ignacio Galan. Thank you very much again, please, Mr. Galan.
Good morning, everyone, and thank you very much for joining today's conference call. Let me start by hoping you and your families are well and by wishing the quickest recovery for those who have been affected. We are living unprecedented times. The crisis created by COVID nineteen virus and the measure required to contain the expansion are testing the capability of response of all of us, individuals, companies, institutions, and governments. And thanks to the professionalism, sense of duty, and effort of the 40,000 women and men at Iberdrola, I can say this group is doing its part to contribute.
Since the outbreak of these crisis, we put in place a comprehensive set of measures aimed at preserving the safety of our employees, contractor and customers, securing supply for the population and the industries in all countries and protecting the thousands of jobs that depend of our activity. For our employees, we are implementing all actions required to maintain the distance of security in regular activities and to limit personal interaction. Our investment in digitalization of processes and platforms have allowed the group to have as today over 95% of the office employees working remotely. For those areas where working from home is not possible, we have taken all precautionary measures to minimize contention such as working in shift or the separation of teams, always in close collaboration with authorities. In critical infrastructures as a control centers, we have put in place backup facilities and we have ensured that the substitute teams can operate these facilities if required.
We are also monitoring critical health facilities such as hospital or nursing homes to ensure continuity of power supply. Thanks to all these measures, we have been able to limit as much as possible the impact of COVID in our employees and contractors, providing all required assistance and support to those where we have been affected by disease and taking the proper surveillance and installation measures to monitor those with symptoms. As today, we have sixty five cases confirmed out of twenty six has have already recovered and around five hundred employees are under percussion or installation, a figure that has been decreasing over the last week. Suddenly, the first disease of any virtual employee was confirmed yesterday. Our thoughts are with his family.
I am sure you have already heard me talking about our belief in a social market economy. And today, we are delivering on that statement. We are easing payment conditions for our customers, offering new digital tools, reinforcing our contract centers and implementing new measures directed to vulnerable group such as elderly customers, including a free of charge service in foreign home electric repairs. In parallel, we are working closely with regulators to ensure we are in full compliance with their guidance especially with vulnerable customers and to obtain access to financial and other support measures as they are putting in place. Action with our supply chains are especially critical, given the employment we create with contractors, especially with the massive investment effort we are carrying out.
Thanks to the close collaboration between our own teams, on-site contractors and government authorities, we have managed to continue construction activities despite some small interruption that have already been solved in most cases, mainly due to regulation in Spain and Scotland. As a result, despite the current environment, we have increased investment by 24% in year on year basis, reaching €1,700,000,000 and we do not expect any significant impact on commercial operation date of our projects. In addition, we are doing our best to mitigate the impact of the crisis on our suppliers. In the last week, we have signed multiyear purchase contracts worth €3,800,000,000 providing them the visibility they're required to maximize access to financing and most importantly, to avoid any negative impact on employment. Moving to the expected effect of COVID-nineteen on our business activities.
The structural resilience of our model, our missile geographies and regulatory framework constitute a very relevant mitigation factors. In Networks, the impact demand of decrease will be offset thanks to the revenue decoupling mechanism in place in most of our distribution companies. In addition, as a regulated activity, governments and regulatory authorities are announcing different measures to compensate impact of higher receivables or bad debt on the balance sheet of net worth companies. Looking now into each of our main geographies in more in detail in Spain, we the new methodology for distribution approved last year up to 2026 includes this revenue decoupling. As a result, impact will be limited to the timing effect.
Additionally, the Spanish government has approved measures to mitigate other effect, including credit lines to cover any loss of system revenues resulting from the temporary suspension or modification of supply contracts. In United States, all our grid distribution companies have different mechanism to reduce the volatility result delivered from change in demand. As mentioned in our last result presentation, Central Marine Power has reached a rate agreement for 2020 effective since March. In New York, significant progress has also been made. An agreement in principle will reach in February with the staff of the Public Service Commission.
This agreement is now being adapted due to COVID-nineteen and we anticipate new tariffs to be effective in September. However, we expect that the overall terms of the agreement will remain and also in the impact of the delay from April to September will be recovered. In The UK, as you know, current framework for transmission and distribution, RIIO T1 and RIIO T1, already include demand adjustment mechanism. OGM has also established mechanisms until the June to give networks companies the flexibility to postpone certain lower priority works and services. This will be very valuable to avoid penalties linking to delivery of outputs.
Finally, in Brazil, Neoenergia subsidiaries in the Northeast have recently gone through annual tariff adjustment. New rates have been postponed from April to July with compensation mechanisms in place to recover net loss revenue before year end. In addition, the government has announced that BRL 2,000,000,000 will be allocated to provide liquidity to distribution companies, protected financial stability and avoiding contagion to the rest of the sector. Looking now into our liberalized and renewable business, demand has affected over the month of March, firstly in Spain and then in UK, which falls between 1015%. Overall, demand has decreased by 3% in the first quarter in Spain in the first quarter.
Price had followed a similar evolution. However, our integrated business model provide us a significant protection against these market trends, thanks our short position in generation, our hedging strategy with 100% of 2020 hedged and 75% of 2021 volumes already sold. And our flexible portfolio, thanks to storage capacity, will give us the opportunity to pump water when prices are lower. In fact, due to this and to the increased rainfall, have eight terawatt hours hydro reserves, 50% above last year in this moment. In retail, over the last weeks, we have registered an increase in receivables mainly as result of the flexible payment plans we have offered to our customers and the restriction of movement of people implemented in Spain and UK.
We expect bad debt to remain under control thanks to our very high share of customers paying through bank account in Spain and direct debit in UK. In addition, in this country has published again a preparing measure to compensate for increases in bad debt. In addition to this mitigation message implemented in lower our businesses, the conservative financial policy we have been applying for two decades is also bearing fruit in this moment. As of today, our liquidity position reached €14,400,000,000 enough to cover thirty months of financial need under normal scenario or twenty one months under stress x scenario. And we continue having access to financial competitive terms.
