AES - Earnings call transcript Q2 2022

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the AES Corporation Second Quarter 2022 Financial Review Call. My name is Irene, and I will be coordinating this event. [Operator Instructions] I would like to turn the conference over to our host Susan Harcourt, Vice President of Investor Relations. Susan, please go ahead.

Susan Harcourt

operator. you Thank welcome call. and second XXXX quarter Good to review financial morning our

presentation. Our information making from along related be Reconciliations our and materially may recent press presentation and release between to results and these financial non-GAAP are factors discussed aes.com. differ we cause future There website Today, with found are filed will statements. be XX-Q financial most forward-looking many which that at on our are can on GAAP website our with the statements, measures in XX-K the SEC. available

our Joining our and me to this other management morning are Officer; will Financial that, Executive Andrés senior Coughlin, over Gluski, turn Steve With of call our President team. Andrés. Officer; and members Chief Chief I the

Andrés Gluski

and our Good review thank XXXX financial joining you quarter for call. second morning everyone

have quarter second line with As earnings we our was adjusted our profile. EPS from our expectations you release, in $X.XX, and consistent which quarterly with earnings reported seen historical of

the This it two will potential energy development as in US our which Steve cash and US. CFO, the year, broad note on morning we for XXXX of to that and growth legislation, financial half accelerate Coughlin upside in the for climate drive more and see for second not expectation of through in are proposed would meaningful discuss hydrogen X% do of free from the adjusted in Our reaffirming expectations themes. our a I source year-to-date benefit I projects our results guidance parent also and strategy and our of our we detail. flow annualized any include additional the outlook Based context of will discuss and storage X% EPS as results XXXX. guidance green renewables would our demand

review also corporate ability currency and for disciplined with in both hit and our First, full high from to high this which the and With backdrop renewables, of strong robustness in second, industrial this I our X. continued demand our supply will our provide foreign commodity financial prices, to on volatility constraints; macroeconomic goals ongoing growth, particularly in and mind, inflation, resilience resilience our fluctuations including customers. Beginning with approach chain slide to beyond. and our of us and strategic year business confidence discuss

As a prices. depreciating XX factors these results any inflation, impact to year our last this over the years, on were from result the volatile not of and insulated transformation of We have of dollar our any financial the of quarter our commodity impacts full expect do portfolio rising US results.

discussed our As for I contribution pretax calls, regulated contracts generation of on our long-term is utilities. have and previous derived from XX% adjusted

is earnings California Southland our For not the that that in derived is cases such largely the LNG to both conditions. the remainder international year upside. additional we agreements Panama benefits of through agreements will customers. next on redirect depending signed from XX% the XX% business not of sign for these The exposures. hedged utilities, have of dollars, legacy from excess as have In contractual have to Throughout allowed we or arrangements market in similar to denominated our year strong US contracts long-term potential have our some or we accrue agreements XXXX, the and

Turning chains Slide to and supply construction X. on

and with year. to have cancellations suppliers advantages quickly a recently, in no earlier with on resume working XX.X gigawatt June of the and all worked to customs proactive result, been execute and we strategic our sourcing executive our significant we Biden to changes. we of our this the complete suppliers' expect year. of XXXX this as had ability following order projects panels our a our our to projects for country and approach all imports commitments required Administration's none We stopped Our panels key the or competitive take More backlog by solar in

manufacturing. drive challenges, that committed further decrease the In steps US other the of supply significantly to panels solar and Consortium supply seven billion to along solar than made up in X.X developers major no two chain. Solar impact to decisive XXXX the Buyer this of despite expansion XXXX renewables result risk modules only and by by of been our from expectations launched guidance US to delays a of our as note $X took any domestic more to year also for Collectively, solar changes per with solar we We we of manufacturers do starting have purchasing anticipate next. chain Therefore, creating can requested industry-wide from that panel gigawatts year or on projects to these were three moved not with backlog shifted robust we customers gigawatts. a USA XXXX. solar June, more for supply US would supply I

solar recently largest more development under storage project the scale we Across than have under addition, Hawaii. we construction ground else. plus anyone of states, on the projects the broke utility In state and/or renewable in

