Auren Energia (AURE3) Q2 2024 earnings summary

Executive summary

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

• Acquisition of Esfera Energia to strengthen the trading ecosystem and expand into Power Energy Management, with CADE approval and completion subject to remaining conditions.

• Launch of 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, solar parks ramping up, and high operational availability across assets.

Financial highlights

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

• Net revenue for 2Q24 was R$1,450.0 million, up 0.9% year-over-year, mainly from solar and trading growth.

• Net profit for 2Q24 was R$91.1 million, down 50.2% year-over-year, mainly due to lower reversals of litigation provisions and reduced financial income.

• Cash and cash equivalents increased to R$4,992.0 million as of June 30, 2024, supporting upcoming acquisitions.

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

Outlook and guidance

• Business combination with AES Brasil 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, construction on budget.

• High contracting level (94%) for 2024–2026 maintained as a natural hedge against price volatility, with gradual reduction in exposure for 2025–2027.