(Adds detail, spin-off confirmation, 2020 earnings)
MADRID, Feb 18 (Reuters) - Spanish energy and engineering company Acciona is planning to hive off and list its renewable power business on the stock market, the company said on Thursday as it posted an 8% rise in annual profit.
While the scale and structure of the listing have yet to be defined, at least 25% of the new company would be floated and Acciona would remain the majority shareholder.
The listing, which would include the entire energy business apart from a stake in turbine maker Nordex, is likely this year to take advantage of strong demand for clean-energy projects.
“In this environment an IPO of our Energy business would provide us the opportunity to accelerate our growth with the right cost of capital and a better balance sheet structure,” said Chief Executive Jose Manuel Entrecanales.
The energy business generated earnings before interest, tax, depreciation and amortisation (EBITDA) of 831 million euros ($1 billion) in 2020. Investment bankers expect Acciona to seek a valuation of at least 10 times the unit’s core earnings in a potential initial public offering (IPO).
The new structure should allow Acciona to increase its installed capacity by 2 gigawatts per year between now and 2025, double its previous target, the company said.
Shares in Acciona closed 11.4% up on Thursday, boosting its market value to 7.6 billion euros, after the group announced its board was considering the spin-off.
Net profit in 2020 climbed 8.1% to 380 million euros, the company said, even though revenue slipped 10% to 6.47 billion euros, largely because of a 796 million euro hit from the COVID-19 pandemic.
The company’s overall EBITDA, which fell 21.8% to 1.12 billion euros as the pandemic took its toll, is expected to rise by 10-15% in 2021, it said.
Acciona is one of several Spanish companies taking advantage of government incentives to develop wind farms and solar parks in a sector-wide expansion that is stoking expectations of public listings, partnerships and other deals.
Oil and gas group Repsol plans to spin off its low-carbon unit, which will mostly hold renewables assets, and sell a stake to a partner or list it publicly in the next two years.
The latest IPOs on the Madrid stock market were companies in the solar power industry - Soltec and Solarpack , currently valued at 1 billion euros and 709 million euros respectively. ($1=0.8302 euros) (Reporting by Inti Landauro, Arno Schuetze, Isla Binnie and Tomas Cobos Editing by Jesús Aguado and David Goodman)