(AES, 27.Feb.2023) — The AES Corporation (NYSE: AES) today reported financial results for the year ended 31 December 2022.
“2022 was another record year for AES, one in which we delivered on all of our financial and strategic objectives. We continue to see massive growth in our renewables business, and in 2022, we signed more PPAs for solar, wind and energy storage than ever before in our history,” said Andrés Gluski, AES President and Chief Executive Officer. “Our unique capabilities in developing tailored energy solutions, such as our work with major data center companies to provide around-the-clock clean energy, enabled us to partner with Air Products to announce our plans for the largest green hydrogen production facilities in the United States.”
“I am extremely pleased with our financial and strategic performance in 2022,” said Stephen Coughlin, AES Executive Vice President and Chief Financial Officer. “While our 2023 guidance range is below our long-term growth rate, it does not include up to $0.10 of potential upside from 600 MW of new 2023 projects in the US that are currently expected to slip to 2024, but which we are still working to complete this year. If this upside is not realized in 2023, this timing change will benefit our 2024 results. We remain fully confident in our 7% to 9% long-term growth rate target1 through 2025.”
- Signed 5.2 GW of PPAs for new renewable energy projects in 2022, including 1.9 GW since the company’s third quarter earnings call in November, increasing backlog to 12.2 GW
- Completed the construction or acquisition of operating projects totaling 1.9 GW in 2022, including 1 GW of new renewables in the United States
- Announced partnership with Air Products to develop, build, own and operate the largest green hydrogen production facility in the United States
2022 Financial Highlights
- Diluted EPS of ($0.82), compared to ($0.62) in 2021
- Adjusted EPS1 of $1.67, compared to $1.52 in 2021 and 2022 guidance of $1.55 to $1.65
Financial Position and Outlook
- Targeting signing a total of 14 to 17 GW of new long-term renewables PPAs through 2025
- Expecting to complete 3.4 GW of new renewable energy projects in 2023, including 2.1 GW in the United States
- Initiating 2023 guidance for Adjusted EPS1 of $1.65 to $1.75, which includes the financial impact of 0.6 GW of new US renewable projects coming online in 2024, instead of 2023
- Reaffirming 7% to 9% annualized growth target1 through 2025, off a base year of 2020
Key Full Year 2022 Financial Results
Full year 2022 Diluted Earnings Per Share from Continuing Operations (Diluted EPS) was ($0.82), a decrease of $0.20 compared to full year 2021, primarily reflecting the gains on remeasurement of interest in sPower’s development platform and the Fluence capital raise in 2021, lower contributions from the company’s US & Utilities Strategic Business Unit (SBU), higher parent company interest expense, and lower capitalized interest at construction projects in Chile. This was partially offset by the loss in 2021 on deconsolidation of Alto Maipo and higher margins from the company’s Mexico, Central America and the Caribbean (MCAC) SBU due to favorable LNG transactions.
Full year 2022 Adjusted Earnings Per Share1 (Adjusted EPS, a non-GAAP financial measure) was $1.67, an increase of $0.15 compared to full year 2021, primarily reflecting higher margins from the company’s MCAC SBU, as well as higher margins and the company’s higher ownership in AES Andes. This was partially offset by outages and several one-time expenses at the company’s US & Utilities and South America SBUs, higher losses from Fluence, and higher parent company interest expense.
- In 2022, the company signed 5,153 MW of renewables and energy storage under long-term Power Purchase Agreements (PPA), including 2,553 MW of solar, wind and energy storage in the United States.
- Since the company’s third quarter 2022 earnings call on 4 November 2022, the company signed 1,934 MW of renewables and energy storage under long-term PPAs.
- In 2022, the Company completed the construction or acquisition of operating projects totaling 1,943 MW of wind, solar and energy storage in the United States, Brazil, the Dominican Republic, Chile and Colombia.
- The Company’s backlog, which includes projects with signed contracts, but which are not yet operational, is now 12,179 MW, including 5,453 MW under construction.
- The company announced a partnership with Air Products to develop, build, own and operate the largest green hydrogen production facility in the United States
- Includes approximately 1.4 GW of wind and solar generation, along with electrolyzer capacity capable of producing more than 200 metric tons per day (MT/D) of green hydrogen
Guidance and Expectations1
The company is reaffirming its 7% to 9% annualized growth rate target1 through 2025, from a base year of 2020.
The company is initiating 2023 guidance for Adjusted EPS1 of $1.65 to $1.75. Growth in 2023 is expected to be primarily driven by 3.4 GW of new renewables expected to come online. This growth is expected to be partially offset by lower margins from the company’s LNG business, due to normalization of LNG prices and the roll-off of a gas supply contract, lower contract margins in Chile, and higher interest expense in Colombia. This guidance also incorporates the impact of 0.6 GW of new renewables likely coming online in 2024, instead of 2023.
The company’s 2023 guidance is based on foreign currency and commodity forward curves as of 31 December 2022.