XXXX. X.X can globally X.X year, renewables by you total gigawatts Slide this of on X, As X.X see gigawatts next a year of gigawatts we anticipate completing the end for new of

to X. Turning Slide

future our to growth. Looking

our energy for of and greater the increase renewable far from chain customer price continue cost renewables made Despite the We fuels demand supply even in fossil inflation key a more groups. constraints, to competitive. has resulting of strong in renewables see increases from cost

higher. demand a has been from customers result, As never corporate

basis. So or been a X.X awarded the far PPAs, this long-term bilateral which of on have been signed have of renewable year, gigawatts we negotiated majority

reach For gigawatts. to total full X.X to to gigawatts expect of year X.X we a XXXX, continue

X, come Slide all expected gigawatts online which a we XXXX. have of XX.X of on is now to shown backlog As through

note have operations. Turning to like that gigawatts Slide X. to renewables I'd of and XX.X currently we

to will XX% almost will PPAs, XX% gigawatts renewables. by of backlog our in to Including in expect sign installed of than this our construction capacity next more which we PPAs signed portfolio be with the represent years. So XX over projects four renewable XXXX, or growth additional grow

expect We that exited also have to coal completely time. at

solutions innovative as up this require in in AES we recognized scale Fast the which XX continue best winner in to week, in Company best Earlier for the and Career their workplaces portfolio workplaces to best on Innovators for Early complement category rankings As renewables, and commitments. talent Innovator. deliver top our we our businesses of order with the of

We many this teams are proud receiving their innovative of and and very recognition accomplishments. our

to will fueling to the coming the significant X.X-megawatt the one will have In provide growth. to specific integration we renewable and and new produce up include I additional make in Chile. of of provide don't day. hydrogen to a we hydrogen meantime, pilot sources in the we the in two updates any progress These US although metric ton green be good will make hydrogen projects station project of Additionally, large project Chile. electrolyzers today, per our on This months. and a continue announcements potential and have launched green projects

Finally increasing turning growth utilities US and to earnings of the to our overall XX%. X% objective of our opportunities advances Slide flow. proportion US cash one annual drivers to our represent X% This Growth the at our key the growth from of also XX. of in earnings

we modernization Through total a of XXXX, runway rate As invest have utility. a our rates reminder providing the lowest growth expect grid a great and US the utilities. for investment, in each our we renewables, to Indiana and improve translate in Ohio, keeping annual $X which growth to generation, smart billion new customers' affordable state, for at at both our and customers. residential rates These of while in of growth will projection experience high-end transmission, X% US and investments average base is for

earnings on case. grow the the our we distribution the rate these inline expect We At businesses decision core Ohio, from to AES rate commission's awaiting currently are with base.

now to a With to sheet, Steve CFO, turn remaining improve see invest significant Ohio's opportunity we As and I AES strengthen that the call over Coughlin. reliability competitive. reminder, our while cost to balance will

Steve Coughlin

Andrés and guidance. results allocation morning, you, Today discuss parent capital and XXXX second Thank everyone. XXXX our quarter I will good

plants higher count a manufacturer higher component quarter. parent in last our the which primarily the segments outages points financial core year full adjusted select turbine line the share onetime the beginning to we by result and contributions online. $X.XX had and the made are to back a quarter to positive as at by lower and XX. offset year, adjustment us equity a to pleased Adjusted expectations quarter driven our with defects thermal two additional primarily share for track that keeps There partially our for by now on of was were on results good growth in related funding accounting second we Slide interest our highlight from margins are well were like I Andes Turning all units, impacted These second versus business $X.XX AES our rate. driven guidance. at higher tax would outages EPS for These I'm growth expense businesses.

First, we investment-grade growth. tenures successfully all customer our days that our of businesses subsidiary expanding And support collections nonrecourse renewables second, outstanding strong rated financing, facilities remain at our very our sales attractive several in rates closed extending and reflecting predominantly and base.

as well drivers flat more resulting driven the our XX. was by second Utilities SBU, SBU previously Contributions market as for PTC the consistent development. contribution outages but was mentioned. Southland caused US the increased Andes be and the Adjusted America as slides Higher primarily favorable from next four our in I reflects partially side AES I higher SBU, America in PTC our Indiana contributions from to on pre-tax our primarily increased from at in XX. just I'll to margins, hydrology contributions by PTC strategic which performance Clean well investment clean renewables outages AES to Central as Higher better units by energy Mexico in of lower Caribbean million from was commissionings mostly with Panama. Energy half ownership business quarter, skewed beginning detail AES or South MCAC discussed. project the slide and at will over SBUs by the of In Turning year-over-year new at cover more PTC the year. the lower higher conditions driven offset relatively or due or $XXX was

year. on As market allowed of in higher our excess prices, will the reduced for as generation driver need a has thermal Andrés at remainder the discussed the the in to us LNG international Panama serve positive which sell

the our while expense Eurasia, our has Eurasia performance non-recourse debt interest reflects at been one business Holdco. coming from strong very additional PTC in lower Finally higher of