We already issued €750,000,000 green bond in April, becoming the first Spanish euro to compete of transactions in this crisis. Demand of this instance exceed €9,000,000,000. United States last month as well, Avangrit completed its third green bond of 10,750 million dollars with maturity of five years. Finally, the crisis has driven significant movement in the currency markets. In this respect, aside from the structural protection granted by our currency mix, thanks to the measures taken at the beginning of 2020, our FX, especially at net profit level, is hedged at around 90%.
As you all know, the potential economic impact of this crisis in the short, medium and long term are becoming more evident week after week. Most governments has already started planning for quick and substantial economic recovery. This v shape everybody is now looking for will be after the contention of the virus, the second victory of our societies. While this accelerated recovery is possible, unfortunately, all international institution agree on the fact that some specific industries will suffer a structural impact in the medium and long term. Therefore, it's essential to identify sectors with potential to act as engines for economy recovery.
Competitive industries that are increasing activity naturally and can create sustainable jobs directly in their supply chains without putting additional pressure on public finance. Industries that accelerate on the implementation or long term strategy priorities for our economies such as digitalization and ecological transition. Several statements made by European leaders in the last week confirmed this vision. The president of the European Commission has identified the European Green Deal as a key driver for growth and resilience and by president Timmerman has underlined the need to focus on sectors that will prepare our societies for the future creating job for this generation in the and the next. Most European government are following the same line and the European Parliament has launched an alliance bringing together policymakers, business association and NGOs to promote the green recovery.
In Spain, the government has already submitted the revised National Climate and Energy Plan to Brazil reaffirming its ambition. The Vice President and Minister of Ecological Transition has been put in charge for the Spanish recovery plan. The acceleration of investment we are confirming today is the clearest evidence of Iberdrola readiness to contribute to this effort, a readiness that I have transmitted personally to Spanish and European authorities. Moving on the highlights of the 2020. Iberdrola net profit adjusted for nonrecurring items increased by 5.3%, reaching EUR $968,000,000.
The acceleration of the investment, which in 2019 already lead the record figure of EUR 8,700,000,000.0 continues in the first quarter, increasing by a further 24% to reach €1,717,290 This, together with operating efficiency, has driven a 5.8% increase in EBITDA up to 2,007 and €51,000,000 We continue combining growth within a strong financial position as shown by all our solvency ratios and our available liquidity, which I mentioned before reaching €14,000,000,000 On the top of this, on February, we finalized the divestment of our stake in Siemens Gamesa. This transaction has allowed us to absorb the one off impact already registered in our Q1 results due to the decision taken by the UK government to maintain the corporate tax level at 90%, reverting the decrease previously announced. Overall, non recurring result registered in the first quarter reached EUR289 million, driven our reported net profit figure to EUR1256 million and giving us an additional room for maneuver to compensate potential negative impacts due to COVID-nineteen in the coming months. Finally, on April 2, we celebrate our Annual General Meeting with a quorum of 77% and all items of the agenda approved by an average of 98%. The General Assembly also approved a total annual shareholder remuneration of EUR 0.4 per share to repay in 2020 against 2019 result.
Focusing now in operating result, as I said, EBITDA increased by 5.8% to EUR 2,751 million, thanks to the performance of Renewables Generation and Supply, with offset evolution in Networks. In this business, EBITDA decreased by 4.7% mainly affected by Spain and USA. In Spain, results reflect, as expected, the transition to the new regulatory period and the year on year comparison is also affected by strong one off accounted for last year. In United States, EBITDA was impacted by IFRS adjustment related to deviation in demand and energy cost versus regulatory assumptions. As expected, these amounts are already reflecting regulatory asset under U.
S. GAAP and therefore will recover in the coming future with positive impact on Consulatee's IFRS result in the next years. Renewable business was up 6.1% due to the contribution of new capacity installed over the last twelve months. Higher production in UK, mainly in offshore wind and normalization of short wind resource in United States boosted by the increase in availability was already reached 97%, the highest levels in the last five years, and the increase of hydro production in Spain and Brazil. Today, our hydro reserve in Spain stand at eight terawatt hours, 50% above previous year's levels.
In Generation and Supply operating result rose by 26.5%, reflecting the increase in production as well as price hedge and the impact of lower procurement costs in our short position. In addition, despite complex market condition, result improved in UK due to tariff cut review in force in fourth quarter twenty nineteen. Despite recent movement in currency market, the overall foreign exchange impact in operating result is not significant as the revaluation of the dollar and the pound offsets the 10.5% depreciation of the Brazilian reals. As mentioned, over the first quarter, investment acceleration has continued reaching EUR $1,729,000,000 in gross term, a 25% increase versus 2019. Close to 50% of total investment were allocated to renewables with an increase of 47%, mainly driven by the construction of Isanglia 1 in U.
K. And the progress of wind and solar project in Spain. An additional 44% correspond to net loss for a total of 22.7% rise with gross investment almost doubling versus last year in United States driven by transmission and distribution in Maine and New York. The remaining 7% correspond to generation and supply, mostly related to capture cost which are, as you know, capitalized. In the 2020, we reached a total customer base of 25,300,000, up close to MXN 1,500,000.0 last year.
In terms of new capacity over the quarter, we have installed 1,200 new megawatts, four times the capacity installed in the first quarter twenty nineteen. Capacity additions include the St. Galaguan offshore wind farm in U. K. With more than 600 megawatt installed by the March out of the seven fourteen of the total capacity.
