Auren Energia (AURE3) Q2 2024 earnings summary

Executive summary

• Announced and progressed a major business combination with AES Brasil, set to create Brazil's third largest power generator with 8.8 GW of 100% renewable installed capacity, pending regulatory approvals and expected to close in October 2024.

• Acquired Esfera Energia to expand the trading segment and enter the Power Energy Management segment.

• Launched GUD Energia joint venture with Vivo to operate in the retail segment.

• Sol de Jaíba project reached 360 MWAC installed, with full completion expected by September 2024.

• Wind generation up 15.9% year-over-year, with high operational availability and solar parks ramping up.

Financial highlights

• Adjusted EBITDA reached R$456.6 million in 2Q24, up 4.7% year-over-year, driven by higher dividends, solar park start-ups, and strong trading performance.

• Net revenue for Q2 2024 was R$1,450 million, up 0.9% year-over-year, mainly from solar and trading growth.

• Net profit dropped 50.2% YoY to R$91.1 million, mainly due to lower reversals of litigation provisions and reduced financial income.

• Net debt stood at R$3.3 billion, leverage ratio at 1.87x Adjusted EBITDA, reflecting new funding and higher cash reserves.

• Free cash flow was R$1,897.4 million, down 34.2% YoY, with a cash position of R$5.0 billion at quarter-end.

Outlook and guidance

• AES Brasil transaction expected to close in October 2024, with R$1.2 billion in identified synergies and integration plans underway.

• Sol de Jaíba solar complex to be fully operational by September 2024.

• High contracting level (94%) for 2024–2026 maintained, with gradual reduction in exposure for 2025–2027.