AES touts $1.24 billion free cash flow in 2015, cuts $345 million debt

By Lisa Kerner

Charlotte, N.C., Feb. 24 – AES Corp. is continuing to execute on its strategy that includes improving the balance sheet and debt profile and simplifying the company’s geographic footprint, said president and chief executive officer Andres Gluski during AES’ fourth-quarter earnings call on Wednesday.

Despite “significant macroeconomic headwinds in 2015,” AES delivered strong free cash flow of $1.24 billion for the year ended Dec. 31, a 39% year-over-year improvement, according to Gluski.

Fourth-quarter proportional free cash flow increased $6 million from the prior-year period to $293 million.

AES also repurchased about $480 million of its shares and reduced parent debt by $345 million through repayments and refinancing during the year. Parent debt was reduced by $116 million since Nov. 5.

Since 2011, AES has reduced parent debt by 23% and share count by 15%. The company returned $2 billion to shareholders from 2012 through 2015, including about $757 million in 2015.

The company used about $1.6 billion of discretionary cash in 2015, said executive vice president and chief financial officer Thomas O’Flynn on the call.

Of the total, 91%was allocated to debt repayment, dividends and share repurchases, according to the company’s 2015 parent capital allocation plan.

AES expects to repay $200 million of debt in 2016 using discretionary cash.

During 2015, AES said it announced or closed seven asset sale transactions for $787 million in equity proceeds and brought five new constructions online.

The Arlington, Va.-based power company has announced or closed 41 asset sales for about $3.4 billion in equity proceeds and exited from operations in 11 countries since September 2011.

Financial highlights

For the full year, AES’s consolidated net cash from operations was up $343 million year over year at about $2.13 billion.

Full-year adjusted earnings per share were down eight cents to $1.22, due primarily the devaluation in foreign currencies in Latin America and Europe, the impact of lower commodity prices and lower demand in Brazil, the company said.

Looking ahead, AES has lowered its guidance for 2016 proportional free cash flow to $1 billion to $1.35 billion, from between $1.13 billion and $1.48 billion.

Guidance for parent free cash flow for the full year 2016 was also lowered by $50 million to $525 million to $625 million.

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