I can confirm that last week we finished the installation of all wind turbines. They will be fully in operation before June. 01/1930 megawatt of offshore wind mostly in United States more than 70 megawatts of solar photovoltaic in Spain and Mexico and finally, seven eighty megawatts to Polo Bamba III plant in Mexico. In the last twelve months, we have installed 5,500 megawatts and we have more than 8,500 megawatts under construction that will be completed mainly over the coming two years. Over the first quarter, we have continued focusing on cost control.
Net operating expenses to gross margin ratio improved by 150 basis points year on year to 23.5, reflecting the implementation of measures already planned in all areas and also the impact of restriction on mobility and remote working. Thanks to the investment and digitalization carried out in the last year and the dedication and effectiveness shown by our employees over the last six weeks have not affected our operation. Sort of these unplanned savings are expected to continue over the coming months. Operating cash flow reached EUR 2,112 million in the first quarter, up 4%, allowing us to accelerate investment and reinforce our financial strength and liquidity. Our FFO to adjusted net debt ratio stands at 21.5%, an improvement of 110 basis points versus twelve months ago.
On April 2, Iberdrola held the first fully remote Annual General Meeting ever organized in Spain. Despite mobility restriction, attendance reached 77.04, three points above last year and all items on the agenda were approved by an average of 98%. I would like to reiterate my gratitude to all our shareholders for their participation and support. Following the General Assembly, the Board of Directors approved yesterday the execution of new Verdrola Retributio Flexible program in July, which will amount to at least EUR 0.232 per share either in cash or shares. Adding up the interim dividend paid in early February, total non shareholder remuneration reached EUR 0.4 per share.
As usual, to avoid dilution, a share buyback program will be executed, maintaining the number of shares outstanding as is €240,000,000 The buyback program currently under execution related to previous dividend will be finalized by July 2020. I will now hand over the CFO, who will present the group financial result in more detail.
Thank you, Chairman. Good morning to everybody. As the Chairman has said, I wish health to everybody. First quarter results, EBITDA was up 5.8% to €2,750,000,000 and adjusted net profit grew in line 5.3 to €968,000,000 FX evolution has been as follows: dollar approached against the euro by 3.3% the pound by 3% and the real has depreciated 10.5%. Impact is almost neutral at the EBITDA level.
Adjusted net profit excludes four eighty four million euros of the Siemens Gamesa capital gain, which is partially offset by other nonrecurring impacts, especially in taxes, mainly the €159,000,000 in The UK as the corporate tax was maintained at 90% versus the 17% initially planned and another impact of around €20,000,000 due to timing adjustments in The U. S. For a total of 179,000,000 There are another EUR 17,000,000 net increase in customer provisions linked to the COVID-nineteen. After this impact, reported net profit reached EUR $12.57. Revenues decreased by 7% to €9,400,000,000 and procurements more than doubled this decrease to 16.1%, reaching €4,900,000,000 As a consequence, gross margin rose by 5.1% to €4,500,000,000 Net operating expenses fell by 1.3% to €1,100,000,000 Thus, as the Chairman has said, the efficiency has improved by 150 basis points as gross margin grew by 5%.
The improvement in net operating expenses is driven by cost contention and efficiency plans put in place in 2019. It has also a positive impact of 25,000,000 as the AGM premium was paid in Q1 twenty nineteen and this year will be paid in Q2. Levies grew by 13% to €726,000,000 negatively impacted by a €44,000,000 increase in Spanish taxes on generation as a 7% general tax was temporarily suspended in Q1 twenty nineteen and afterwards reinstated. There is an €11,000,000 increase due to the rise of the ENRESA tax as a consequence of the nuclear agreement in Spain. Other levies rose by another €29,000,000 mainly linked to The U.
S, including property taxes of new renewable assets in operations. Along the year, the lower price environment should reduce levies. This effect, combined with the dilution of the suspension of taxes on generation on Q1 twenty nineteen will help to diminish this increase. Analyzing the results of the different businesses and starting by Networks, its EBITDA fell 4.7% to €1,200,000,000 as double digit growth in The UK and Brazil has been more than compensated by a €79,000,000 negative impact in The U. S.
Due to the IFRS temporary adjustments and lower revenues in Spain that reduced EBITDA by another €37,000,000 As you can see in the slide, Spain contributed 31%, Brazil 25%, The U. S. 22% and The UK also 22%. Analyzing the results more in detail, in Spain EBITDA, in Spain EBITDA fell 10.6% to €390,000,000 due to the 50 basis points lower remuneration established for 2020 in the new regulatory framework, bringing down revenues by €14,000,000 and the impact of €23,000,000 of positive settlements accounted for in the 2019. In The U.
S, IFRS EBITDA, non U. S. GAAP EBITDA, was 23% down to $3.00 $5,000,000 driven by $91,000,000 negative temporary adjustments under IFRS as a consequence of negative difference in volumes and energy costs due to an extremely mild winter that nevertheless will be recovered during 2020 and following years. In Brazil, EBITDA grew 21.7% to BRL $1,471,000,000, driven by the tariff revision in Quellba and Concern in April 2019 and in Electro from August. Increasing contribution also from transmission assets as well as cost contention due to efficiency plans.
Finally, in The UK, EBITDA was up 10% to £238,000,000 with higher revenues both in transmission and distribution as consequence of the growing asset base due to investments. In renewables, EBITDA grew 6.1% due to €725,000,000 driven by the strong growth in The U. S. The UK. Average installed capacity increased 5.3% with fourteen twenty two megawatts more than last year.
As you can see in the slide, The UK contributed 35%, Spain, 25% The U. S, 18% EIA, 15% and Brazil and Mexico, three percentage. In Spain, EBITDA was €182,000,000 16% below last year despite a 17% higher output driven by lower prices in its sales to Iberdrola supply business and 29% higher levies due to the reinstatement of the 7% tax on generation after its suspension in Q1 twenty nineteen. In The U. S, EBITDA increased 21% to $145,000,000 due to a 30% higher output following the seven thirty nine megawatts increase in operating capacity and a higher wind resource.
