AES Corp forecasts upbeat 2025 profit on new renewable energy projects

Adds details from conference call in paragraphs 7 and 8, updates shares in paragraph 2

By Pooja Menon

Feb 28 (Reuters) - AES Corp AES.N forecast annual adjusted profit above Wall Street expectations on Friday, banking on contributions from its new renewable energy projects and rate-base growth in utilities segment.

Shares of the Virginia-based power company rose 13.7% in afternoon trade.

Higher base rates provide necessary funding for maintaining and upgrading grid infrastructure, which is currently facing an onslaught of power demand from data centers.

"We see strong demand from the growing needs of AI data centers and new manufacturing plants in the US, and we are well-placed to meet their demand for the shortest time to power," CEO Andres Gluski said.

The company's Indiana unit has received approval from the Indiana Utility Regulatory Commission to implement new base rates, supporting an investment program aimed at improving customer reliability, AES said.

The company's power purchase agreement backlog, which consists of projects that have signed contracts but are not yet operational, stands at 11.9 gigawatts (GW), including 4.9 GW under construction.

The utility said in an earnings call that it will onshore its supply chain to the U.S., reducing its risk from new tariffs.

The company stated that almost all of its solar panels, trackers and batteries are now located within the U.S. and are under contract to be domestically produced for upcoming projects through 2027.

AES posted an adjusted profit of 54 cents per share in the quarter ended December 31, beating analysts' average estimate of 34 cents, according to data compiled by LSEG.

Quarterly sales in its utilities segment rose about 11% to $878 million from a year earlier.

AES forecast its 2025 adjusted profit to be in the range of $2.10 to $2.26 per share. Analysts, on average, were expecting an annual profit of $2.03 per share.