The AES Corporation (AES) Q3 2024 earnings summary

Executive summary

• Q3 2024 results were generally in line with expectations, with robust growth in renewables and U.S. utilities, despite weather-related headwinds in South America and lower Energy Infrastructure margins.

• Adjusted EBITDA with tax attributes reached $1.17 billion, Adjusted EBITDA was $692 million, and Adjusted EPS was $0.71, all up year-over-year, driven by new renewables projects and higher contributions from U.S. utilities.

• Net income for Q3 2024 was $210 million, down year-over-year, while net income attributable to AES rose to $502 million, reflecting renewables growth and lower impairments.

• Over 2.2 GW of new contracts were signed or awarded, including long-term renewables PPAs and significant data center load growth agreements.

• Nearly three-quarters of the $3.5 billion asset sale target through 2027 has been announced or closed, including the sale of 30% of AES Ohio to CDPQ and 47.3% of AES Brasil.

Financial highlights

• Q3 2024 Adjusted EBITDA with tax attributes: $1.17 billion (up from $1.01 billion); Adjusted EBITDA: $692 million (down from $990 million); Adjusted EPS: $0.71 (up from $0.60); Diluted EPS: $0.72 (up from $0.32).

• Q3 2024 revenue was $3.29 billion, down 4% year-over-year, mainly due to lower Energy Infrastructure contributions.

• Net income attributable to AES was $502 million in Q3 2024, up from $231 million in Q3 2023.

• Operating margin for Q3 2024 was $722 million, down from $918 million in Q3 2023.

• Operating cash flow for the nine months was $1.66 billion, down $645 million year-over-year, mainly due to working capital changes.

Outlook and guidance

• 2024 Adjusted EPS guidance reaffirmed at $1.87–$1.97, expecting to be in the upper half of the range.

• 2024 Adjusted EBITDA with tax attributes guidance: $3.55–$3.95 billion, expecting to be in the upper half; Adjusted EBITDA (excluding tax attributes) expected toward the low end of $2.6–$2.9 billion due to weather and margin pressures.

• On track to add 3.6 GW of new projects in 2024 and sign 14–17 GW of new renewables PPAs from 2023–2025, with 9.1 GW signed or awarded to date.

• Annualized Adjusted EPS growth target of 7%–9% and Adjusted EBITDA growth target of 5%–7% through 2027.

• All necessary solar panels for projects through 2026 are secured or contracted, with the majority of 2025–2026 panels expected in the US by November.