This has been partially compensated by a 29% higher levies as mentioned previously. In The UK, EBITDA was 29% up to £214,000,000 with higher contribution both in onshore and offshore as a result of the entry and operation of East Of Anglia. In Brazil, EBITDA decreased 24% to BRL120 million with a 13.7% higher output, both prices normalizing versus last year's extraordinary high levels. In Mexico, EBITDA decreased 5% to $27,000,000 as a consequence of the 6% lower output. Finally, in IEI, mainly Europe, EBITDA grew 1.5% to €108,000,000 due to a higher contribution from Wickinger.
Generation and Supply EBITDA was up 26.5% to €760,000,000 with all geographies growing. In Spain, EBITDA was up by 14% to €445,000,000 with a 5.7% lower output, both higher purchases and lower prices versus Q1 twenty nineteen. We continue our active management of our customer portfolio of energy and smart solutions. In Mexico, EBITDA grew 20% to $222,000,000 thanks to higher sales as a consequence of an 11% increased production linked to the 1777 megawatts new installed capacity in 2019. In The U.
K, the EBITDA grew 85% to £81,000,000 driven by the SVT tariff cap methodology review as well as lower procurement costs despite lower sales. Brazil added 87,000,000 reais to the EBITDA in a context of business normalization after the one off negative effect that impacted the results in the 2019. And in IEI, EBITDA was €1,400,000 negative, improving significantly but still affected by initial development costs of our supply business in Europe. I would like to stress that we have reached 1,600,000 contracts or 88% more than last year. EBIT was up 0.6% to 1,600,000,000.0 D and A and provisions grew 14.6% due to the increase in the asset base and activity around EUR 100,000,000 and EUR 26,000,000 higher provisions for bad debts in this new environment.
Net financial expenses improved €118,000,000 to €180,000,000 driven by €123,000,000 linked to a one off of capital of gains in FX hedges. Another €60,000,000 positive impact due to the lower cost of debt that improved 20 basis points to 3.48% and a €21,000,000 negative result due to the higher average net debt. Our reported credit metrics improved in spite of the mentioned debt increase. As the Chairman has explained, our strong financial position is key for the company to continue its financing in the markets in the current environment with our strong investment plan helping to the economic recovery while limiting debt increase thanks to our strong cash flow generation and asset rotation program. On a like for like basis and considering homogeneous criteria for IFRS 16 in both periods, FFO over adjusted net debt improved 1.1 percentage points to 21.5%.
Net debt to EBITDA improved to 3.7 times from 3.8 times. Retained cash flow over net debt improved to 19.7% and leverage ratio was 44.6%. As of April 29, we maintain ample liquidity of more than €14,000,000,000 more than fulfilling the rating agencies' requirements with thirty months coverage of financial needs in our best case scenario and twenty one months in distressed ones. During April, we have increased our liquidity by around EUR 22,000,000,000. Our sources of financing continue to be highly diversified.
Currently, the bond market is 60% of the sources. The weight of the bank financing is 16%, giving us opportunity to increase this kind of funding if required. We keep a stable commercial paper exposure of around 6% and supernational lenders have another 11% share. Up to date, the group during 2020 has obtained €3,800,000,000 equivalent of new funding in different markets at competitive levels, even in the current environment, and continue with our own green financing strategy. In the bond market, we have issued €1,600,000,000 equivalent.
In the bank market, we have raised close to €1,000,000,000 and with development months another €1,000,000,000 Iberdrola Group remains the world leading private group in green bonds issued, the most preferred asset class for ESG investors due to the use of proceeds, strict reporting and external verification. Our current asset base and investment plan focused in the energy transition allow the group to continue taking advantage of the green bond market. In 2020, Hibardola signed new transactions totaling €1,800,000,000 of green financing with high demand at very competitive prices, including €1,500,000,000 in bonds for a total of €21,900,000,000 of green and sustainable financing outstanding up to date. In the annex, you will find also the scrip dividend calendar. Thank you very much and I will now the Chairman will end this presentation.
Thank you, Pepe. The set of results we are presenting today shows the strength of Iberdrola model. In the first quarter, the company continued accelerating investment of 24% even though the restriction created by COVID-nineteen started in March. Total installed capacity reached 53.3 gigawatts with an increase close to 3% only in twelve months. Given the expansion of business activity and efficiency EBITDA was up by 5.8% and adjusted net profit increased by 5.3% up to EUR $968,000,000.
Looking ahead, even though predicting the consequences of this unprecedented scenario on 2020 full year result is challenging, Iberdrola has analyzed in detail all potential risks from the current next scenario and I can confirm we face the coming month from a position. Our current liquidity cover thirty months of financial needs and our mix of geographies together with the hedges already closed reduced very significantly our exposure to currency fluctuation. On top of this, our activities are mainly focused on regulated networks, which have explained as I have explained, have a revenue decoupling mechanism, ensuring the recovery of revenues if demand is lower than expected. The recovery is recorded either immediately in GAAP or in the following years under International Accounting Standard. In liberalized business, our structural short position in generation, together with the fact that 100% of our 2020 production has already been sold forward and 50% increase in hydro reserve year on year to reduce our risk very considerably in the next scenario of decreasing prices and demand.
