ALLETE (ALE) Q4 2023 earnings summary

Executive summary

• 2023 net income was $247.1M and diluted EPS was $4.30, up from $189.3M and $3.38 in 2022.

• The five-year capital plan increased to $4.345B, supporting transmission and clean-energy investment; annual EPS growth of 5%–7% is projected from 2025.

Financial highlights

• Operating revenue was $1,879.8M in 2023 versus $1,570.7M in 2022; operating income was $180.9M versus $134.2M.

• Q4 2023 net income was $51.5M versus $51.7M in Q4 2022; diluted EPS was $0.89 versus $0.90.

• 2023 earnings included a $40.5M after-tax arbitration gain, or $0.71 per share; weather impacts partly offset the gain.

Outlook and guidance

• 2024 diluted EPS guidance is $3.60–$3.90: Regulated Operations $2.65–$2.85 and Clean Energy, Corporate and Other $0.95–$1.05.

• Guidance assumes constructive regulatory outcomes and includes $64M of interim Minnesota Power rate-case rates, subject to refund.

• Clean Energy expects ~3.7M MWh of wind generation in 2024 with normal resources, versus 3.2M MWh in 2023; forecast includes ~$18M of production tax credits.

• 2024 assumptions include industrial sales of ~6.2M MWh, taconite production of ~35M tons, and a ~5% consolidated effective income tax expense.

• Growth of 5%–7% annually is projected from 2025 through 2028 and beyond; a nearby substation outage is expected to weigh on Clean Energy earnings into Q1 2024.