Now to slide XX.

adjusted to full on are EPS achieve We XXXX to guidance track year $X.XX of range our $X.XX.

with Our in of typical and the half the two-thirds QX our about second more is profile year. of QX heavily weighted quarterly toward earnings earnings occurring

driven more of year similar half in cooling profiles, higher go projects our solar Southern a months increased the in are California. expect the as primarily to fourth new the gigawatts demand higher earnings from and peak X.X in in where seasonality, further our US our as to demand of Andes, the including grow as continue will commissioning Growth generation over revenues backlog at quarters from and months the the higher profile businesses this on the online in Southland new we accretion US We utilities. LNG by contributions of AES growth coming second six more year ownership well based in projects next and third utility be and at

expected through renewables We on storage growth energy annual our in growth utilities. are reaffirming X% based our US to XXXX average also and X% expected target

our businesses also of portfolio. across our recycling many from thermal growth the assumes guidance of areas into capital those three Our

plan Now to parent XX. on capital allocation slide our XXXX

to expected Sources reflect new asset now expectations timing of of the $XXX already with planned completed, year we out XXXX. parent the which sales million the approximately within total sales uncertainty plan strong lower asset earlier remaining our to to billion allocation we flow. the free To sales end was debt around fund our plan cash sales, until target the included in discretionary to cash to in issue asset year. approximately close $XXX are laid growth Due parent capital are long-term our million $XXX expecting achieve million of we including million $XXX $X.X of this

our see planned On of capital. the right-hand use can side, you

nearly plan year continue nearly capitalize return these our investments and in investments in are to growth. consists in X% this attractive units. XXXX approximately of grid million We going of in Nearly continued three-quarters We renewables share during billion portfolio we a we our transformation. announced dividend contracts on our are summary, commitment one-quarter success for long-term new renewables base common opportunities on our This this of growth in December coupon and subsidiaries the $XXX of for AES' reflecting fleet our US utilities $X.X the as are AES' increase XXXX. last our investments to invest on US About fund securing to executing half and with reflecting to will businesses In expectations year. rate utilities, our shareholders to including focus these modernization. our a on grow equity

We on our with track investments on have remain far investment made great growth targets. and year progress our so this annual

continue by of our to allocate line renewables, X% capital annually recycle that, capital thermal to assets portfolio. With lead to our utilities to grow our will to call turn the We out strategy in over decarbonize with our in I'll Andrés. back and

Andrés Gluski

internationally. macroeconomic have portfolio to the In strong summary, year's growth X% resilience in annualized businesses of position a put again, this Steve. XXXX. you guidance or a strategy us to Thank proving is to in US actions any X% our and Once its volatility our through and achieve

PPAs awarded X.X year. gigawatts and this have signed been or new gigawatts targeting we're of gigawatts X.X We renewable year-to-date X.X to

has backlog further chain our chain, have made our construction affected supply of by seven starting a gigawatts panels up solar and in gigawatts XXXX. To schedule led to we reached US issues. buy to not annually been Our has XX.X derisk supply consortium

the to significant like our hydrogen the call that, With Inflation green Act be Reduction the see upside proposed questions. for we should approved. including would up US, Finally, I growth open to in

Operator

from Instructions] is [Operator Insoo Goldman question from Kim Our Insoo, line you. your Thank open. comes next Sachs.

Insoo Kim

Thank you.

pass bill. if on potentially you on growth the that to CAGR over does stuff. guess, First question proposed the Thank see and your potential EPS are inferring that you you with starting years that upside upside X% as the bill basis? could next I off to for few all this X% IRA comments a

Andrés Gluski

of as IRA in well. example expect one hydrogen a what for also would them We'd greater Insoo. number utilities opportunities, the is and be green Yes. from And Good which morning the good bill. Look by is we're there customers saying made more very certainly that demand is of US. likely corporate

So generally. it's

going to it certainly rather push true. would these say So if us higher come we're than the towards exceed that end

So that's how I would it. think about

Insoo Kim

at think passed? higher enough you that the that there's the And if has of Okay. end visibility component bill of

Andrés Gluski

see renewables mean, potentially would Yes. signed And also will think green you discrete it there hydrogen. of US. in the we I be in projects that in I the number

Insoo Kim

Got think for just it. domestically the consortium on from perspective, we that How about what projects domestic manufacturing return profile that get cost does should should My and we to any for those question projects panel panels second for that the on solar. changes those that a be considering?