Our renewable business is also operating with no major impact and the construction new project continues on track. New capacity that will be commissioned in the coming months together with a positive impact of tariff increase along the coming quarters, more in United States and Brazil and the reinforcement of cost saving even including €30,000,000 dedicated to donation of medical equipment will continue to drive an improvement in full year operating results. We are fully aware that the current restriction on the movement of people as well as the economic crisis could impact in the recovery of receivables of potential increase bad debt even with extraordinary measures being implemented by regulators. In addition, as mentioned, the UK government decision to maintain corporate tax rate at 90%, canceling the decrease of it to 70% plan has also impacted our result. Fortunately, the sale of the stake of Siemens Gamesa has created headroom in our result to absorb the impact of this measure and the potential negative effect of COVID-nineteen.
As a result, we are reaffirming our high single digit growth outlook at the net profit level for full year 2020, maintaining our dividend policy and our financial strength even with a record investment of EUR 10,000,000,000 planned for this year. We expect to give you more details about our outlook for coming years in our Capital Market Day, which as you know had to be delayed due to the last quarter delayed to the last quarter of the year given the restriction created by COVID-nineteen. To conclude, let me underline that all the action taken by the company since the beginning of this crisis are fully consistent with our deep belief on corporate social responsibility. This is the moment for companies to demonstrate they really seek a balance optimization of the interest of shareholders, employees and associates at large. For shareholders, this result combined growth, financial strength and clear commitment to dividend, which we know is very significant to the 600,000 people who own Iberdrola shares.
And looking ahead, we are maintaining our 2020 outlook and are fully confident on the alignment of our business model with the strategic priorities of the countries in which we operate. This is possible thanks to our 40,000 almost 40,000 employees. After twenty years experience with the professionalism and dedication, I must say they these days, I am constantly being impressed by the response of fever droolers, women and men. We have put in place more than 100 health and safety measures in the group to protect our workforce and contractors in contagion. In addition, we are a selective recruitment of new personnel reinforcement training and development with new online resources.
And finally, during this crisis, we are also promoting new initiatives in line with our commitment to social dividend. Having committed close to €30,000,000 of donation of medical equipment, offering new flexible payment option to our customers or boosting job creation through accelerating investment in anticipation of almost €4,000,000,000 in parcel to our suppliers. To finish, let me underline that at Iberdrola, we are fully shared the vision that exiting this crisis will require reinforcing the resiliency and the inclusiveness of our societies. And this will only be possible if we focus resources on sectors aligned with the strategic priorities. Sectors that can create sustainable and qualified employment, like digitalization and energy transition.
The contribution of everyone will be needed and you can be sure that the Verdola will rise to this challenge. Thank you very much. And now we are ready to answer any questions you may have.
Moving towards the Q and A session, we are starting with the first question coming from Javier Suarez, Mediobanca and Stefano Bezzato, Credit Suisse. What would be the COVID-nineteen impact on your net income target for 2020, excluding the offset from the capital gain of Siemens Gamesa? Do you feel the necessary to revisit your dividend policy and gearing targets as a consequence of the COVID-nineteen related economic deceleration?
This moment in time, we don't have any information that leads us to change it.
The second question comes from Meike Becker, Bernstein and Jorge Guimaraes JV. What is the expected impact of COVID-nineteen on the remuneration of The U. S. Networks? Could you please elaborate in more detail on the COVID-nineteen impacts in Brazil and how this might be compensated by the regulator?
This question is related again to COVID nineteen effects as as expected, and it's coming from Alberto Gandolfi, Goldman Sachs, Stefano Bezzato, Credit Suisse, and Jorge Alonso, Societe Generale. Sorry. We are going to repeat the second question answer due to the microphone of the Chairman was off. Sorry again.
So I was saying it's a it Baker for Mainsteen and Jorge Marais from GB. We expect that the impact on the in Edibles will be fully recovered through revenue decoupling mechanism. In the case of United States, that will be registered in our accounts of 2020 U. S. GAAP.
And we are in this moment in talks to manage as well to be registered in the IFRS in the risk in the consolidated account. But if not, that will be already in the following years registered. In the case of Brazil, a part of that one which as well is on the same basis, which can be already registered through a regulatory asset in the accounts of 2020. But also, the government has already provided certain liquidity mechanism for already compensating the companies and avoiding them. They will remind this debt in the balance sheet.
So we have already managed the situation in the sense of two things. For one side, we are providing this giving this facility to the investors to the investors to the to flexibilize the payment. If another side, in some cases, certain of those customers are not allowed to pay because they are not allowed to leave their homes or the of the people within so but I think that is in the case of certain countries with mostly the bills are already paid through the banks, we feel that the situation can be easily be managed. In the case of those which we have to either they have to pay by check or they we have to go to their home for cashing, I think the situation should be more difficult. And that is why we are in certain in those countries.
We are in talks with the regulators for already finding already ways of compensation. That's the case for instance in Connecticut. We have already allowed us to register all the extraordinary cost incurred as consequence of this situation. And in the case of Brazil, what we are in talks as well with them, how we can already make some kind of action to compensate it. So I think we are on work on that one.
But nevertheless, think we have already still our, let's say, cushion of the capital gains. We have already give us a confident that we will have money enough for covering this thing. We have already put, as you may as you see already in our account, some extra provision on the range of EUR 30,000,000 or EUR 40,000,000 for bad debt, which is included in first quarter already. So I think it's in the worst scenario. If we are seeing the worst case scenario, we can cover all those things with extra capital gain we have already in this moment.
So we apologize again to the audience and due to some connection and noise that we have noticed about it, we are going to repeat the first question and the answer to the question one, okay?
The first point, you can repeat again?
Yes. The question comes from Javier Suarez, Mediobanca and Stefano Vezzato, Credit Suisse. The text is as follows: What would be the COVID-nineteen impact of your net income target for 2020, excluding the offset from the capital gain of CMM Gamesa? Do you feel the necessary to revisit your dividend policy and gearing targets as a consequence of the COVID-nineteen related economic deceleration?
