AES Achieves Key Strategic Milestones

(AES, 6.May.2021) — AES Corporation (NYSE: AES) reported financial results for the quarter ended 31 March 2021.

Strategic Accomplishments

  • Signed 1,088 MW of new PPAs for renewables and energy storage, including a 10-year supply agreement with Google for 500 MW of 24/7 carbon-free energy in Virginia
  • Secured a 20-year agreement for 34 TBTU of excess LNG throughput capacity in Central America
  • Fluence maintained its global lead in the energy storage market and signed an agreement with Northvolt to co-develop next-generation battery technology

Q1 2021 Financial Highlights

  • Diluted EPS of ($0.22), compared to $0.22 in Q1 2020, primarily reflecting higher impairments of $0.45
  • Adjusted EPS1 of $0.28, compared to $0.29 in Q1 2020

Financial Position and Outlook

  • Reaffirming 2021 Adjusted EPS1 guidance range of $1.50 to $1.58
  • Reaffirming 7% to 9% average annual growth target through 2025

“We continue to see an incredible opportunity for growth, spurred by the transformation of the electricity sector and we have taken decisive action to position ourselves as a leader in this transition.  This week, we announced a 10-year agreement with Google to provide 24/7 carbon-free energy, designed to match the load of their data centers in Virginia.  This unique product sets a new standard in renewable procurement for commercial and industrial customers, who signed 23 GW of contracts for renewables in 2020,” said Andrés Gluski, AES President and Chief Executive Officer.  “We are also well on our way to achieving our annual goal of signing 4 GW of new renewables under long-term contracts, with 1,088 MW already secured year-to-date.  Additionally, we secured a 20-year tolling agreement for more than 40% of our excess LNG terminal capacity in Central America.”

“With our first quarter results we are well on our way toward achieving our full year 2021 guidance.  Accordingly, we are also reaffirming our 7% to 9% average annual growth target through 2025,” said Gustavo Pimenta, AES Executive Vice President and Chief Financial Officer.  “We successfully raised $1 billion in equity units, which will fund our attractive growth opportunities, while maintaining strong credit metrics.”

Key Q1 2021 Financial Results

First quarter 2021 Diluted Earnings Per Share from Continuing Operations (Diluted EPS) was ($0.22), a decrease of $0.44 compared to first quarter 2020, primarily reflecting $0.45 of increased impairment expense.  This impact is largely associated with AES Puerto Rico, which now has a shorter than previously expected useful life, primarily as a result of new and proposed regulations and the Company’s decarbonization strategy.

First quarter 2021 Adjusted Earnings Per Share1 (Adjusted EPS, a non-GAAP financial measure) was $0.28, a decrease of $0.01 compared to first quarter 2020, primarily reflecting a higher effective tax rate. 

Detailed Strategic Overview

AES is leading the industry’s transition to clean energy by investing in sustainable growth and innovative solutions. The company is taking advantage of favorable trends in clean power generation, transmission and distribution, and LNG infrastructure to deliver superior results.

Through its presence in key growth markets, AES is well positioned to benefit from the global transition toward a more sustainable power generation mix.

  • In year-to-date 2021, the company signed 1,088 MW of renewables and energy storage acquired or signed under long-term Power Purchase Agreements (PPA):
    • 459 MW of solar, 359 MW of wind, 35 MW of energy storage, and 24 MW of hydro in the United States; and
    • 211 MW of wind in Brazil.
  • The company’s backlog of 6,926 MW of renewables now includes:
    • 2,570 MW under construction and expected to come on-line through 2024; and
    • 4,356 MW signed under long-term PPAs, including a 10-year agreement to supply Google’s data centers in Virginia with 500 MW of 24/7 carbon-free energy.
  • The company secured a 20-year agreement for 34 TBTU of excess throughput LNG capacity in Central America, and expects to contract the remaining 45 TBTU in the near future.

The company is developing and deploying innovative solutions such as battery-based energy storage, digital customer interfaces and energy management.

  • Fluence, the company’s joint venture with Siemens, is the global leader in the fast-growing energy storage market, which is expected to increase by 40% annually.
    • In April, Fluence agreed to partner with Northvolt, the leading European battery developer and manufacturer, to develop sustainable, next-generation battery systems for grid-scale energy storage, to lower total cost of ownership and improve functionality.

Guidance and Expectations1

The company is reaffirming its 2021 Adjusted EPS1 guidance of $1.50 to $1.58 and its 7% to 9% average annual growth rate target through 2025, from a base year of 2020.

NOTE 1: Adjusted EPS is a non-GAAP financial measure.  See attached “Non-GAAP Measures” for definition of Adjusted EPS and a description of the adjustments to reconcile Adjusted EPS to Diluted EPS for the quarter ended 31 March 2021.  The company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EPS guidance without unreasonable effort.