Andrés Gluski

the in XXXX. is say major of would Well, this I starts that the component supply. security

this As beneficial. manufacturing we've week, this having a seen domestic just is very

the You'll with that here that manufacture announcement their Utah, an in came also Fluence going they're modules out in States. see to

solar prices to incorporated should look, is for it this say, I'd enough US have and market projects. So, be cost that be would it's competitive so and we see large what in clearing the the here

with we're just more customers. corporate adding other a adding as bilateral, negotiated clean the Now hours, in are our you're We're about in and features clients. also kilowatt our projects we generic past, value for talked of most US the not

help So, competitive. cost I think us this be will more

factor I -- think trade sort but, insulate restrictions the that from in of imports that will important of the future from solar the us Asia. is panels on most it any

the I that main -- benefit. So think is the

Insoo Kim

Understood. much. Thank you so

Operator

Insoo. you, Thank

ask Stanley. comes question Morgan next Arcaro from question. you from may David, your Our David

David Arcaro

end taking signings on was the for with the to that still level through we here. my slowdown level in gigawatt much X.X what's We've so the confidence wondering Thanks uncertainty X.X achieving expect of morning. pace But tariff. pace gigawatt the of the a Good a the by seen, year? should of the now right guess, rest PPA quarter Hi. of I around question. year? the bit the I in What's your second

Andrés Gluski

morning, Good Yes. David. Great questions.

more had amount that clients, had have call price was but to second continue on that be of key we that towards the half the expected of I there said prior and with cleared certain year, we uncertainty As to occurred. has negotiate to the because it this a that weighted of uncertainties we

another roughly So, to and bring speak megawatts now, us we X.X right that gigawatts. a today just to expect up sign XXX we as would

So, expect of -- sort breaking again, we as of news.

And but then to the which occurs the them do close signing in be expect activity that of is at speak. we expect bottom if we X.X would pick half. up We gigawatts, to as half second be we range, to the

feel gigawatts confident we the So, X.X we'll in that lumpy. X.X be gigawatts. These range are of to

XX-megawatt press different. we're them have that information It on our and noticed like not disclosure this in had you occurred So, this signing been the would -- on it's earlier, release day increments. the

that, this we'd sign gigawatts. And to at morning. expect be with we So, X.X

David Arcaro

Got it.

to great way exchange on I going on dialogue any obviously. I potential there -- seeing foreign some And look that's you No, is in any there? the sizable on We've sounds years? exchange. are impact moves foreign And seen downside the and exposure underway Okay. that manage touch active to But like kind just -- offsets for rates. are to to kind or future you of It some hear. efforts then, could wanted if quantify of drag

Steve Coughlin

hey, Yes, is this Steve.

bit So are you're -- through XXXX, we well a beyond. but term, little even hedged we are I the for asking longer very think

So year based positions. some our hedge frankly actually we upside -- net see on this actually

business in is we're is The US other about of -- to keep thing mind dollar that, XX% our denominated.

Colombia. businesses, where exposed we're is limited Brazil its its So and Argentina, a set of

So it's fairly exposure. small basically a

fact, this year, there. in we've we've seen in think, favorability appreciate some real Brazil so I had the

we would have on So eye to it's Argentina. just say, I really, our keep

to that. mitigate have We ways

have in debt the expenses have country; the in country. We local

it's how look is I within guidance the would it. manageable So at

Andrés Gluski

Bulgaria. is that, add would part I that of Yes. also

Steve Coughlin

Yes.

Andrés Gluski

euros. is Which

Steve Coughlin

Yes.

Andrés Gluski

probably XX%. look if you to euros, about at and So between you're getting dollars

that our primarily shaping in and again, of much very are done finance team strong has is, work new the great dollars. This portfolio, a decade the with we're also in sign job in that contracts but making sure the So we currency.

David Arcaro

so much. Got it. helpful. That’s Thanks

Andrés Gluski

Thank you.

Operator

Thank you, David.

