AES Brasil Energia (AESB3) Q2 2024 earnings summary

Executive summary

• Cajuína 2 wind complex (370 MW) and AGV VII (33 MW) advanced to near full operation, completing the final phase of portfolio expansion, with all turbines expected online by end of September.

• Wind asset turnaround increased average availability by 4.4 percentage points year-over-year, supporting higher generation.

• Wind generation surged 33% year-over-year in Q2, offsetting a 37% drop in hydro generation caused by adverse hydrological conditions.

• 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 progressing, with CADE approval received and closing expected in October 2024.

Financial highlights

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

• Adjusted EBITDA rose 7% year-over-year to BRL 373 million in Q2 2024.

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

• Operating cash flow was BRL 360 million for the quarter.

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

Outlook and guidance

• Cajuína 2 and Tucano wind complexes expected to be fully operational by end of Q3 2024.

• Portfolio expansion obligations with São Paulo fulfilled, with all construction works completed on time and on budget.

• Transmission upgrades in the Northeast and Southeast are expected to reduce curtailment and improve wind generation.

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

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