I'll start with the last one. We, as I mentioned, we are not already planning to make any change in our dividend policy. We are maintaining our commitment with the shareholders and to keep the dividend to grow the dividend in line with the growth of the net profit. In terms of the result, I think the guidance we make is on net profit level, but in a level of EBITDA, our expectation is that the EBITDA grows at similar level and in line with the first quarter. So I made very simple numbers.
I think first quarter, I think we have already March, we have been affected by COVID. In January, February, we have already had normal months. If we have already that gave us room for four months as bad as the first March and eight months with a normal condition. So now the situation we expect and we hope that the things are moving in the to the normality step in by step by moving, not in the situation we've been facing in some countries in which March and partially in April has been practically closed all businesses. Now it's going back to the activity.
And so I think our expectation is that EBITDA grows in the same level as we are already been growing at the first quarter for all the reasons. You know, more power generation, more hedges in in our liberalized business, all the electricity sold, short in electricity, etcetera, etcetera. I don't repeat all the things I already said before. So I think with those things, net profit in that case, with a cushion we have already with the the actual capital gain, I think give us the comfort to keeping all this in the line I was mentioning.
Question number four related to renewables. The current scenario is coming from Martin Young, Investec, Fernando La Fuente, Alantra Javier Suarez, Mediobanca Makee Becker, Bernstein and Jorge Alonso Sosjev. How do you think that the ongoing deceleration may affect your plan to develop renewables energy and energy infrastructure in your main markets? Given the large number of orders for investment you have placed and the clear support for suppliers, have you been able to secure pricing discounts?
So I think I I don't understand very well your question. I think our plan is clear. I think it's all the input we are receiving now is that the acceleration of the green investment will be absolutely needed for living from this economic crisis. So that is what is being said by United Nation secretary general. That has been said by the president of the European Commission.
That has been said by the by president Timmerman. That has been said by the Spanish government, by the government. Everybody is relying in green green green economy and transformation of that one. And that gave us an opportunity, and that is what we are trying to do, accelerating our investment instead of delaying our investment. I think we are fortunately, even during this period of crisis, all business has been affected or most of investment affected, but we've been considered as essential service, and we have already had all kind of support and flexibility in most countries for continue our activity.
That's why we are already not only maintain our investment, we increase our investment in the first quarter by 24% to our previous year. We have already put in service four times more power than previous year in the same quarter. And our construction of the 8.5 megawatt which we have in construction continues in good shape and we have not foreseen delays in the put in operation. The fact, I think I mentioned, is Anglia 1, that is one of the driver of our growth in terms of result. Is Anglia 1 last turbine has been already erected last week.
So nothing now is probably in the next four, five weeks. The seven fourteen megawatt, our last offshore wind farm will be fully generating cash flows and fully generating results.
The next question is a kind of follow-up regarding to renewables and comes from Alberto Gandolfi, Goldman Sachs. Can you give us an update on renewable auctions? Do you envisage any delay in U. S. Offshore or elsewhere?
Well, I I the offshore project, it takes I think first thing what I've seen in the last week is in the case of United States, every time more and more states are already fixing their own targets for offshore and for renewable energies. So as you know, the the the process for development of an offshore wind farm takes gears. So I think it's this one, what we can say is The United States, we have a portfolio of almost seven thousand seven seven thousand megawatts 7,000 megawatts. And I think if that is many of those, if we would like to make tomorrow, we will have not all the process and the permits and the things for making those things like that. I think in this moment in The United States, day two of short wind farm, we have been now been awarded one from Connecticut, one from Massachusetts.
I think the expectation of the first one, the permits of Pinkyard is by the end of this year. So the plan of this one is can be already in operation by 2024. And another one for Connecticut, which is beside, the plan is will be fully in operation in 2025. So that means that they probably, I think, is already this bin yard is delayed already on the initial plan. We were planning to have that one by 2023, and it's going to be in 2024.
And another one, the plan was 2024, 2025. So I I think we are not seeing that problems in the in the the auctions can be already delayed. So because we have already time enough for making already all the necessary step for achieving all the permits for being able to present to this auction. And in the two ones, we are in construction, I think is in line with the last expectation, which was 2024, 2025, which I do know is different of the initial one, which was slightly earlier than these dates.
Question number six comes from Martin Young in Investec. What are you asking of GM UK government to offer by way of bad debt protection for b to b supply? By way of comparison, the water regulator has proposed measures. Number six. Well,
I can say, I think we are in continuous dialogue with the regulator and with the ministry of energy and industry. So I think it's a continued talk with them. They are aware of the problem and, but still they are not already any any solution. The only thing I have we've been allowed in positive to be I mentioned in my speech, a a temporary flexible scheme for all the activities related with networks for in case we can already suffer any kind of delay in our work. But I think as much I can say is that they are already aware of the problem.
We are in talk with them, and we will be able in due time to look for some kind of solution, either in the area of retail, either in the area of of networks, which some of the step has been taken, especially in this one of the to not to be affected for the potential impact that any delay as consequence of that one can affect to the construction of the works of the on networks.
Number seven comes from Sam Ari, UBS. And he would like to know if our confirmation of the net profit outlook in the Slide 40 refers to the outlook for 2020 only or if at this stage we feel comfortable reconfirming the midterm growth guidance as well until the year 2022?
Well, fortunately, we are ahead of our plans. I think we are almost three years ahead in our dividend targets, and we are almost two years ahead in our net profit target. So I think that is something which is more that we will give you more details in the Capital Market Day. But I think for the time being, we can say that we are ahead of the plans and that's why we give us certain room for the next year's plans as well.
Number eight comes from Alberto Gandolfi, Goldman Sachs. Do you see the risk of a social tariff implementation in any of your geographies?