Durgesh Durgesh, from open. your line Evercore. is comes question next from Our Chopra

Durgesh Chopra

Hey, with XXX what, one customer good in megawatts. one by morning, Steve that and or news Is the is Congrats, multiple customer? the Andrés. that with is Can you Breaking -- that customers? way.

Andrés Gluski

transaction. one That is transaction. That one is

Durgesh Chopra

Congrats Excellent. that. on

Okay.

tax your in just transferability the talk by you to you alternative about the little in bit I think, talked I your you and Andrés, on on it, of we How that dig Maybe impacts introduced do mean, So and to time that minimum is how concept think the kind business. last I that wanted headwind this the then, And bill. was offset to that. I'd views get credits. works? think love do a

Steve Coughlin

Okay.

I'll So guess. the side, take on tax I

it see is still and impact early. any near know the the don't look, this fluid min from tax global is on moving in still point, somewhat based The XX% But we what around. term. we situation So, at material

assessment So have If once time. we'll and a make into bill the anything, future and offsets continue to would that would expect and the activities it final be it planning details by several years into is I monitor would look we'll the that we finalized. and

this methodology. parallel taxing over calculating expect ensure it's minimum. a next to expect it We to the you Again, to and a us impact GILTI the don't already This are I subject another So few is is just basically, of a -- like regime. our years. way tax reach doesn't

Andrés Gluski

Yes.

our major see we Regarding parties. additional as We to question tool sell on transferability, a being credits management cash practices. like third impact, this tax see it your don't but to in is able an

that's favorable. So

Steve Coughlin

Yes. it partnerships it perhaps. equity make impact could are could mean, way simpler the structured, I tax

if and make manage transferability rules what around we've for. structure to that may it to see financing all But account it got the the the anything So first. looks are simpler

Durgesh Chopra

I Got certainly. okay. it, appreciate it

does discussion. or alternative $X because businesses the you say threshold. just is, for say when Maybe follow-up, out Steve the are Is that several it billion is you you that quick thank that that not mean? U.S. of your years several minimum on tax a really out, years So what of why when

Steve Coughlin

Yeah.

as a test $X referred billion you So to. there is

for there's So would I a I expect like come. that. meet to several that years And that. of we would three-year we think averaging don't expect meet that don't I

Durgesh Chopra

it. Got the Thanks guys. for time

Steve Coughlin

you. Thank

Operator

you. Thank

comes from question from JPMorgan. Richard, your is line Sunderland next Richard Our open.

Richard Sunderland

today. down in I I Hi. your I'm see of pretty guess, front, and time Thanks Good commentary on utilities locked with XXXX? similarly given portion to projects curious that for morning. you've that relative XH component the outstanding? LNG Ohio of Starting other, walk, given shifting is into two new the line $X.XX the uses to remains U.S. $X.XX you the renewables. can around the only and sight from that utilities break

Steve Coughlin

Yeah.

of feel frankly. So yeah, of I both the $X.XX very about buckets these renewables, good

in projects as So have our well both some as out growth is the of we renewables do portfolio. higher new the hydro generation

hydro recall last poor year As was year. you a

on side So we've that's Andrés on mentioned, been well. as this side, commodities the really had LNG with then, bucket And in of and year. -- that the things utilities we've the as right

So international LNG high. quite are prices

on have gas unit, position We year and redirect market. wet that to of those them LNG in MCAC where able Panama specifically been sell not a use course we've international quite our in in Panama we've had the cargoes and

while there in a go not it the year-to-date, So to year is -- favorability. that's

So components the that's two frankly, the half that even over primary potential say additional growth year. some of see second We've are And of for of $X.XX. I the would $X.XX. more Those for got half utility baked I that in little upside. a

as you that's think I So and about asked well. then, -- Ohio

new Andrés where, his this said the that Ohio It's material in have contribution not yet year. a So a rates with we something assumed from comments, decision. -- don't had as we

for look to it's we a the other continue year. to driver be But constructive to certainly So a way going this decision one a outcome. forward expect not or

Richard Sunderland

two and ties this, expand new for more the structured it of opportunity. you renewables opportunities renewables with appreciate there. some the the do could green the you on complex platform? And Understood, the they're I How I products timing guess years? broadly capitalized thinking hydrogen with existing U.S. past both the in How about in think color demand

