TransAlta Corporation (“TransAlta” or the
“Company”) (TSX: TA) (NYSE: TAC) today reported its financial
results for the first quarter ended March 31, 2024, demonstrating
strong operational and financial performance and reaffirming its
2024 outlook.
First Quarter 2024 Financial Highlights
TransAlta’s first quarter results exceeded our
expectations given the anticipated decline in Alberta spot power
prices to $99 per MWh in 2024, as compared to elevated spot power
prices of $142 per MWh in 2023. The 30 per cent decline in spot
prices year over year was primarily due to milder weather, lower
natural gas prices and incremental generation from the addition of
new wind and solar supply in the market. Highlights for the quarter
include:
- Adjusted
EBITDA(1) of $328 million, compared to $503 million for the same
period in 2023
- Free Cash Flow
("FCF")(1) of $206 million or $0.67 per share, compared to $263
million or $0.98 per share for the same period in 2023
- Earnings before
income taxes of $267 million, compared to $383 million for the same
period in 2023
- Net earnings
attributable to common shareholders of $222 million, compared to
$294 million for the same period in 2023
- Cash flow from
operating activities of $244 million, a decrease of $218 million
for the same period in 2023
- The return of
$53 million of capital to shareholders year to date through the
buyback of 5.9 million common shares constituting 35 per cent of
the Company's previously announced 2024 enhanced share repurchase
program of up to $150 million
Other Business Highlights and Updates
- Achieved
commercial operation of the 100 MW White Rock West wind facility on
Jan. 1, 2024 and the 200 MW White Rock East wind facility on April
22, 2024
- Completed the
Mount Keith 132kV expansion on Feb. 29, 2024
- Advanced
commissioning of the 200 MW Horizon Hill wind facility to its final
stages
- Achieved strong
operational adjusted availability of 92.3 per cent
- Paused
greenfield growth projects in Alberta pending clarity on the impact
of new market regulations announced by the Government of
Alberta
- Signed the 2024
Bow River Basin water sharing memorandum of understanding in
preparation for potential lower water conditions in southern
Alberta
- Announced the
transition of its Executive Vice President, Finance and Chief
Financial Officer ("CFO") with the retirement of Todd Stack
effective June 30, 2024 and the appointment of Joel E. Hunter as
Executive Vice President, Finance and CFO effective July 1,
2024
"Our first quarter results demonstrate the value
of our asset optimization and hedging strategies, supported by our
strong operating capabilities. We continue to perform well while
managing through the evolving markets of our operating portfolio,
illustrating the advantage of our diversified fleet," said Mr. John
Kousinioris, President and Chief Executive Officer of
TransAlta.
"We are confident that we will reach our 2024
guidance given the performance of our growing generating portfolio.
We do not believe that our strong free cash flow results in the
first quarter, and our expectations for the balance of 2024, are
reflected in the current trading price of our common shares. As a
result, we will continue to use share repurchases as part of our
capital allocation strategy. Year to date, we have deployed $53
million towards share repurchases, which is approximately 35 per
cent of our $150 million share repurchase target or $0.17 per share
in value to shareholders," added Mr. Kousinioris.
"We are focused on making balanced capital
allocation decisions that enhance value for our shareholders as we
execute the next stage of our aspirational Clean Electricity Growth
Plan. Given the recent announcements on market changes from the
Government of Alberta, we have decided to pause greenfield
development in Alberta until the full impact of the Restructured
Energy Market is understood. Our focus will shift to our other core
jurisdictions, the United States and Western Australia, where we
will look to secure appropriate risk-adjusted returns within stable
markets."
"The interim regulations to be adopted by the
Government of Alberta effective July 1, 2024 in relation to market
power mitigation and the supply cushion in the province remain in
effect until Nov. 30, 2027 and are not expected to have a
significant impact on our Company. We believe market prices and
offer behaviour will be driven primarily by preexisting demand and
supply fundamentals, which are already reflected in the weaker
pricing conditions expected over the period of time that the
regulations will be in place," added Mr. Kousinioris.
Key Business Developments
White Rock Wind Facilities Achieve Commercial
Operation
On Jan. 1, 2024, the 100 MW White Rock West wind
facility achieved commercial operation. On April 22, 2024, the 200
MW White Rock East wind facility was also commissioned. The White
Rock wind facilities are located in Caddo County, Oklahoma and are
contracted under two long-term PPAs with Amazon for the offtake of
100 per cent of the generation from the facilities. The Company's
wind generating portfolio in the US now totals 819 MW in gross
installed capacity.
Bow River Basin Memorandum of Understanding
On April 19, 2024, the Company announced it had
signed a voluntary water-sharing memorandum of understanding with
over thirty other water licence holders in the Bow River Basin. The
Government of Alberta continues to anticipate and prepare for lower
water conditions this summer with specific concerns in southern
Alberta where agriculture could be impacted by water shortages. The
Government of Alberta is leading efforts to coordinate water usage
among water licence holders for Alberta river basins in an effort
to ensure licensees get the water they need as opposed to the water
to which they are entitled. In recognition of the unique role the
Company plays in managing water flows while also serving as a key
provider to Alberta's electricity grid, we look forward to working
with the Government and downstream stakeholders to maximize water
storage in the early season to help mitigate any anticipated
drought conditions. We anticipate the Company's water management
efforts will not have an adverse impact on our electricity
generating and environmental objectives.
