* Iberdrola sees 2010-2012 annual profit growth below 5 pct
* Centrica promises improved earnings growth in 2012
* Downstream business hurt by weak power demand for both
* Spain's Gamesa also cuts 2012 targets
* Iberdrola, Gamesa shares down; Centrica up
By Tracy Rucinski and Adveith Nair
MADRID/LONDON, Feb 23 - Spain's Iberdrola
and Britain's Centrica posted 2011 results
marred by pressure on their downstream energy businesses, as
consumer demand remained weak in both countries' fragile
Spain's largest power utility cut 2012 targets after a
disappointing set of full-year numbers showed its expansion into
regulated markets and renewables had failed to offset distress
in its liberalised distribution business.
Yet Centrica, which owns Britain's biggest household energy
supplier, British Gas, said it expected to deliver improved
growth this year, helped by higher profits from its upstream oil
and gas business.
European utilities have been scrambling to shield themselves
from declines in their traditional downstream business, which
has had to reconcile falling demand as consumers' spending power
is pinched by rising prices and unemployment and government
Some, like Iberdrola, have tried to tap into faster-growing
emerging markets such as Brazil, with a firm eye on wind power
expansion. Centrica, meanwhile, said it would focus on growing
its upstream business through acquisition and organic
Iberdrola, plagued by a tough environment at home as the
Spanish economy threatens to slip into recession for the second
time in four years, posted a slight decline in 2011 net profit
and was forced to cut growth forecasts for this year.
Though it is a world leader in wind power, its renewables
business suffered weaker gross margins in Spain and the United
States, and the outlook for its business remains uncertain as
the Spanish government draws up plans to eliminate utilities' 24
billion euro tariff deficit.
The new centre-right government has already declared a
moratorium on subsidising renewable energy.
By 1200 GMT its shares, which have fallen 3.6 percent this
year, were down 3.15 percent at 4.519 euros.
Spanish peer Gamesa, which makes wind turbines and
competes with Denmark's Vestas, cut its expectations
for wind turbine sales in a measure it said was necessary to
keep debt in check, sending its shares down 9
Its growth in emerging markets like China, India and Brazil
has come at the expense of increasing debt more than investors
are comfortable with.
The outlook for Centrica was more promising thanks to its
plans to raise upstream UK gas and oil production by more than a
quarter this year. Analysts said the upstream business would be
key to delivering a company target to improve year-on-year
earnings growth for 2012.
Shares in the company, which have dropped more than 10
percent in the past year, were up 1.2 percent at 297 pence at