Steve Coughlin

hydrogen partnerships production get the more whole past said with to we as producers actually of integrated Well, are chain. we the looking in at in

supplying problem XXX% is cheap interesting centers. green much hydrogen of XX/X data carbon-free or producing energy the like very very energy what's is to green that So,

So, a up leg here. have we we think

likely So, legislation then we're to working forward. very passes move on this. it's If the

So, that we've we not And does waiting would much meantime different Chile more mining market. good supply we for. which be of and the In depend local have a decarbonizing what this. the system done in a on the obviously that's project in very been particular. sector the have job And to Chilean

So, we feel these significant good would of both these and about be projects.

accelerate would because they of additional the demand. of renewables the So, growth

Richard Sunderland

Understood. Very helpful.

final inflation to cleanup one Just for that me. The and Southland led outage what there? any impact

Steve Coughlin

Yes.

actually So was the also same it and root Indiana. cause it was Southland at

are veins So, turbine the unit understand. I there compressor on

So, don't a manufacturing component go to detail they there's go of related much into but to too defect. -- failure

in And gas the those both have in our New Southland and turbine. Indiana Valley Southland replacements combined so units the Eagle in cycles

been are So, They replaced. back online this those point. both have at

Richard Sunderland

the time for you Thank today. Understood.

Steve Coughlin

you. Thank

Operator

Thank you.

Our Storozynski Seaport. comes Angie, Angie next is from question from your open. line

Angie Storozynski

Thank you.

will the impact understand So, file has an XXXX. timing on on decision to it I the sounds no by ESP. have accounts I on but back I of all it wanted Ohio like it you will the rate to case. to that those have XXXX, go mean

final time resolution? XXXX. there should take in might an the it So, to right the impact be So, of

I could cargoes can around you is mean so additional that -- mean the XXXX. impact in that And I LNG you there context that mentioned optionality

assume to shifting any fair also it is So, LNG cargoes in of impact XXXX? the by the that

Steve Coughlin

to an offset as I We're mean necessarily could other one the it attributing Angie. certainly be. not

was and stability XX because hand charge could been rate is -- implemented place. new in now while this a at we've So, whether issue in rates It's be place. already come supported increase. The staff the for whether issue rate the the historically in had still any charge rate that years about place out had

issue the file evaluated have associated the being new riders are And the quickly ESP, that fact rates move commissioners. by on will so think in with I that's a new If and it. fundamental we'll frozen, to

than a it so be would And more anything. delay of

that new that the we point, stability – and would that the once would place, file at ESP then charge rates in a would current and been be we ESP stay new would has So rate approved. implemented

middle the So our some will still to or that should is rate would – freeze not not on the optimistic necessary outcome We're be the here required legal our into the year that take next have of of belief based favor position just to – that delay, delay. we path rate the our in to to go the regardless, freeze, see on could be a what in path get we guidance included described filed. But of ESP as that. we that be down I a not our if

Andrés Gluski

Angie, little bit to the describe maybe Panama. And in a opportunity

we We prices. being Hub also the at re-gasification LNG have terminal hydro, but Henry have

customers kind therefore those liquefaction Of is one-sided international plus cargoes because to international But transportation of but reservoirs course, we at rates. enough our and re-gasification. Hub if lot a Henry water obviously ship had to the prices of fulfill a a nonetheless, of burn, it's contracts, water bet, have we cash opportunity, lot the there the in not to

arbitrage there's interesting So there. a very opportunity

one-sided a consume fulfill the raining, stops it or bet. then reservoir it's we'll our So contracts. the gas just if If and fall levels

Angie Storozynski

in months? you it hydro a of, mean, going sort are season like how rainy hard predict to I is but a by some mean, So And it's a that? to I conditions, know bit sense,

Andrés Gluski

Yeah.

So raining it's been look, a lot.

reservoirs these make start do to full and season be started. would are we're So the persist, more XXXX international dry off very a What customers really that's these get year. rainy I'm arbitrage. conditions has or XXXX say being why able that The and sell does to to gas referring

in of will for locked opportunity question in. we're really a XXXX. repeat So this It's XXXX,

Angie Storozynski

Okay.

this to developers existing conventional comments bill, solar adding energy also other to with existing from benefit or also I in secondary about assets you I bill the storage mean, portfolio. PV so and your say and green some again listen retrofitting how could hydrogen the But could it on portfolio? that the actually assets, – depends are of talking guess existing money. repowering in talk of wind they I made could power to on I age about they which to storage. understand, some moving your benefits So maybe mean, would changes about additional inflation you contracts, you smaller facilities. are But farms. that sites I installing heavy benefits of add when there benefits bill, are the your