Well, I I think probably we have never had such a fluid dialogue with all the authorities in all countries that we are already having now. I I think that point very easy. So I think there are not very many sectors we cannot structure of the economy in a in a recovery. And they are not and and and I think we are one of the sector which we are not only a a structure of the recovery, but also we are fully fitting on the strategies of most of the countries in this green recovery. So that's why I think it's we need already, as is happening in Brazil, they are already trying to reinforce our balance sheet for already being able to continue making the investment with the country required.
That's why I think we are confident that we will already been able to deliver what has to be delivered in terms of investment and to contribute as much as we can to the recovery in the country we have already presence. That's why we are already advancing the our purchase to our our vendors for keeping the the people in place to continue working and not to be forced to make redundancies as in most and other sectors we've been doing. In our case, I announced as well our plans of increasing our number of recruitments with almost four five thousand people during the year for precisely being able to absorb and to manage the investment in the new operation, either in renewables, either in generation, either in networks, in the different countries already present.
Question number nine comes from Jorge Guimaraes, JV and Antonella Bianches, Citigroup. There is a mention of the presentation about twenty twenty one volumes being 75% hedged. Exactly which volumes per client's category are you mentioning? Is it possible to provide a price comparable to pull prices for us to have an idea of the price range versus the market?
Marco, you can you reply.
Yeah. If you want more, substitute, we have already sold a level of production of 77%, and that accounts for a quantity of 46.5 terawatt hours. And the price is at the similar prices that we have already sold this year, and that is well above 7070%, €70 per megawatt hour. So it's as much information as I can give you right now.
Thank you, Paco. Question number 10 comes again from Jorge Guimaraes, JV. Is it possible to provide some insight about the level of protection on the Brazilian reals, namely up to which euro Brazilian real rate is the company protected?
You can already make that.
Yeah. Below 5 reals per euro.
Question 11 comes from a few people: Fernando LaFoente Alantra, Elquim Mamadouf, Bolomberg, Javier Suarez, Mediobanca, Stefano Bezzato, Credit Suisse and finally, Emmanuel Palomo, Exane BNP. Can you please provide an update on your expectation of the future, the impact of COVID-nineteen on working capital across your businesses? Where do you expect net debt to be as of the end of this year?
So as I mentioned in my speech, we this the bad debt of these receivables is we expect them is going to increase and that makes ourselves to increase EBITDA debt, but as well our cash flow generation can already compensate a bit. And one, we feel that we are going to finish by the level of around €39,000,000,000 of debt. But our ratios in FFO net debt and net debt to EBITDA, we expect to be more in line with last year. So we cannot be already changed much or will be more or less in line.
Number 12 from Antonella Biankesi, Citi Group. Would you consider reconsider your renewable growth in light of the current spot and forward power prices? Number 12. Will you consider? Your renewable growth in the light of current spot and forward top
of that. I I I didn't see I I said already. I think it's all the inputs we are receiving is that this recovery has to be green. I think yesterday, I had board, and I was making already just a brief of the different speeches of the different agents in the different countries, political agents, different countries. And the common word is green, green, green and a transformation of the economy in more sustainable, more reliable.
The green deal is a must in Europe. In Spain, minister in charge of this recovery plan is the Vice President for Energy Transition. So and everywhere. And I think it's an area where we can already provide funds without being requesting money from the national budget, which I think all the countries is going to have already a very difficult situation and they require sectors we will fit in their strategic goals and at the same time we don't require already much public funds because this public fund will have to will be needed for another areas which cannot be covered by the private private investors. I think in this case, we are fitting both things.
We can already we are fitting on on online with their target and goals in terms of making already more sustainable, less depending countries in terms of energy for third parties, cleaner and cheaper. And the second one, it would that will not require funds from the national budget. That is what is already and that's why I think my position in our position is that that is not only a threat, that is a great opportunity for acceleration of investment in this sector. That's precisely what the company is doing and that is what we have foreseen and that is what we plan to do and that is what we continue doing.
IGNACIO Next question, 12 plus one, is coming from Manuel Palomo Oaxana and Alejandro Vigil Fignus. Could you please update on us on the renewal of electricity contracts in Spain? Should we expect a major decrease in final achieved clients as a result of the recent power price drop?
So I think most of our electricity in the renewables is sold through our commercial organization. So I think it's almost only around 30% is already market driven. The rest is already just managing this in this manner. So and I think we are not seeing this one. I think what we are making most of the in the case of Spain, the renewable we are making, we are already selling through PPAs in some cases, but it's not through our commission organization.
We have thousands of people. We have millions of customers and that is what we are making. In some cases, they are we are making contracts with PPA, with certain organizations for long term. In other cases, we are already making in mature terms. So I think that is part as we have already with the rest of our power generation.
Renewables is no different than the rest of our power generation in this regard.
And related to Paco, the number 13 as well, the current market situation liberalized about the new contract that we are renewing. We have the new signs that we are doing.
Well, as you know, all as you all know very well, the market, the price market is moving. The the the keyword in this moment is volatility. So we are seeing forward market prices going up and down. And recently, the market price has the forward has recovering more than 10%. So within this volatility atmosphere, it's even more important to catch the prices.
And this is exactly what we are seeing with our customers. So our operations continue more or less in the same basis as it was before the COVID -nineteen starts. And now we are in continuous contact with customers, with new customers for the new projects and with old customers and with customers for the old projects. And the operations continue and we are still selling the energy and the level of prices of forward is exactly related to the market that is nothing to see with the spot market. So just to summarize, exactly in this moment of volatility, of high volatility is more important to hedge.
This is what our customers are seeing and this is what we are offering and, we are matching both of us, as as it was. So we do not expect any, any influence or any problem derived from this, movement of the prices.
When you are in the middle of a if in a storm, so people which are in the middle of the storm is looking for those, we can already provide already safety, security, solidity, a good place. And that is what we can offer. I think we are a company solid. We are a company reliable. We are a company because we are already committed delivering what we are committed.
