1. AES reported Q1 2025 results, reaffirming its 2025 guidance. 2. Net income fell to -$73 million, down from $278 million in Q1 2024. 3. Adjusted EBITDA decreased to $591 million, attributed to lower Energy Infrastructure revenues. 4. Strong performance in Renewables and Utilities segments mitigated some losses. 5. Company expects 5%-7% EBITDA growth through 2027, focusing on renewable projects.
Despite reaffirmation of guidance, declining net income and EBITDA may concern investors.
The article addresses significant financial performance metrics that investors monitor closely.
Gradual growth expected from renewables and utilities initiatives; however, short-term financial results are mixed.
ARLINGTON, Va., May 1, 2025 /PRNewswire/ -- The AES Corporation (NYSE: AES) today reported financial results for the quarter ended March 31, 2025.
"Our long-term contracted business model continues to demonstrate its resiliency to tariffs and economic policies, and we are reaffirming our 2025 guidance and long-term growth rate targets," said Andrés Gluski, AES President and Chief Executive Officer. "Our exposure to US import tariffs is de minimis, as we currently have all major equipment either on site, or contracted for domestic production, through 2027. We see demand from our key corporate customers as strong, especially among hyperscalers, where we are the global market leader."
"This quarter, we saw meaningful year-over-year growth in our Renewables and Utilities SBUs, directly attributable to new projects brought online and higher rate base investment," said Stephen Coughlin, AES Executive Vice President and Chief Financial Officer. "With the sale of a minority interest in our captive insurance company, AGIC, we have already achieved our full year 2025 asset sale proceeds target of $400 to $500 million."
First quarter 2025 Net Income decreased by $351 million, from Net Income of $278 million in first quarter 2024 to a Net Loss of $73 million. This decrease is the result of higher prior year revenues from the monetization of the Warrior Run coal plant PPA, one-time costs due to an organizational restructuring, and a gain in 2024 on dilution of the Company's interest in Uplight; partially offset by higher contributions from the Utilities and Renewables Strategic Business Units (SBU).
First quarter 2025 Adjusted EBITDA (a non-GAAP financial measure) was $591 million, a decrease of $49 million compared to first quarter 2024, driven by lower contributions from the Energy Infrastructure SBU primarily due to higher prior year revenues from the monetization of the Warrior Run coal plant PPA. This was partially offset by higher margins at the Utilities SBU and higher revenues from renewables projects placed in service.
First quarter 2025 Adjusted EBITDA with Tax Attributes was $777 million, a decrease of $91 million compared to first quarter 2024, primarily due to the drivers above, as well as lower realized tax attributes driven by timing of tax attribute recognition.
First quarter 2025 Diluted Earnings Per Share from Continuing Operations (Diluted EPS) was $0.07, a decrease of $0.53 compared to first quarter 2024, mainly driven by lower earnings at the Energy Infrastructure SBU primarily due to higher prior year revenues from the monetization of the Warrior Run coal plant PPA, lower realized tax attributes, a gain in the prior year on dilution of the Company's interest in Uplight, and one-time costs due to an organizational restructuring. This was partially offset by higher contributions at the Utilities SBU due to higher margins and realized tax attributes related to the Pike County energy storage project.
First quarter 2025 Adjusted Earnings Per Share (Adjusted EPS, a non-GAAP financial measure) was $0.27, a decrease of $0.23 compared to first quarter 2024, mainly driven by lower realized tax attributes due to timing of tax attribute recognition, and lower contributions at the Energy Infrastructure SBU primarily due to higher prior year revenues from the monetization of the Warrior Run coal plant PPA, partially offset by higher contributions at the Utilities SBU.
The Company is reaffirming its 2025 guidance for Adjusted EBITDA of $2,650 to $2,850 million. Growth in 2025 is expected to be driven by contributions from new renewables projects, rate base growth at the Company's US utilities, and normalized results in Colombia and Mexico, partially offset by revenues from the monetization of the Warrior Run coal plant PPA in 2024 and asset sales.
The Company is reaffirming its expectation for annualized growth in Adjusted EBITDA of 5% to 7% through 2027, from a base of its 2023 guidance of $2,600 to $2,900 million.
The Company is reaffirming its expectation that 2025 Adjusted EBITDA with Tax Attributes of $3,950 to $4,350 million.
The Company is reaffirming its 2025 Adjusted EPS guidance of $2.10 to $2.26. Growth in 2025 is expected to be primarily driven by contributions from new renewables projects, rate base growth at the Company's US utilities, and normalized results in Colombia and Mexico, partially offset by revenues from the monetization of the Warrior Run coal plant PPA in 2024, asset sales, higher Parent interest, and a higher adjusted tax rate.
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 7% to 9% through 2027, from a base of its 2023 guidance of $1.65 to $1.75.
The Company's 2025 guidance is based on foreign currency and commodity forward curves as of March 31, 2025.
The Company expects to maintain its current quarterly dividend payment of $0.17595 going forward.
See Non-GAAP Measures for definitions of Adjusted EBITDA, Adjusted EBITDA with Tax Attributes, Tax Attributes, Adjusted Earnings Per Share, and Adjusted Pre-Tax Contribution, as well as reconciliations to the most comparable GAAP financial measures.
AES will host a conference call on Friday, May 2, 2025 at 10:00 a.m. Eastern Time (ET). Interested parties may listen to the teleconference by dialing 1-833-470-1428 at least ten minutes before the start of the call. International callers should dial +1-404-975-4839. The Participant Access Code for this call is 861065. 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 "Presentations and Webcasts."
A webcast replay will be accessible at www.aes.com beginning shortly after the completion of the call.
The AES Corporation (NYSE: AES) is a Fortune 500 global energy 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.
This news release contains forward-looking statements within the meaning of the Securities Act of 1933 and of the Securities Exchange Act of 1934. Such forward-looking statements include, but are not limited to, those related to future earnings, growth and financial and operating performance. Forward-looking statements are not intended to be a guarantee of future results, but instead constitute AES' current expectations based on reasonable assumptions.
Susan Harcourt
703-682-1204, Investor@aes.com
Amy Ackerman
703-682-6399, Media@aes.com
SOURCE The AES Corporation