Andrés Gluski

course, I it in repowering that, add-ons. helps have have and think we of these What Well, we contracts Yeah. see already places. to is

negotiate on at question we're that repowering so to units also some we – we and – location based Mountain Laurel California done is, repowering Maryland plan to the starting additional we've do Mountain. at And already an in in contract from we've View, been do

energy you're and have happen, look to what pretty right. would existing we renewable be there, additional on the opportunities do does then to keep contracted that's talked could you have But the are or opportunities add an those there fully to helps -- it. you client is to it this smaller So you're but much and It question that upside at the that side does additional right, since simple, there? what about an what much is one that this haven't same are the you so -- adder we

Angie Storozynski

I I and these sentence. offshore Okay. mean, saw And winds think in about yet reports wind. that I've I mean, ever offshore media don't same Vietnam and lastly, we imagined the

about that could opportunity? talk So you

Andrés Gluski

Sure.

release. You our it in press noticed was

helping a the look with grid. plan up in decarbonize say, to their I'd a this so Vietnam. -- Vietnamese First, we're We're come is

And have in we bringing we other project been about storage have there. LNG renewables. So do -- terminal the are and talking energy

eliminate to the coal additional need for plants. So,

say, more I'd an exploratory this issue. point, was this sort of at So

all goals the given very US, that disciplined we've XX% committed We and will XX% to renewables. be

into partner whenever obviously we'd we a have somebody. with new technology, to get Now

let's against it a we of just sense somebody course, the markets have we US, to who competitive. didn't it really plenty done have cost of we're any there's land nothing, would But haven't like So wind, make in But experience. we the economically. technology with because partner itself. say, and long wasn't offshore The still has

And so in a time. going large we're get not into to on new own at scale this our technology a

exact given this we the is not that going so stick And from have -- us to we're announcement guarantee was is goals this you. again, what and to an we

Angie Storozynski

Great. Thank you.

Andrés Gluski

you. Thank

Operator

Angie. you, Thank

open. Our next is line from of Dumoulin-Smith question your comes from America. Bank Julien, Julien

Paul Zimbardo

Hi. busy Zimbardo Paul Good in lot. morning. It's Thanks a sitting morning. this

Andrés Gluski

Good morning.

Paul Zimbardo

for could gave income in Inflation Act? Next breakeven the assumption? XXXX. AES last That's in. the evolve the check net how good long-term to I believe still the by was wanted you plan And a under that end Reduction of guidance I

Steve Coughlin

Yes. it Paul, said that that. was I XXXX, Actually,

Fluence largest look the component So Next. of is

and So they've a their call I But executing of have can't been talk detail, things we'll go about on lately. performance. their number into soon they'll

are Andrés They're manufacturing talked facility. launching about, As they their base. battery their supply Utah diversifying

they've So, what XXXX. what well. be in with included which to guided consistent they'll as we've we bottom fully line That's our is by based expect neutral very guidance on that

growing both. about of progress, Fluence would they'll as happens is as so that levers say, neutral there. But has about good feel And we regardless I then that will AES well Fluence be from talk the and what portfolio doing their but that with

Andrés Gluski

bit speak a maybe little other And about the like Uplight. components

Electric. with did know, they deal the you Schneider As

in a Maverick, have XB, they wider lot So of producer the very product projects first now say the prefab interest you in Maverick have you being is solar. in much, a partner let's then offering where Chile. large-scale strong seeing completed which Schneider. We're strategic and have And the of

have Rico. in projects already Puerto a We Panama. small we've And big project done in

about this very project – wind is that important is product resistant. it's what's So this hurricane

this And of we're Caribbean the of of Australian So company. Australia. lot hurricane built all a government product. is a sort change been in This of seeing there's for an also interest in

projects [indiscernible]. the sort that's were they Australia, looking and hometown in very So which have of favorably very large

we So that well. good feel about as

opportunity to of AES to the technologies be overall So that roll feel is we the us the fulfilling and out. really Next us giving first leading-edge mission its them giving

Paul Zimbardo

a Okay. you there? would Great. legislation, impact And then flows cash assets have bit from either just how little you you. elaborate the increasing gas the that California extending, recent could or on both the please Thank separately

