(AES, 1.Aug.2024) — The AES Corporation reported financial results for the quarter ended June 30, 2024.
“AES had another strong quarter, extending our leadership in supplying renewable energy solutions to data centers, and we are on track to meet all of our strategic and financial objectives,” said Andrés Gluski, AES President and Chief Executive Officer. “Since our last call, we signed 2.2 GW of new agreements with data center hyperscalers, and our backlog of signed Power Purchase Agreements is now 12.6 GW, the majority of which will be completed by 2027. AES’ continued success in meeting the clean energy needs of its key corporate customers makes our business model highly resilient and ensures strong growth for years to come.”
“I’m very excited about AES’ continued success in the second quarter. Our construction program is solidly on track, we signed record sales with data centers, and our year-to-date Adjusted EPS more than doubled compared to last year,” said Stephen Coughlin, AES Executive Vice President and Chief Financial Officer. “As a result of our strong performance year-to-date and our outlook for the remainder of the year, we now expect our 2024 Adjusted EBITDA with Tax Attributes and Adjusted EPS to be in the upper half of our ranges.”
Q2 2024 Financial Results
Second quarter 2024 Net Loss was $39mn, an increase of $20mn compared to second quarter 2023. This increase is the result of losses at commencement of sales-type leases at the Renewables Strategic Business Unit (SBU), partially offset by favorable contributions at the Utilities and Energy Infrastructure SBUs and higher contributions from renewables projects placed in service in the current year.
Second quarter 2024 Adjusted EBITDA4 (a non-GAAP financial measure) was $652mn, an increase of $83mn compared to second quarter 2023, primarily driven by higher contributions at the Utilities SBU, higher revenues under a Power Purchase Agreement (PPA) termination agreement at the Energy Infrastructure SBU, and higher revenues from new projects at the Renewables SBU; partially offset by higher outages at the Energy Infrastructure SBU, and outages in Colombia at the Renewables SBU.
Adjusted EBITDA with Tax Attributes4,5 was $843mn, an increase of $236mn compared to second quarter 2023, primarily due to higher realized tax attributes driven by more renewables projects placed in service, and the drivers above.
Second quarter 2024 Diluted Earnings Per Share from Continuing Operations (Diluted EPS) was $0.27, an increase of $0.33 compared to second quarter 2023, primarily reflecting higher contributions from renewables projects placed in service in the current year, prior year unrealized foreign currency losses at the Energy Infrastructure SBU, and higher margins at the Utilities and Energy Infrastructure SBUs; partially offset by losses at commencement of sales-type leases at the Renewables SBU.
Second quarter 2024 Adjusted Earnings Per Share6 (Adjusted EPS, a non-GAAP financial measure) was $0.38, an increase of $0.17, compared to second quarter 2023, mainly driven by a lower adjusted tax rate, higher contributions from the Utilities SBU, and higher contributions from renewables projects placed in service in the current year.
Strategic Accomplishments
- The Company has now signed 8.1 GW of agreements directly with technology customers, including through transmission and distribution, renewables PPAs and retail supply. Since the company’s first quarter 2024 earnings call in May 2024, the company signed 2.2 GW of agreements, including:
- 1.2 GW of new data center load at US utilities, which should benefit rate base growth, but is not included in the company’s PPA backlog;
- 15-year PPAs for 727 MW of wind and solar to serve data center growth in Texas; and
- A 310 MW retail supply agreement to support data centers throughout Ohio, which is not included in the company’s PPA backlog.
- The company’s PPA backlog, which consists of projects with signed contracts, but which are not yet operational, is 12.6 GW, including 5.1 GW under construction. Since the company’s first quarter 2024 earnings call in May 2024, the company:
- Signed 1 GW of long-term PPAs for new renewables, including the acquisition of a 170 MW solar-plus-storage development project that will be added to AES Indiana’s rate base.
- Completed the construction or acquisition of 976 MW of wind, solar and energy storage and expects to add a total of 3.6 GW to its operating portfolio by year-end 2024.
Guidance and Expectations6,7
The company now expects 2024 Adjusted EBITDA with Tax Attributes6,8 to be in the upper half of the range of $3,550mn to $3,950mn, driven by new renewables.
The company is reaffirming its 2024 guidance for Adjusted EBITDA6 of $2,600mn to $2,900mn. Results are expected to be driven by the impacts from significant asset sales closed in 2023 and expected to close in 2024, as well as prior year margins earned on LNG transactions, partially offset by contributions from new renewables projects, improved margins in Chile, rate base growth at US utilities.
The Company is reaffirming its expectation for annualized growth in Adjusted EBITDA6 of 5% to 7% through 2027, from a base of its 2023 guidance of $2,600mn to $2,900mn.
The Company now expects 2024 Adjusted EPS9 to be 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 EPS9 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 30 June 2024.
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| 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 June 30, 2024. The Company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EPS guidance without unreasonable effort. |
| 2 | Adjusted EBITDA is a non-GAAP financial measure. See attached “Non-GAAP Measures” for definition of Adjusted EBITDA and a description of the adjustments to reconcile Adjusted EBITDA to Net Income (Loss) for the quarter ended June 30, 2024. The Company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EBITDA guidance without unreasonable effort. |
| 3 | Pre-tax effect of Production Tax Credits, Investment Tax Credits, and depreciation tax deductions allocated to tax equity investors, as well as the tax benefit recorded from tax credits retained or transferred to third parties. |
| 4 | Adjusted EBITDA is a non-GAAP financial measure. See attached “Non-GAAP Measures” for definition of Adjusted EBITDA and a description of the adjustments to reconcile Adjusted EBITDA to Net Income for the quarter ended June 30, 2024. The Company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EBITDA guidance without unreasonable effort. |
| 5 | Pre-tax effect of Production Tax Credits, Investment Tax Credits, and depreciation tax deductions allocated to tax equity investors, as well as the tax benefit recorded from tax credits retained or transferred to third parties. |
| 6 | Adjusted EBITDA is a non-GAAP financial measure. See attached “Non-GAAP Measures” for definition of Adjusted EBITDA and a description of the adjustments to reconcile Adjusted EBITDA to Net Income for the quarter ended June 30, 2024. The Company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EBITDA guidance without unreasonable effort. |
| 7 | 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 June 30, 2024. The Company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EPS guidance without unreasonable effort. |
| 8 | Pre-tax effect of Production Tax Credits, Investment Tax Credits, and depreciation tax deductions allocated to tax equity investors, as well as the tax benefit recorded from tax credits retained or transferred to third parties. |
| 9 | 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 June 30, 2024. The Company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EPS guidance without unreasonable effort. |
