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• Adjusted EBITDA with tax attributes: $863 million

• Adjusted EBITDA: $635 million

• Adjusted EPS: $0.50

• 2024 Adjusted EBITDA with tax attributes guidance: $3.6 billion to $4 billion

• 2024 Adjusted EBITDA guidance: $2.6 billion to $2.9 billion

• 2024 Adjusted EPS guidance: $1.87 to $1.97

• New contract signings: 1.2 gigawatts since Q4 call

• Backlog of signed contracts: 12.7 gigawatts

• New projects added to operating portfolio: Almost 600 megawatts

• 2024 Parent capital allocation: $3 billion total discretionary cash

• Dividend: Approximately $500 million returned to shareholders

• New growth investment: Approximately $2.6 billion, 85% towards renewables and utilities

• Warning! GuruFocus has detected 9 Warning Signs with AES.

Release Date: May 03, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• The AES Corp (NYSE:AES) reported strong Q1 2024 results with adjusted EBITDA of $863 million and adjusted EPS of $0.50, demonstrating resilience to high interest rates and inflation.

• AES reaffirmed its 2024 guidance and growth rates through 2027, indicating confidence in continued strong performance.

• The company signed a significant 15-year contract with Amazon for the Bellefield project, providing 2 gigawatts of combined solar and storage, marking it as the largest solar-plus-storage project in the U.S.

• AES has nearly 6 gigawatts of long-term contracts with technology companies, positioning it as a major energy provider to data centers.

• The company's diversified and resilient supply chain has been a key differentiator, ensuring the availability of major equipment for projects in 2024 and 2025.

Negative Points

• Despite strong results, there are ongoing challenges with renewable resource variability in Panama and Brazil, impacting performance.

• The company faces potential risks from international tariffs, such as the antidumping compensating tariffs, which could affect future project costs and supply chain.

• AES's rapid growth in renewables requires substantial capital investment, which may pressure financial resources if not managed effectively.

• Transmission constraints and regulatory issues could potentially slow down the deployment of new projects and affect operational efficiency.

• While AES is expanding its utility investments, there is uncertainty about the sufficiency of current plans to meet potential large-scale demands from data centers and industrial growth.

Q & A Highlights

Q: Can you expand on your commentary about eliminating future planned equity issuance? Is that something we should view through this year, or is it more of a multiyear effort? A: Andres Ricardo Gluski Weilert, President, CEO & Director of The AES Corporation, explained that historically, AES has consistently exceeded its asset sale targets, which provides a strong foundation for the current year. He highlighted the sale of the Vietnam asset as a significant transaction awaiting government approval. Gluski emphasized AES's historical frugality with equity issuance, suggesting that depending on the progress of asset sales and growth programs, it might be possible to avoid additional equity issuance. He clarified that any potential equity issuance would not occur at current valuations and would likely be in the later years of their guidance period.