Steve Coughlin

very Yes. optimistic. No we feel

– I only you've got we have Huntington talked Southland we've about So previously, included as Beach XXXX. legacy and Redondo through businesses, Alamitos

three So would would all be two it be but that possibly not years. probably least expect at to say extended several we for may I plants,

are of that then formal in the terms permitting next into run through cooling the the first likely of will the that So et expect kick the ones months. two needed, say next to cetera process half I one year year. And will in half next permits first here would off of through

and been permitting to where when As we've facing we've continued the all looked we've a extension, in we've upon coming do capacity done forward the potential contingent contracts, forward. executed going past, that –

extensions, process at the in once formal underway So for state. commercial the opportunities gets we'll the start looking

to And year be say, so here to the that for come. needed optimistic peak several given the and years additional would is fundamentals I the but more capacity we'll very have that but going system of Southwest certainty next all we're the California of in droughts US the

we And to position a we're in so that some provide that provide upside plan. our will good and to feel

Paul Zimbardo

Great. Thank Coughlin. you,

Steve Coughlin

you, Thank Paul

Operator

Thank you.

David line is Peters Research. question Our from Wolfe open. comes next David, from your

David Peters

LPA. they're Hey, wondering was Andrés, with Yes. recently from here I specifically could seeing US, recently respect just you to panels at the that morning, the some issues stopped with good being We've heard comment, everyone. companies border. if

all Just kind all are wondering not seeing what I you're guess. if if you differently and this at doing of

Andrés Gluski

Act, Forced stopped excuse Uyghur seen -- imports The Yes. by our we me. any have not Prevention Labor of panel

in the forced the labor. be But know Korea. As time, the we're -- polysilicon you using today that panels making place, could that Western nothing countries. that to labor. China, a from XX% you first have the that the we ASEAN polysilicon from come matter make And asked comes as be we Asia of still US, know we've starting that import be manufacturers been of on occurring you likely there's that from allegedly forced top And Polysilicon, the long that China. is would for themselves, Southeast of allegations more where use sure could there this to is coming wafers China of -- to the the plan

time. to answer have been documentations for China, some and time believe anything with we take any of we the a But move it's them, chain we've are that going suppliers So now. the and our long but working no, haven't supply is out place have and issues short we seen to to not best

is just develops. see this have how nothing So this we but to new,

major expect don't any we issues. So

David Peters

an asset dilution little end, to Jordan? as other less and and just little I And the one when one on Can are give in guess result bit those just a this close a just I processes on then update too. And expecting you guess? you're Great. year, the of sale more Vietnam low target being a at expected the

Andrés Gluski

least at approval. Yes. Look, have what's have, do with to basically government

our Vietnam, agreed approval, operator case It's of not government's a a price. plant. that counterpart. just of we've new question with It's of well been of in it's question So the the the the government -- the

we of resolution, loans, to to signing taken on. do expect of mentioned with the this them for That's some including lenders and I by some the so off And new the do the has to it's end why is buyers. it. the government US that's comfortable the with Jordan, really And dragged case, But you get other time year. think that

these have to price, issues, but bureaucratic agreed taken have been the conditions than really all So been expected. buyer, sale we just longer and it the the has

Steve Coughlin

Yes. of majority Yes. the the And $XXX that's million.

of end good, feel those on Andrés there as been And we primarily we'll and get thermal on So of sell-downs businesses. we working have additional said, year. by the then, this sales

is like timing we and to come some work around of half we let's said, it year, the $X on we the say towards the we billion XXXX, year. $XXX $XXX And as then will this why on the focus in target, of well next of for. $XXX those, track through which first variability, So full those million remaining in million million feel the may some happen that looks have

expectations a doing So, it's months some or just in say what matter timing XX so. around, the next we're of

David Peters

guys. you, Thank Okay.

Andrés Gluski

Thank you.

Operator

you. Thank

further no Harcourt, I ahead. any to closing like have back to questions. Therefore, go for hand remarks. We Susan Susan, would please

Susan Harcourt

joining thank us for We today's everybody call. on

questions, have nice team available any answer have. will to As you always, day. Thank may you the IR follow-up be and a

Operator

being you lovely Thank Have gentlemen today. us is this Ladies and you. a ahead. Thank with day today's conference for call.

disconnect may lines now. your You

The AES Corporation (AES) 5 Aug 222022 Q2 Earnings call transcript