Annual Shareholder Meeting
The Honourable Rona Ambrose did not stand for
reelection and retired from the Board of Directors ("Board")
following the annual shareholder meeting on April 25, 2024. The
Board extends its gratitude for her service to the Company. She has
been a valuable contributor to the Board since 2017 and we thank
her for her leadership and insight, including her contributions as
Chair of the Governance, Safety and Sustainability Committee of the
Board.
At the annual general meeting of the holders of
common shares of TransAlta, the Company received strong support on
all items of business, including the election of all 12 directors
and Say on Pay.
TransAlta Announced Retirement of CFO and Appointment of
New CFO
On April 11, 2024, the Company announced the
retirement of Todd Stack, Executive Vice President, Finance and
Chief Financial Officer from the Company, effective June 30, 2024.
The Board expresses its deep appreciation to Mr. Stack for his
contributions during his 34-year career with the Company. Mr. Joel
E. Hunter will be appointed as Executive Vice President, Finance
and CFO effective July 1, 2024.
Normal Course Issuer Bid ("NCIB") and Automatic Share
Purchase Plan ("ASPP")
TransAlta is committed to enhancing shareholder
returns through appropriate capital allocation such as share
buybacks and its quarterly dividend. The Company previously
announced an enhanced common share repurchase program for 2024 of
up to $150 million, targeting up to 42 per cent of 2024 FCF
guidance being returned to shareholders in the form of share
repurchases and dividends.
The Company also previously announced that it
had received approval from the Toronto Stock Exchange (“TSX”) to
purchase up to 14,000,000 of its common shares during the 12-month
period that commenced on May 31, 2023 and will terminate on May 30,
2024. The Company intends to renew the NCIB in May 2024.
On March 19, 2024, the Company entered into an
ASPP to facilitate repurchases of TransAlta’s common shares under
its NCIB.
Under the ASPP, the Company’s broker may
purchase common shares from the effective date of the ASPP until
the termination of the ASPP. All purchases of common shares made
under the ASPP will be included in determining the number of common
shares purchased under the NCIB. The ASPP will terminate on the
earliest of the date on which: (a) the maximum purchase limits
under the ASPP are reached; (b) May 3, 2024; or (c) the Company
terminates the ASPP in accordance with its terms.
During the three months ended March 31, 2024,
the Company purchased and cancelled a total of 3,460,300 common
shares, at an average price of $9.36 per common share, for a total
cost of $32 million.
Mount Keith 132kV Expansion Complete
The Mount Keith 132kV expansion project was
completed during the first quarter of 2024. The expansion was
developed under the existing power purchase agreement with BHP
Nickel West ("BHP"), which has a term of 15 years. The expansion
will facilitate the connection of additional generating capacity to
the transmission network which supports BHP's operations and
increases its competitiveness as a supplier of low-carbon
nickel.
Production Tax Credit ("PTC")
Sale Agreements
On Feb. 22, 2024, the Company entered into a
10-year transfer agreement with an AA- rated customer for the sale
of approximately 80 per cent of the expected PTCs to be generated
from the White Rock and the Horizon Hill wind projects. The
expected annual average EBITDA from these contracts is
approximately $57 million (US$43 million).
First Quarter 2024 Highlights
|
$ millions, unless otherwise stated |
Three months ended |
|
March 31, 2024 |
March 31, 2023 |
|
Operational information |
|
|
|
Adjusted availability (%) |
92.3 |
92.0 |
|
Production (GWh) |
6,178 |
5,972 |
| Select financial
information |
|
|
|
Revenues |
947 |
1,089 |
|
Adjusted EBITDA(1) |
328 |
503 |
|
Earnings before income taxes |
267 |
383 |
|
Net earnings attributable to common shareholders |
222 |
294 |
| Cash
flows |
|
|
|
Cash flow from operating activities |
244 |
462 |
|
Funds from operations(1) |
239 |
374 |
|
Free cash flow(1) |
206 |
263 |
| Per
share |
|
|
|
Net earnings per share attributable to common shareholders, basic
and diluted |
0.72 |
1.10 |
|
Funds from operations per share(1),(2) |
0.78 |
1.40 |
|
FCF per share(1),(2) |
0.67 |
0.98 |
|
Weighted average number of common shares outstanding |
308 |
268 |
Segmented Financial Performance
|
$ millions |
Three months ended |
|
March 31, 2024 |
March 31, 2023 |
|
Hydro |
87 |
|
106 |
|
| Wind and Solar |
89 |
|
88 |
|
| Gas |
134 |
|
240 |
|
| Energy Transition |
26 |
|
54 |
|
| Energy Marketing |
20 |
|
39 |
|
|
Corporate |
(28 |
) |
(24 |
) |
|
Total adjusted EBITDA |
328 |
|
503 |
|
|
Earnings before income
taxes |
267 |
|
383 |
|
First Quarter 2024 Financial Results
Summary
For the three months ended March 31, 2024, the
Company demonstrated strong financial and operational performance
and is on track to meet its 2024 Outlook, due to active management
of our merchant portfolio and hedging strategies, which included
higher production in the Hydro and Gas segments.
