AES Reports Third Quarter Financial Results – Completes 1,2 GW of Construction and Adds 2,2 GW of Renewables PPAs and Data Center Load Growth at US Utilities.
The AES Corporation (NYSE: AES) today reported financial results for the quarter ended September 30, 2024.
Andrés Gluski, AES President and Chief Executive Officer, said:
Our third quarter financial results and strategic accomplishments were very much in line with our expectations.
“Since our last call, we have signed or been awarded 2.2 GW of long-term contracts for renewables or new data center load growth at our US utilities. At the same time, we completed the construction of 1.2 GW of new projects,”
“Finally, we have announced or closed transactions for roughly three-quarters of our $3.5 billion asset sale proceeds target through 2027. We remain on track to deliver on all of our financial and strategic objectives in 2024 and beyond.”
Stephen Coughlin, AES Executive Vice President and Chief Financial Officer, said:
With our year-to-date performance and our outlook for the remainder of the year, I am pleased to reaffirm our 2024 guidance and long-term growth rates through 2027 for all metrics.
“We expect our 2024 Adjusted EBITDA with Tax Attributes and our Adjusted EPS to be in the upper half of our ranges, as we have had great success in securing the tax value of our growth investments. 2024 Adjusted EBITDA is expected to be towards the low end of our guidance range, primarily due to extreme weather this year in Colombia and lower margins in our Energy Infrastructure SBU.”
Q3 2024 Financial Results
Third quarter 2024 Net Income was $210 million, a decrease of $81 million compared to third quarter 2023. This decrease is the result of lower impairments and lower unrealized foreign currency losses in 2024, and higher contributions from renewables projects placed in service, partially offset by lower contributions from the Energy Infrastructure Strategic Business Unit (SBU).
Third quarter 2024 Adjusted EBITDA4 (a non-GAAP financial measure) was $692 million, a decrease of $298 million compared to third quarter 2023, driven by lower margins at the Energy Infrastructure SBU primarily due to the end of commercial operations at Warrior Run and prior year margin at the hedged merchant Southland facilities that are contracted primarily for capacity in 2024, and severe drought conditions in South America at the Renewables SBU. This was partially offset by higher contributions at the Utilities SBU and higher revenues from new projects at the Renewables SBU.
Third quarter 2024 Adjusted EBITDA with Tax Attributes4,5 was $1,168 million, an increase of $160 million compared to third quarter 2023, primarily due to higher realized tax attributes driven by more renewables projects placed in service, partially offset by the drivers above.
Third quarter 2024 Diluted Earnings Per Share from Continuing Operations (Diluted EPS) was $0.72, an increase of $0.40 compared to third quarter 2023, mainly driven by higher contributions from renewables projects placed in service in 2024, lower long-lived asset impairments in 2024, and prior year unrealized foreign currency losses at the Energy Infrastructure SBU. This was partially offset by lower earnings at the Energy Infrastructure SBU due to the end of commercial operations at Warrior Run.
Third quarter 2024 Adjusted Earnings Per Share6 (Adjusted EPS, a non-GAAP financial measure) was $0.71, an increase of $0.11, compared to third quarter 2023, mainly driven by a lower adjusted tax rate and higher contributions from renewables projects placed in service in 2024, partially offset by lower contributions from the Energy Infrastructure SBU.
Strategic Accomplishments
- The Company’s PPA backlog, which consists of projects with signed contracts, but which are not yet operational, is 12.7 GW, including 4.0 GW under construction. Since the Company’s second quarter 2024 earnings call in August 2024, the Company:
- Signed or was awarded 1.3 GW of long-term PPAs for new renewables, for a total of 3.5 GW in year-to-date 2024; and
- Completed the construction of 1.2 GW of solar, energy storage, wind and gas, and expects to add a total of 3.6 GW to its operating portfolio by year-end 2024.
- Since the Company’s second quarter 2024 earnings call in August 2024, the Company signed agreements with data center customers for an additional 900 MW of new load growth at AES Ohio, for a total of 2.1 GW in year-to-date 2024.
- In 2023 and year-to-date 2024, the Company has announced or closed nearly three-quarters of its $3.5 billion asset sale proceeds target through 2027.
- In September 2024, the Company agreed to sell a 30% indirect interest in AES Ohio to CDPQ for approximately $546 million.
- On October 31, 2024, the Company closed the sale of its 47.3% equity interest in AES Brasil for approximately $630 million, including sale and hedge proceeds.
Guidance and Expectations6,7
The Company is reaffirming its expectation that 2024 Adjusted EBITDA with Tax Attributes6,8 will come in the upper half of the range of $3,550 to $3,950 million, driven by new renewables.
The Company is reaffirming its 2024 guidance for Adjusted EBITDA6 of $2,600 to $2,900 million, but now expects to be towards the low end of the range, due to extreme weather in Colombia and lower margins in the Energy Infrastructure SBU. Results for the year will also be driven by significant asset sales closed in 2023 and 2024, partially offset by contributions from new renewables projects, improved margins in Chile, and rate base growth at US utilities.
The Company is reaffirming its expectation for annualized growth in Adjusted EBITDA9 of 5% to 7% through 2027, from a base of its 2023 guidance of $2,600 to $2,900 million.
The Company is reaffirming its expectation that 2024 Adjusted EPS10 will come in the upper half of its guidance range of $1.87 to $1.97. Growth in 2024 is expected to be primarily driven by new renewables commissionings, rate base growth at US utilities, and improved margins in Chile, but partially offset by asset sales and prior year margins on LNG transactions.
The Company is reaffirming its annualized growth target for Adjusted EPS10 of 7% to 9% through 2025, from a base year of 2020. The Company is also reaffirming its annualized growth target for Adjusted EPS9 of 7% to 9% through 2027, from a base of its 2023 guidance of $1.65 to $1.75.
The Company’s 2024 guidance is based on foreign currency and commodity forward curves as of September 30, 2024.
Non-GAAP Financial Measures
See Non-GAAP Measures for definitions of Adjusted EBITDA, Adjusted EBITDA with Tax Attributes, Tax Attributes, Adjusted Earnings Per Share, and Adjusted Pre-Tax Contribution, as well as reconciliations to the most comparable GAAP financial measures.
Attachments
Condensed Consolidated Statements of Operations, Segment Information, Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Cash Flows, Non-GAAP Financial Measures and Parent Financial Information.
Conference Call Information
AES will host a conference call on Friday, November 1, 2024 at 9:00 a.m. Eastern Time (ET). Interested parties may listen to the teleconference by dialing 1-833-470-1428 at least ten minutes before the start of the call. International callers should dial +1-404-975-4839. The Participant Access Code for this call is 132288. Internet access to the conference call and presentation materials will be available on the AES website at www.aes.com by selecting “Investors” and then “Presentations and Webcasts.”
A webcast replay will be accessible at www.aes.com beginning shortly after the completion of the call.
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AES Reports Third Quarter Financial Results – Completes 1,2 GW of Construction and Adds 2,2 GW of Renewables PPAs and Data Center Load Growth at US Utilities. source
