Q2 2021 Financial Highlights
Financial Position and Outlook
The AES Corporation reported financial results for the quarter ended June 30, 2021.
“I am very pleased with our results for the first half of 2021,” said Andrés Gluski, AES President and Chief Executive Officer. “We are on track to hit all of our financial and growth metrics for the year. Since our last earnings call in May, we signed 1.8 GW of renewables PPAs, more than 90% of which are in the US, for a total of 2.9 GW year-to-date, nearly double the amount we did in the same period last year. This puts our total backlog of signed projects at 8.5 GW, an all-time high. We see demand for renewables as very strong, especially for our structured around-the-clock carbon-free products. At the same time, we continue to make good progress on our decarbonization targets by also accelerating the retirement of coal plants and growing our energy efficiency and cloud-based businesses.”
“Our financial performance for the first half of the year, combined with a positive outlook for the remainder of the year and beyond, lead us to reaffirm our full year 2021 guidance and our 7% to 9% average annual growth target in earnings and free cash flow through 2025,” said Gustavo Pimenta, AES Executive Vice President and Chief Financial Officer. “We are also excited to see Moody’s changing AES’ outlook on our Ba1 rating to positive, further validating the continuous improvement in our credit profile.”
Key Q2 2021 Financial Results
Second quarter 2021 Diluted Earnings Per Share from Continuing Operations (Diluted EPS) was $0.03, an increase of $0.16 compared to second quarter 2020, primarily reflecting higher operating performance at the Company’s US & Utilities Strategic Business Unit (SBU), gains from dispositions and acquisitions, and gains from early contract terminations in Chile. These positive drivers were partially offset by higher impairments, primarily at AES Andes in Chile, associated with the commitment to retire certain coal-fired plants.
Second quarter 2021 Adjusted Earnings Per Share1 (Adjusted EPS, a non-GAAP financial measure) was $0.31, an increase of $0.06 compared to second quarter 2020, primarily reflecting contributions from new businesses, including renewables and the Southland repowering, higher demand at utilities, and Parent interest savings. These positive drivers were partially offset by lower contributions from Chile and a higher adjusted tax rate.
Detailed Strategic Overview
AES is leading the industry’s transition to clean energy by investing in sustainable growth and innovative solutions. The Company is taking advantage of favorable trends in clean power generation, transmission and distribution, and LNG infrastructure to deliver superior results.
Through its presence in key growth markets, AES is well positioned to benefit from the global transition toward a more sustainable power generation mix.
Update on Fluence
AES with its partners, Siemens and Qatar Investment Authority (QIA), is considering strategic options for Fluence to raise additional capital to finance its continued growth, which may include a public offering of its common shares.
Guidance and Expectations1
The Company is reaffirming its 2021 Adjusted EPS1 guidance of $1.50 to $1.58 and its 7% to 9% average annual growth rate target through 2025, from a base year of 2020.
Adjusted EPS is a non-GAAP financial measure. See attached “Non-GAAP Measures” for definition of Adjusted EPS and a description of the adjustments to reconcile Adjusted EPS to Diluted EPS for the quarter ended June 30, 2021. The Company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EPS guidance without unreasonable effort.
Non-GAAP Financial Measures
See Non-GAAP Measures for definitions of Adjusted Earnings Per Share and Adjusted Pre-Tax Contribution, as well as reconciliations to the most comparable GAAP financial measures.
Condensed Consolidated Statements of Operations, Segment Information, Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Cash Flows, Non-GAAP Financial Measures and Parent Financial Information.
Conference Call Information
AES will host a conference call on Thursday, August 5, 2021 at 9:00 a.m. Eastern Daylight Time (EDT). Interested parties may listen to the teleconference by dialing 1-888-317-6003 at least ten minutes before the start of the call. International callers should dial +1-412-317-6061. The Conference ID for this call is 0382752. Internet access to the conference call and presentation materials will be available on the AES website at www.aes.com by selecting “Investors” and then “Upcoming events.”
A webcast replay, as well as a replay in downloadable MP3 format, will be accessible at www.aes.com beginning shortly after the completion of the call.
The AES Corporation is a Fortune 500 global power company accelerating the future of energy. Together with our many stakeholders, we’re improving lives by delivering the greener, smarter energy solutions the world needs. Our diverse workforce is committed to continuous innovation and operational excellence, while partnering with our customers on their strategic energy transitions and continuing to meet their energy needs today. For more information, visit www.aes.com.