Production for the renewables fleet for the
three months ended March 31, 2024, was 1,849 GWh compared to 1,503
GWh for the same period in 2023, an increase of 346 GWh or 23 per
cent, primarily due to:
- Production from
new facilities, including the White Rock West wind facility
commissioned in January 2024 and the Garden Plain wind facility
commissioned in August 2023;
- The return to
service of the Kent Hills wind facilities, completed in the first
quarter of 2024;
- Precommissioning
production from the White Rock East wind facility and the Horizon
Hill wind project, partially offset by lower wind resource in
Alberta; and
- Higher hydro
production due to significant demand resulting from periods of
extreme cold conditions in Alberta.
Total production for the three months ended
March 31, 2024, was 6,178 GWh compared to 5,972 GWh for the same
period in 2023, an increase of 206 GWh or 3 per cent, primarily due
to:
- Higher
production of 356 GWh or 11 per cent from the gas segment driven
primarily by the Sarnia facility as market conditions were
favourable, which enabled higher dispatch resulting in higher
merchant production to the Ontario grid;
- Higher
production from our renewables fleet discussed above; partially
offset by
- Negatively
impacted production of 801 GWh, a decrease of 496 GWh or 38 per
cent, from the Energy Transition segment compared to the same
period in 2023, primarily due to higher unplanned outage hours and
increased economic dispatch at the Centralia facility.
Adjusted availability for the three months ended
March 31, 2024, was 92.3 per cent, compared to 92.0 per cent in the
same period in 2023, an increase of 0.3 per cent, primarily due
to:
- The return to
service of the Kent Hills wind facilities;
- Lower unplanned
outages in the Wind and Solar segment, partially offset by;
- Unplanned
outages at Centralia Unit 2 in the Energy Transition segment;
- Unplanned
outages at Sundance Unit 6 and the Australia gas facilities;
and
- Planned major
maintenance outages in the Hydro segment.
Adjusted EBITDA for the three months ended March
31, 2024, was $328 million compared to $503 million in 2023, a
decrease of $175 million, or 35 per cent. Although overall results
were in line with expectations for the year, the major factors
impacting adjusted EBITDA compared to the same period of 2023 are
summarized below:
- Hydro adjusted
EBITDA decreased by $19 million, or 18 per cent, compared to the
same period in 2023, primarily due to lower realized gains on
forward contracts and lower realized power and ancillary services
prices in the Alberta market, partially offset by higher production
due to significant demand in periods of extreme cold temperature
conditions in Alberta, and higher sales of environmental attributes
to third parties;
- Wind and Solar
adjusted EBITDA increased by $1 million, or 1 per cent, compared to
the same period in 2023 primarily due to higher environmental
attribute revenues, higher production from the return to service of
the Kent Hills wind facilities, the commercial operation of the
Garden Plain and White Rock West wind facilities and the Northern
Goldfields solar facilities, partially offset by lower realized
power prices in Alberta and weaker wind resource across the Alberta
operating fleet;
- Gas adjusted
EBITDA decreased by $106 million, or 44 per cent, compared to the
same period in 2023, primarily due to lower realized power and
ancillary prices from the Alberta merchant fleet driven by lower
spot prices and the impact of lower-priced hedge contracts, lower
capacity payments in 2024 for Southern Cross Energy in Australia
due to the scheduled conclusion on Dec. 31, 2023 of the demand
capacity charge under the applicable contract, higher fuel and
purchased power from higher production, increased carbon costs and
higher OM&A expenses mainly due to increased salary
escalations, partially offset by the commencement in March 2024 of
capacity payments from the Mount Keith 132kV expansion and lower
natural gas commodity costs;
- Energy
Transition adjusted EBITDA decreased by $28 million, or 52 per
cent, compared to 2023, primarily due to lower production from
higher unplanned outages at Centralia Unit 2 and increased economic
dispatch due to lower market prices, partially offset by lower fuel
costs from lower production volumes;
- Energy Marketing
adjusted EBITDA decreased by $19 million, or 49 per cent, compared
to the same period in 2023, but is in line with management
expectations primarily due to lower realized settled trades in the
first quarter of 2024 on market positions in comparison to the
prior period, partially offset by lower OM&A due to lower
incentives; and
- Corporate
adjusted EBITDA decreased by $4 million, or 17 per cent, compared
to the same period in 2023, primarily due to increased spending to
support strategic and growth initiatives.
Cash flow from operating activities totalled
$244 million for the three months ended March 31, 2024, compared to
$462 million in the same period in 2023, a decrease of
$218 million, or 47 per cent, primarily due to:
- Lower gross
margin on lower revenues and higher carbon compliance costs;
- Lower current
income tax expense due to decrease in earnings before tax; and
- Lower accounts
payable and accrued liabilities and higher collateral provided as a
result of market price volatility, partially offset by lower
accounts receivable from lower revenues and higher collateral
received related to derivative instruments.
