The AES Corporation (AES) Q3 2024 earnings summary

Executive summary

• Q3 2024 Adjusted EBITDA with Tax Attributes rose to $1.17B, driven by renewables growth, while Adjusted EPS increased to $0.71, with strong contributions from new projects and contract wins, despite severe drought in South America and lower Energy Infrastructure margins.

• Net income for Q3 2024 was $210M, down year-over-year, but net income attributable to AES rose to $502M, reflecting higher renewables output and lower impairments.

• The company reaffirmed 2024 guidance, expecting to be in the upper half of Adjusted EPS and Adjusted EBITDA with Tax Attributes ranges, and is ahead on asset sales targets.

• Signed or awarded 2.2 GW of new contracts, including 1.3 GW of renewables PPAs and 900 MW of new data center load at AES Ohio; completed 1.2 GW of construction in Q3, on track for 3.6 GW in 2024.

• Strategic partnership with CDPQ for AES Ohio and sale of 47.3% equity in AES Brasil for $630M, eliminating Brazilian weather, interest rate, and currency risks.

Financial highlights

• Q3 2024 Adjusted EBITDA with Tax Attributes: $1.17B (up from $1.01B in Q3 2023); Adjusted EBITDA: $692M (down from $990M); Adjusted EPS: $0.71 (up from $0.60); Diluted EPS: $0.72 (up from $0.32).

• Q3 2024 revenue: $3.29B, down from $3.43B in Q3 2023, mainly due to a $238M drop at Energy Infrastructure.

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

• Year-to-date 2024 Adjusted EBITDA with Tax Attributes: $2.87B (up from $2.26B YTD 2023); Adjusted EPS: $1.60 (up from $1.03 YTD 2023).

• Q3 2024 operating margin: $722M, down from $918M in Q3 2023.

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: $3.55B–$3.95B, expecting upper half; Adjusted EBITDA guidance: $2.6B–$2.9B, expecting lower end due to weather and margin pressures.

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

• 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.

• Strong growth anticipated in renewables and utilities for 2025, with normalization expected in South America and significant new capacity coming online.