And that in this moment, the customer is even appreciating more than ever. And that is what we are foreseeing in the different places, different countries where we are. Okay?
Question number 14 comes from Rolf Poulay in Morgan Stanley and is related to M and A. Does the current environment offer opportunities for acquisitions and consolidation given either FX moves and or the challenges faced by smaller companies operating in the same atmosphere as Iberdrola?
I was surprised that this question has not been passed yet. So as you can imagine, in this moment, in our list of priorities, is not precisely looking for M and As. I think we are fully, fully dedicated for first keeping the safety of all our employees and our collaborators, providing the electricity to our customers, continue with the investment with the purchase to our vendors to flexibilize the things the payment to those customers which are already in a difficult position and trying to deliver the plans that we are already just saying and announced today. It's not in our head in this moment to look for those opportunities, but because we are fully, fully dedicated to another thing which is
more already according with the present circumstances. Question number 15 is slightly difficult to be answered, but comes from Jose Javier Ruiz Barclays. Mr. Alban, you have always been a visionary in the sector. What significant paradigm change do you expect in the sector in the new post COVID-nineteen world?
Well, I think it's I live in a situation very badly many years ago when I was already part of the reconverting the shipyard into aeronautics in a very, very deep situation with the rate of unemployment on the high 20s in the country bus where I was living. And I think we made there just a plan. We will transform completely the country of us in today's, the most active and dynamic region of Spain. And this was the plan three r. And the plan three r was to identify which business has already future and we gave the support to this business.
Which business are obsolete or has no future and we do the necessary for suffering the less as possible in this transition period and for looking for new sectors which can already provide already more wealth in the future. So I think now is a good time for making an analysis in the countries in Europe in general and that is what we've analyzing this moment. So I think many, many months ago we make already in the ERT, we make a document with what's called the European Industrial Renaissance. So and and and and what we were already for simply saying those things, which sectors in Europe can not no. It's not which sectors we can already help for already making the things better.
So I I think now Europe has already focused in in a few sectors. One of those is our sector. And our sector has a great opportunity. Europe is already fully dependent or mostly dependent of energy supplies for our countries. We are seeing the problematic we are suffering what we are dependent on our country.
We have the opportunity of being self sufficient, almost self sufficient in energy in Europe. We have already we can already we have a good industry in Europe of renewable, especially wind, but we can already develop an industry as well in in solar. What we can already develop an industry in batteries for the storage. We can already very good industry in electric equipment. We can already have a huge potential of that one.
And I think in the in in in a few years, my feeling is that we can already achieve even the European target for decarbonization. Even Serbia, we already, all of us, grow in the same direction trying to accelerate the renewables, networks, storage, hydrogen, whatever is needed. So for transport, electrification of transport, for cooling and heating in the homes to make already more efficient than this today. And that, at the end, will make Europe industrially more powerful. And in terms of, the external depends of our of our external energy demand will diminish on this on this time.
So I'm optimistic that if we made the things properly, that can be used as an opportunity for doing the things better in Europe and transforming the Europe in more a better circular economy in a much more reliable in all terms.
The last question is coming in Spanish. And if you don't mind, we are going to answer it in Spanish as well. As
a business purpose person that has managed many crises in the past, how do you think that will overcome this scenario, in particular in Spain? Well, I fully trust in our situation of strength and we've experienced previous situations in many different fields and we've always been capable. We've our workforce has been able to adapt to these new environments and has been able to overcome many difficulties. And I think that the case we're looking into right now is something that you can see on a daily basis. And I mentioned this in Spain, and we'll be getting back to normal little by little.
And yesterday, we reached an agreement with the trade unions. We agreed to a gradual normalization plan, always meeting the requirements we set from the very beginning, that is the safety and health of our workers and collaborators. We have to maintain essential services. That's one of the crucial things in many areas. And at the same time, what we also have to do is generate more activity and more jobs.
And I have to stress that. So this is why our approach is that we're not only not going to stop investing, but we're going to continue with our investments. And I've already said that in Q1, we've increased them by 24%. And we're not only not going to reduce our workforce, but we're going to hire another 5,000 people in the entire group, and we're going to increase our investments that last year totaled €8,000,000,000 and this is going to be over €10,000,000,000 And we've brought forward purchases totaling nearly €4,000,000,000 so that they do not have redundancy schemes, but rather so that they can continue to work with these contracts and not lose anything in the process. And it's true that our results in all countries have gone very well or have gone well.
And in Spain, they have been affected by, well, situations in which there's been a drop of 7% in terms of net profit because of an increase in the payment of levies, as the CFO pointed out, because of the regulatory cutbacks in the distribution networks and also because of the impacts that have been produced by low levels of activity in the month of March. But we are optimistic as regards the company and the end of the year. And while we know that the investments that we are making together with the efficiency measures we have already implemented and together with the diversity of countries and markets and the hedging we have for exchange rates and currency impacts and the capital gains that we have also obtained due to divestitures, we know that we will be able to maintain our growth expectations in terms of results. And that means that our 600,000 Spanish shareholders can please be sure because we are going to pay dividend that we'd already committed in previous years.
With the last question and answer, we have answered the 16 questions we have already received, so all of them has been answered. Event has lasted slightly more than they initially expected due to this fully commitment with your questions. And now let me please give the floor to Mr. Galan to conclude this event.
So thank you very much for this opportunity of sharing with you the result of the company in this very particular and tough situation. And I hope that things is going to go better in the next few months. And we will be in touch with you in the next, in July when we present the second quarter result. Then I expect then the health and the situation of all your families and everybody will improve in this period. Thank you very much for your attendance.
And if there are any question more, you our investor relation people will be ready to reply to you. Thank you very much.