Free Cash Flow totalled $206 million for the
three months ended March 31, 2024, compared to $263 million
for the same period in 2023, a decrease of $57 million, or 22 per
cent. The major factors impacting free cash flow were:
- Lower adjusted
EBITDA items as noted above;
- Lower current
income tax expense due to lower earnings before tax;
- Lower sustaining
capital expenditures due to the receipt of a lease incentive
related to the relocation of the Company's head office; and
- Lower
distributions paid to subsidiaries' non-controlling interests
relating to the timing of distributions paid to TA Cogen and the
cessation of distributions by TransAlta Renewables Inc. resulting
in higher free cash flow.
Net earnings attributable to common shareholders
totalled $222 million for the three months ended March 31, 2024,
compared to $294 million in the same period in 2023, a decrease of
$72 million, primarily due to:
- Lower adjusted
EBITDA due to items discussed above; and
- Fluctuations in
current and deferred tax expense with earnings before tax across
the quarters.
Alberta Electricity Portfolio
The average spot power price per MWh for the
three months ended March 31, 2024 was above the upper end of
guidance but decreased from $142 per MWh in 2023 to $99 per MWh in
2024 primarily due to:
- Milder weather
compared to the same period in 2023;
- Lower natural
gas prices; and
- Higher
generation from the additions of new wind and solar supply in the
market compared to the prior period.
Gross margin for the three months ended March
31, 2024, was $231 million, a decrease of $118 million,
compared to the same period in 2023. The decrease was primarily due
to:
- The impacts of
lower Alberta realized spot prices and lower fixed-price hedges;
partially offset by
- Higher
environmental attribute revenues.
Hedged volumes for the three months ended March
31, 2024, were 1,908 GWh at an average price of $88 per MWh
compared to 2,046 GWh at an average price of $136 per MWh in 2023.
Hedged production volumes for the three months ended March 31,
2024, decreased compared to the same period in 2023, primarily from
fewer strategic hedges executed for the first quarter of 2024.
Liquidity and Financial Position
We expect to maintain adequate available
liquidity under our committed credit facilities. As at March 31,
2024, we had access to $1.7 billion in liquidity, including $417
million in cash.
2024 Financial Guidance
The following table outlines our expectations on
key financial targets and related assumptions for 2024:
|
Measure |
2024 Target |
|
Adjusted EBITDA |
$1,150 million - $1,300 million |
|
FCF |
$450 million - $600 million |
|
FCF per share |
$1.47 - $1.96 |
|
Annual dividend per share |
$0.24 |
The Company's outlook for 2024 may be impacted
by a number of factors as detailed further below.
|
Market |
2024 Assumptions |
|
Alberta spot ($/MWh) |
$75 to $95 |
|
Mid-C spot (US$/MWh) |
US$75 to US$85 |
|
AECO gas price ($/GJ) |
$1.75 to $2.25 |
Alberta spot price sensitivity: a +/- $1 per MWh
change in spot price is expected to have a +/-$3 million impact on
adjusted EBITDA for 2024.
Other assumptions relevant to the 2024
outlook
|
|
2024 Expectations |
|
Energy Marketing gross margin |
$110 million to $130 million |
|
Sustaining capital |
$130 million to $150 million |
|
Corporate cash taxes |
$95 million to $130 million |
|
Cash interest |
$240 million to $260 million |
|
Hedging assumptions |
Q2 2024 |
Q3 2024 |
Q4 2024 |
Full year 2025 |
Full year 2026 |
|
Hedged production (GWh) |
1,983 |
2,249 |
2,153 |
4,614 |
3,215 |
| Hedge price ($/MWh) |
$85 |
$85 |
$85 |
$79 |
$80 |
| Hedged gas volumes (GJ) |
14 million |
14 million |
15 million |
28 million |
18 million |
| Hedge
gas prices ($/GJ) |
$2.80 |
$2.84 |
$2.80 |
$3.52 |
$3.67 |
Conference call
TransAlta will hold a conference call and
webcast at 9:00 a.m. MDT (11:00 a.m. EDT) today, May 3, 2024, to
discuss our first quarter 2024 results. The call will begin with an
address by John Kousinioris, President and Chief Executive Officer,
and Todd Stack, Executive Vice President, Finance and Chief
Financial Officer, followed by a question and answer period for
investment analysts and investors. A question and answer period for
the media will immediately follow.
First Quarter 2024 Conference
Call
Webcast link:
https://edge.media-server.com/mmc/p/bs6yync3
A link to the live webcast will be available on
the Investor Centre section of TransAlta’s website at
https://transalta.com/investors/presentations-and-events/. To
access the conference call via telephone, please register ahead of
time using the call link here:
https://register.vevent.com/register/BIae6c878522b348aca5e96eabffd10dd6.
Once registered, participants will have the option of 1) dialing
into the call from their phone (via a personalized PIN); or 2)
clicking the “Call Me” option to receive an automated call directly
to their phone.
Related materials will be available on the
Investor Centre section of TransAlta’s website at
https://transalta.com/investors/presentations-and-events/. If you
are unable to participate in the call, the replay will be
accessible at https://edge.media-server.com/mmc/p/bs6yync3. A
transcript of the broadcast will be posted on TransAlta’s website
once it becomes available.
