AES Brasil Energia (AESB3) Q2 2024 earnings summary

Executive summary

• Cajuína 2 Wind Complex is nearly fully operational, with all turbines expected online by end of September 2024, and AGV VII completed ahead of schedule, marking the final phase of portfolio expansion.

• Wind asset turnaround increased average availability by 4.4 percentage points year-over-year, supporting a 33% increase in wind generation.

• Net margin reached BRL 558 million in Q2 2024, up 8% year-over-year, with adjusted EBITDA of BRL 373 million.

• Business combination with Auren Energia S.A. approved by antitrust authority, with closing expected in October 2024.

• Net revenue rose 14.3% year-over-year to BRL 871.9 million in Q2 2024, driven by wind asset ramp-up and new PPAs.

Financial highlights

• Net margin increased by 8% year-over-year to BRL 558 million, driven by wind growth.

• Adjusted EBITDA for Q2 2024 was BRL 373 million, up 7% year-over-year; year-to-date adjusted EBITDA was BRL 741 million.

• Adjusted net loss of BRL 104 million in Q2, impacted by higher financial expenses and depreciation.

• Operational cash flow was BRL 360 million, with a cash balance of BRL 2.8 billion at quarter-end.

• Portfolio contracting level and average sales price increased, with average price rising from BRL 185/MWh to BRL 206/MWh.

Outlook and guidance

• Cajuína 2 expected to be fully operational by end of September 2024.

• Transmission upgrades in Bahia, Sergipe, and Ceará expected to reduce wind curtailment starting August.

• Business combination with Auren Energia S.A. anticipated to close in October 2024, with expected operational synergies.

• Company strategy focuses on contracting hydro portfolio up to expected GSF, maintaining high contracting levels.

• Management notes projections are subject to market, economic, and sector changes.