AES Gets Investment Grade Rating, Reaffirms 2022 Adj. EPS Guidance

(AES, 5.May.2022) — The AES Corporation (NYSE: AES) reported financial results for the quarter ended 31 March 2022.

Strategic Accomplishments

  • With investment grade credit rating from Moody’s, attained investment grade ratings from all three major ratings agencies
  • Signed or awarded 1.1 GW of PPAs for new renewable energy projects in the first quarter of 2022, increasing the backlog to 10.3 GW
  • Construction on schedule for more than 2 GW of renewable energy projects expected to come online in 2022, with solar panels secured for all projects in the US

Q1 2022 Financial Highlights

  • Diluted EPS of $0.16, compared to ($0.22) in Q1 2021
  • Adjusted EPS1 of $0.21, compared to $0.28 in Q1 2021

Financial Position and Outlook

  • Reaffirming 2022 Adjusted EPS1 guidance range of $1.55 to $1.65
  • Reaffirming 7% to 9% annualized growth target through 2025, off a base year of 2020

“So far this year, we have attained a third investment grade rating and maintained our strategic momentum from last year by growing our backlog of contracted projects to 10.3 GW.  We expect to complete all of these projects through 2025 and they will be a key contributor to our expected annualized growth of 7% to 9%,” said Andrés Gluski, AES President and Chief Executive Officer.  “In spite of supply chain issues impacting many sectors, we have secured solar panels for all of our projects in the US this year and currently expect no delays in their planned commissionings.”

“Our resilient business model, which is centered around long-term contracted generation and utilities, continues to insulate us from macroeconomic headwinds such as inflation and interest rate fluctuations,” said Stephen Coughlin, AES Executive Vice President and Chief Financial Officer.  “As in prior years, we expect the bulk of our earnings will be generated in the second half of the year and we remain on track to achieve our full year Adjusted EPS guidance of $1.55 to $1.65.”

Q1 2022 Financial Results

First quarter 2022 Diluted Earnings Per Share from Continuing Operations (Diluted EPS) was $0.16, an increase of $0.38 compared to first quarter 2021, primarily reflecting lower impairments, partially offset by net gains in 2021 from early contract terminations at Angamos, higher income tax expense, the impact of realized gains on de-designated interest rate swaps in 2021, and the gain on remeasurement of the company’s interest in sPower’s development platform in 2021.

First quarter 2022 Adjusted Earnings Per Share1 (Adjusted EPS, a non-GAAP financial measure) was $0.21, a decrease of $0.07 compared to first quarter 2021, primarily reflecting the impact of realized gains on de-designated interest rate swaps in 2021 and lower contributions from the company’s Mexico, Central America and the Caribbean (MCAC) Strategic Business Unit (SBU), partially offset by higher contributions from the South America SBU.

Strategic Accomplishments

  • In the first quarter of 2022, the company signed or was awarded 1,087 MW of renewables and energy storage under long-term Power Purchase Agreements (PPA), primarily including 1,019 MW of solar and energy storage in the US.
  • The company’s backlog is now 10,307 MW expected to be completed through 2025, including:
    • 3,735 MW under construction; and
    • 6,572 MW of renewable energy projects signed under long-term PPAs.

Guidance and Expectations1

The company is reaffirming its 2022 Adjusted EPS1 guidance of $1.55 to $1.65 and its 7% to 9% annualized growth rate target through 2025, from a base year of 2020.

1Adjusted 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 March 31, 2022.  The Company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EPS guidance without unreasonable effort.

Non-GAAP Financial Measures

See Non-GAAP Measures for definitions of 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, 6 May 2022 at 10:00 a.m. Eastern Time (ET).  Interested parties may listen to the teleconference by dialing 1-844-200-6205 at least ten minutes before the start of the call. International callers should dial +1-929-526-1599.  The Participant Access Code for this call is 606102.  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, as well as a replay in downloadable MP3 format, will be accessible at www.aes.com beginning shortly after the completion of the call.

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