Notes
(1) These items are not defined and have no
standardized meaning under IFRS. Presenting these items from period
to period provides management and investors with the ability to
evaluate earnings (loss) trends more readily in comparison with
prior periods’ results. Please refer to the Non-IFRS Measures
section of this earnings release for further discussion of these
items, including, where applicable, reconciliations to measures
calculated in accordance with IFRS.(2) Funds from operations
("FFO") per share and free cash flow ("FCF") per share are
calculated using the weighted average number of common
shares outstanding during the period. Refer to the Additional
IFRS Measures and Non-IFRS Measures section of the MD&A for the
purpose of these non-IFRS ratios.
Non-IFRS financial measures and other specified
financial measures
We use a number of financial measures to
evaluate our performance and the performance of our business
segments, including measures and ratios that are presented on a
non-IFRS basis, as described below. Unless otherwise indicated, all
amounts are in Canadian dollars and have been derived from our
unaudited interim condensed consolidated financial statements
prepared in accordance with IFRS. We believe that these non-IFRS
amounts, measures and ratios, read together with our IFRS amounts,
provide readers with a better understanding of how management
assesses results.
Non-IFRS amounts, measures and ratios do not
have standardized meanings under IFRS. They are unlikely to be
comparable to similar measures presented by other companies and
should not be viewed in isolation from, as an alternative to, or
more meaningful than, our IFRS results.
Adjusted EBITDA
Each business segment assumes responsibility for
its operating results measured by adjusted EBITDA. Adjusted EBITDA
is an important metric for management that represents our core
operational results. Interest, taxes, depreciation and amortization
are not included, as differences in accounting treatments may
distort our core business results. In addition, certain
reclassifications and adjustments are made to better assess
results, excluding those items that may not be reflective of
ongoing business performance. This presentation may facilitate the
readers' analysis of trends.
Funds From Operations ("FFO")
FFO is an important metric as it provides a
proxy for cash generated from operating activities before changes
in working capital and provides the ability to evaluate cash flow
trends in comparison with results from prior periods. FFO is a
non-IFRS measure.
Free Cash Flow ("FCF")
FCF is an important metric as it represents the
amount of cash that is available to invest in growth initiatives,
make scheduled principal repayments on debt, repay maturing debt,
pay common share dividends or repurchase common shares. Changes in
working capital are excluded so FFO and FCF are not distorted by
changes that we consider temporary in nature, reflecting, among
other things, the impact of seasonal factors and timing of receipts
and payments. FCF is a non-IFRS measure.
Non-IFRS Ratios
FFO per share, FCF per share and adjusted net
debt to adjusted EBITDA are non-IFRS ratios that are presented in
the MD&A. Refer to the Reconciliation of Cash Flow from
Operations to FFO and FCF and Key Non-IFRS Financial Ratios
sections of the MD&A for additional information.
FFO per share and FCF per share
FFO per share and FCF per share are calculated
using the weighted average number of common shares outstanding
during the period. FFO per share and FCF per share are non-IFRS
ratios.
Reconciliation of these non-IFRS financial
measures to the most comparable IFRS measure are provided
below.
Reconciliation of Non-IFRS Measures on a Consolidated
Basis
The following table reflects adjusted EBITDA by
segment and provides reconciliation to earnings before income taxes
for the three months ended March 31, 2024:
|
Three months ended March 31, 2024millions |
Hydro |
Wind &Solar(1) |
Gas |
EnergyTransition |
EnergyMarketing |
Corporate |
Total |
Equity-accountedinvestments(1) |
Reclassadjustments |
IFRSfinancials |
|
Revenues |
112 |
|
139 |
|
433 |
|
217 |
|
52 |
|
— |
|
953 |
|
(6 |
) |
— |
|
947 |
|
| Reclassifications
and adjustments: |
|
|
|
|
|
|
|
|
|
|
Unrealized mark-to-market gain |
(5 |
) |
(21 |
) |
(91 |
) |
(6 |
) |
(3 |
) |
— |
|
(126 |
) |
— |
|
126 |
|
— |
|
|
Realized gain (loss) on closed exchange positions |
— |
|
— |
|
8 |
|
(1 |
) |
(19 |
) |
— |
|
(12 |
) |
— |
|
12 |
|
— |
|
|
