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Sep 30, 2023
AES Q3 2023 Earnings Report
Reported financial results for the quarter ended September 30, 2023.
Key Takeaways
AES had a strong third quarter, delivering on financial and strategic objectives. The company expects to complete construction of 3.5 GW of new renewables this year and has signed 3.7 GW of contracts for new renewables so far this year. They also expect to be in the top half of their Adjusted EPS guidance range for 2023 and are reaffirming all of their short- and long-term financial guidance metrics.
Signed new contracts for 3.7 GW of renewables in year-to-date 2023
On track to complete construction of 3.5 GW of renewables in 2023
Agreed to minority sell-downs of businesses in the Dominican Republic and Panama for $190 million in asset sale proceeds, securing full year 2023 asset sales target
Awarded up to $2.4 billion of grant funding by the US Department of Energy for two green hydrogen hubs with AES participation
AES
AES
Forward Guidance
The Company is reaffirming its 2023 guidance for Adjusted EBITDA of $2,600 to $2,900 million, and its expectation for annualized growth in Adjusted EBITDA of 3% to 5% through 2027, from a base of its reaffirmed 2023 guidance. Excluding the Company's Energy Infrastructure SBU, annualized growth in Adjusted EBITDA is expected to be 17% to 20% through 2027, from a base of 2023 guidance. The Company now expects full year 2023 Adjusted EPS to be in the top half of the guidance range of $1.65 to $1.75. The Company is reaffirming its annualized growth target for Adjusted EPS of 7% to 9% through 2025, from a base year of 2020. The Company is also reaffirming its annualized growth target for Adjusted EPS of 6% to 8% through 2027, from a base of its reaffirmed 2023 guidance of $1.65 to $1.75.
Positive Outlook
- Growth in 2023 is expected to be primarily driven by new renewables expected to come online.
- Reaffirming 2023 guidance for Adjusted EBITDA of $2,600 to $2,900 million.
- Reaffirming annualized growth target of 3% to 5% through 2027, from a base of its reaffirmed 2023 guidance.
- Reaffirming annualized growth target for Adjusted EPS of 7% to 9% through 2025, from a base year of 2020.
- Reaffirming annualized growth target for Adjusted EPS of 6% to 8% through 2027, from a base of its reaffirmed 2023 guidance of $1.65 to $1.75.
Challenges Ahead
- Growth is expected to be partially offset by lower margins from the Company's LNG business, due to normalization of LNG prices and the roll-off of a gas supply contract.
- Growth is expected to be partially offset by lower contract margins in Chile.
- Growth is expected to be partially offset by higher interest expense in Colombia.
- Lower contributions from LNG transactions versus 2022 at the Energy Infrastructure Strategic Business Unit (SBU).
- During the third quarter of 2023, the Company realized Tax Attributes of $18 million, a decrease of $42 million compared to third quarter 2022.