AES Sets Stage for Sustainable Growth with Resilient Business Model
The AES Corporation recently hosted a conference call to review its fourth quarter and full-year 2024 financial results, providing valuable insights into the company's performance and future outlook. During the call, President and Chief Executive Officer Andrés Gluski emphasized the significance of the company's renewable energy business in meeting growing electricity demand, particularly among technology customers.
Notably, AES signed 4.4 gigawatts of new power purchase agreements for renewables last year, putting it on track to achieve its goal of signing 14 to 17 gigawatts through 2025. The company is prioritizing contracts with the best risk-adjusted returns rather than simply maximizing growth in gigawatts.
AES also completed the construction or acquisition of 3 gigawatts of renewables and a 670-megawatt combined cycle gas plant in Panama, significantly increasing the utilization of its existing LNG terminal in that country. The company's ability to deliver renewable projects on time and within budget is a key competitive advantage, valued highly by its customers.
From a financial perspective, AES achieved adjusted EBITDA of $2.64 billion in 2024, despite being impacted by extreme weather-related events in Colombia and Brazil. This resulted in a combined loss of $200 million year-over-year for both businesses. However, the company generated parent free cash flow of $1.1 billion, which is at the midpoint of its guidance.
AES also reported a record adjusted EPS of $2.14, significantly above its guidance range and putting it well on track to achieve its annualized growth target of 7% to 9% from 2020 to 2025. The company's focus on improving organizational efficiency and continuing to operate some of its energy infrastructure assets will help strengthen its financial position and outlook.
As the company looks ahead to 2025, it expects to realize significant financial benefits from the maturing of its renewable business, including the addition of 6.6 gigawatts inaugurated in 2023 and 2024. AES's development business is becoming more efficient as well, allowing the company to reduce costs and capital requirements while focusing on the most profitable new projects.
AES's resilient business model and commitment to sustainable growth position it for long-term success. The company's ability to adapt to changing market conditions and capitalize on emerging trends will help drive its continued growth and expansion in the years ahead."