Decrease in finance lease receivable |
— |
|
1 |
|
4 |
|
— |
|
— |
|
— |
|
5 |
|
— |
|
(5 |
) |
— |
|
|
Finance lease income |
— |
|
1 |
|
1 |
|
— |
|
— |
|
— |
|
2 |
|
— |
|
(2 |
) |
— |
|
|
Unrealized foreign exchange gain on commodity |
— |
|
— |
|
(1 |
) |
— |
|
— |
|
— |
|
(1 |
) |
— |
|
1 |
|
— |
|
|
Adjusted revenues |
107 |
|
120 |
|
354 |
|
210 |
|
30 |
|
— |
|
821 |
|
(6 |
) |
132 |
|
947 |
|
| Fuel and purchased power |
6 |
|
9 |
|
142 |
|
166 |
|
— |
|
— |
|
323 |
|
— |
|
— |
|
323 |
|
| Reclassifications
and adjustments: |
|
|
|
|
|
|
|
|
|
|
Australian interest income |
— |
|
— |
|
(1 |
) |
— |
|
— |
|
— |
|
(1 |
) |
— |
|
1 |
|
— |
|
|
Adjusted fuel and purchased power |
6 |
|
9 |
|
141 |
|
166 |
|
— |
|
— |
|
322 |
|
— |
|
1 |
|
323 |
|
| Carbon
compliance |
— |
|
— |
|
40 |
|
— |
|
— |
|
— |
|
40 |
|
— |
|
— |
|
40 |
|
|
Gross margin |
101 |
|
111 |
|
173 |
|
44 |
|
30 |
|
— |
|
459 |
|
(6 |
) |
131 |
|
584 |
|
|
OM&A |
13 |
|
20 |
|
46 |
|
18 |
|
10 |
|
28 |
|
135 |
|
(1 |
) |
— |
|
134 |
|
| Taxes, other than
income taxes |
1 |
|
4 |
|
3 |
|
— |
|
— |
|
— |
|
8 |
|
— |
|
— |
|
8 |
|
| Net other operating
income |
— |
|
(2 |
) |
(10 |
) |
— |
|
— |
|
— |
|
(12 |
) |
— |
|
— |
|
(12 |
) |
|
Adjusted EBITDA(2) |
87 |
|
89 |
|
134 |
|
26 |
|
20 |
|
(28 |
) |
328 |
|
|
|
|
|
Equity income |
|
|
|
|
|
|
|
|
|
1 |
|
| Finance lease income |
|
|
|
|
|
|
|
|
|
2 |
|
| Depreciation and
amortization |
|
|
|
|
|
|
|
|
|
(124 |
) |
| Asset impairment
reversals |
|
|
|
|
|
|
|
|
|
(1 |
) |
| Interest income |
|
|
|
|
|
|
|
|
|
7 |
|
| Interest expense |
|
|
|
|
|
|
|
|
|
(69 |
) |
| Foreign
exchange loss and other |
|
|
|
|
|
|
|
|
|
(3 |
) |
|
Earnings before income taxes |
|
|
|
|
|
|
|
|
|
267 |
|
(1) The Skookumchuck wind facility has been
included on a proportionate basis in the Wind and Solar
segment.
(2) Adjusted EBITDA is not defined and has no
standardized meaning under IFRS. Refer to the non-IFRS financial
measures and other specified financial measures section in this
earnings release.
The following table reflects adjusted EBITDA by
segment and provides reconciliation to earnings before income taxes
for the three months ended March 31, 2023:
|
Three months ended March 31, 2024 millions |
Hydro |
Wind &Solar(1) |
Gas |
EnergyTransition |
EnergyMarketing |
Corporate |
Total |
Equity-accountedinvestments(1) |
Reclassadjustments |
IFRSfinancials |
|
Revenues |
125 |
|
115 |
|
495 |
|
267 |
|
92 |
|
— |
|
1,094 |
|
(5 |
) |
— |
|
1,089 |
|
| Reclassifications
and adjustments: |
|
|
|
|
|
|
|
|
|
|
Unrealized mark-to-market (gain) loss |
(1 |
) |
— |
|
(64 |
) |
(14 |
) |
16 |
|
— |
|
(63 |
) |
— |
|
63 |
|
— |
|
|
Realized gain (loss) on closed exchange positions |
— |
|
— |
|
(13 |
) |
— |
|
(55 |
) |
— |
|
(68 |
) |
— |
|
68 |
|
— |
|
|
Decrease in finance lease receivable |
— |
|
— |
|
13 |
|
— |
|
— |
|
— |
|
13 |
|
— |
|
(13 |
) |
— |
|
|
Finance lease income |
— |
|
— |
|
4 |
|
— |
|
— |
|
— |
|
4 |
|
— |
|
(4 |
) |
— |
|
|
Adjusted revenues |
124 |
|
115 |
|
435 |
|
253 |
|
53 |
|
— |
|
980 |
|
(5 |
) |
114 |
|
1,089 |
|
| Fuel and purchased power |
5 |
|
9 |
|
130 |
|
181 |
|
— |
|
— |
|
325 |
|
— |
|
— |
|
325 |
|
| Reclassifications
and adjustments: |
|
|
|
|
|
|
|
|
|
|
Australian interest income |
— |
|
— |
|
(1 |
) |
— |
|
— |
|
— |
|
(1 |
) |
— |
|
1 |
|
— |
|
|
Adjusted fuel and purchased power |
5 |
|
9 |
|
129 |
|
181 |
|
— |
|
— |
|
324 |
|
— |
|
1 |
|
325 |
|
| Carbon
compliance |
— |
|
— |
|
32 |
|
— |
|
— |
|
— |
|
32 |
|
— |
|
— |
|
32 |
|
|
Gross margin |
119 |
|
106 |
|
274 |
|
72 |
|
53 |
|
— |
|
624 |
|
(5 |
) |
113 |
|
732 |
|
|
OM&A |
12 |
|
17 |
|
41 |
|
17 |
|
14 |
|
24 |
|
125 |
|
(1 |
) |
— |
|
124 |
|
| Taxes, other than
income taxes |
1 |
|
3 |
|
4 |
|
1 |
|
— |
|
— |
|
9 |
|
— |
|
— |
|
9 |
|
| Net other operating
income |
— |
|
(2 |
) |
(11 |
) |
— |
|
— |
|
— |
|
(13 |
) |
— |
|
— |
|
(13 |
) |
|
Adjusted EBITDA(2) |
106 |
|
88 |
|
240 |
|
54 |
|
39 |
|
(24 |
) |
503 |
|
|
|
|
|
Equity income |
|
|
|
|
|
|
|
|
|
2 |
|
| Finance lease income |
|
|
|
|
|
|
|
|
|
4 |
|
| Depreciation and
amortization |
|
|
|
|
|
|
|
|
|
(176 |
) |
| Asset impairment
reversals |
|
|
|
|
|
|
|
|
|
3 |
|
| Interest income |
|
|
|
|
|
|
|
|
|
15 |
|
| Interest expense |
|
|
|
|
|
|
|
|
|
(74 |
) |
| Foreign
exchange loss |
|
|
|
|
|
|
|
|
|
(3 |
) |
|
Earnings before income taxes |
|
|
|
|
|
|
|
|
|
383 |
|
(1) The Skookumchuck wind facility has been
included on a proportionate basis in the Wind and Solar
segment.
(2) Adjusted EBITDA is not defined and has no
standardized meaning under IFRS. Refer to the non-IFRS financial
measures and other specified financial measures section in this
earnings release.
Reconciliation of cash flow from operations to FFO and
FCF
The table below reconciles cash flow from
operating activities to FFO and FCF:
| |
Three months ended |
|
$ millions, unless otherwise stated |
March 31, 2024 |
March 31, 2023 |
|
Cash flow from operating activities(1) |
244 |
|
462 |
|
| Change
in non-cash operating working capital balances |
(7 |
) |
(42 |
) |
|
Cash flow from operations before changes in working
capital |
237 |
|
420 |
|
|
Adjustments |
|
|
|
Share of adjusted FFO from joint venture(1) |
2 |
|
3 |
|
|
Decrease in finance lease receivable |
5 |
|
13 |
|
|
Realized loss on closed exchange positions |
(12 |
) |
(68 |
) |
|
Other(2) |
7 |
|
6 |
|
|
FFO(3) |
239 |
|
374 |
|
|
Deduct: |
|
|
|
Sustaining capital(1) |
1 |
|
(20 |
) |
|
Dividends paid on preferred shares |
(13 |
) |
(13 |
) |
|
Distributions paid to subsidiaries’ non-controlling interests |
(19 |
) |
(76 |
) |
|
Principal payments on lease liabilities |
(1 |
) |
(2 |
) |
|
Other |
(1 |
) |
— |
|
|
FCF(3) |
206 |
|
263 |
|
|
Weighted average number of common shares outstanding in the
period |
308 |
|
268 |
|
|
FFO per share(3) |
0.78 |
|
1.40 |
|
|
FCF per share(3) |
0.67 |
|
0.98 |
|
(1) Includes our share of amounts for
Skookumchuck, an equity-accounted joint venture.(2) Other
consists of production tax credits, which is a reduction to tax
equity debt, less distributions from the equity-accounted
joint venture. (3) These items are not defined and have
no standardized meaning under IFRS. Refer to the non-IFRS Measures
section in this earnings release.The table below provides a
reconciliation of adjusted EBITDA to FFO and FCF:
| |
Three months ended |
|
$ millions, unless otherwise stated |
March 31, 2024 |
March 31, 2023 |
|
Adjusted EBITDA(1)(4) |
328 |
|
503 |
|
| Provisions |
— |
|
3 |
|
| Net interest expense(2) |
(48 |
) |
(45 |
) |
| Current income tax
expense |
(27 |
) |
(60 |
) |
| Realized foreign exchange
loss |
(8 |
) |
(7 |
) |
| Decommissioning and
restoration costs settled |
(7 |
) |
(7 |
) |
| Other
non-cash items |
1 |
|
(13 |
) |
|
FFO(3)(4) |
239 |
|
374 |
|
|
Deduct: |
|
|
|
Sustaining capital(4) |
1 |
|
(20 |
) |
|
Dividends paid on preferred shares |
(13 |
) |
(13 |
) |
|
Distributions paid to subsidiaries’ non-controlling interests |
(19 |
) |
(76 |
) |
|
Principal payments on lease liabilities |
(1 |
) |
(2 |
) |
|
Other |
(1 |
) |
— |
|
|
FCF(4) |
206 |
|
263 |
|
(1) Adjusted EBITDA is defined in the Additional
IFRS Measures and non-IFRS Measures of this earnings release and
reconciled to earnings (loss) before income taxes above.(2) Net
interest expense includes interest expense for the period less
interest income.(3) These items are not defined and have no
standardized meaning under IFRS. FFO and FCF are defined in the
Non-IFRS financial measures and other specified financial measures
section in this earnings release and reconciled to cash flow from
operating activities above.(4) Includes our share of amounts for
Skookumchuck wind facility, an equity-accounted joint venture.
TransAlta is in the process of filing its
unaudited interim Consolidated Financial Statements and
accompanying notes, as well as the associated Management’s
Discussion & Analysis (“MD&A”). These documents will be
available today on the Investors section of TransAlta’s website at
www.transalta.com or through SEDAR at www.sedarplus.ca.
About TransAlta Corporation
TransAlta owns, operates and develops a diverse
fleet of electrical power generation assets in Canada, the United
States and Australia with a focus on long-term shareholder value.
TransAlta provides municipalities, medium and large industries,
businesses and utility customers with clean, affordable, energy
efficient and reliable power. Today, TransAlta is one of Canada’s
largest producers of wind power and Alberta’s largest producer of
hydroelectric power. For over 112 years, TransAlta has been a
responsible operator and a proud member of the communities where we
operate and where our employees work and live. TransAlta aligns its
corporate goals with the UN Sustainable Development Goals and the
Future-Fit Business Benchmark, which also define sustainable goals
for businesses. Our reporting on climate change management has been
guided by the International Financial Reporting Standards (IFRS) S2
Climate-related Disclosures Standard and the Task Force on
Climate-related Financial Disclosures (TCFD) recommendations.
TransAlta has achieved a 66 per cent reduction in GHG emissions or
21.3 million tonnes CO2e since 2015 and received an upgraded MSCI
ESG rating of AA.
For more information about TransAlta, visit our
web site at transalta.com.
Cautionary Statement Regarding Forward-Looking
Information
This news release contains "forward-looking
information", within the meaning of applicable Canadian securities
laws, and "forward-looking statements", within the meaning of
applicable United States securities laws, including the United
States Private Securities Litigation Reform Act of 1995
(collectively referred to herein as "forward-looking statements").
In some cases, forward-looking statements can be identified by
terminology such as "plans", "expects", "proposed", "will",
"anticipates", "develop", "continue", and similar expressions
suggesting future events or future performance. In particular, this
news release contains, without limitation, statements pertaining
to: the implementation of the Restructured Energy Market in
Alberta; the Company's expectation for power prices and offer
behaviour in the Alberta merchant market and the impact of the
interim regulations on the Company; the Company’s enhanced share
repurchase plans and the allocation of up to $150 million towards
the repurchase of common shares of the Company in 2024; realizing
the benefits of the water-sharing memorandum of understanding with
the Government of Alberta; the Company’s aspirational Clean
Electricity Growth Plan; the expected EBITDA to be generated from
the transfer of PTCs (defined above) from the White Rock and the
Horizon Hill wind projects; the common share dividend level through
2024; and the Company’s 2024 Outlook, including Adjusted EBITDA,
free cash flow, annual dividend per share, as well as expectations
pertaining to future hedge levels, sustaining capital, energy
marketing gross margin, power and gas prices, cash interest and
corporate cash taxes.
The forward-looking statements contained in this
news release are based on many assumptions including, but not
limited to, the following material assumptions: no significant
changes to applicable laws and regulations beyond those that have
already been announced; those assumptions contained in the
Company’s 2024 Outlook, including as it pertains to power and gas
prices and expected hedge levels; no material adverse impacts to
long-term investment and credit markets; no significant changes to
the decommissioning and restoration costs; no significant changes
to the integrity and reliability of our assets; and no significant
changes to the Company's debt and credit ratings. Forward-looking
statements are subject to a number of significant risks, and
uncertainties that could cause actual plans, performance, results
or outcomes to differ materially from current expectations. Factors
that may adversely impact what is expressed or implied by
forward-looking statements contained in this news release include,
risks relating to: fluctuations in power prices, including merchant
pricing in Alberta, Ontario and Mid-Columbia; supply chain
disruptions impacting major maintenance and growth projects;
reductions in production; restricted access to capital and
increased borrowing costs, including any difficulty raising debt,
equity or tax equity, as applicable, on reasonable terms or at all;
labour relations matters, reduced labour availability and the
ability to continue to staff our operations and facilities;
reliance on key personnel; disruptions to our supply chains,
including our ability to secure necessary equipment; force majeure
claims; our ability to obtain regulatory and any other third-party
approvals on the expected timelines or at all in respect of our
growth projects; long term commitments on gas transportation
capacity that may not be fully utilized over time; adverse
financial impacts arising from the Company's hedged positions;
risks associated with development and construction projects,
including as it pertains to real property, disputes with
contractors and potential delays in the construction or
commissioning of such projects; significant fluctuations in the
Canadian dollar against the US dollar and Australian dollar;
changes in short-term and long-term electricity supply and demand;
counterparty credit risk and a higher rate of losses on our
accounts receivables; impairments and/or write-downs of assets;
adverse impacts on our information technology systems and our
internal control systems, including cybersecurity threats;
commodity risk management and energy trading risks, including the
effectiveness of the Company’s risk management tools associated
with hedging and trading procedures to protect against significant
losses; an inability to contract our generation for prices that
will provide expected returns and to replace contracts as they
expire; changes to the legislative, regulatory and political
environments in the jurisdictions in which we operate;
environmental requirements and changes in, or liabilities under,
these requirements; disruptions in the transmission and
distribution of electricity; the effects of weather, including
man-made or natural disasters, and climate-change related risks;
increases in costs; reductions to our generating units’ relative
efficiency or capacity factors; disruptions in the source of fuels,
including natural gas, coal, water, solar, or wind resources
required to operate our facilities; any inability to receive all
required regulatory approvals for the acquisition of Heartland
Generation Ltd. and the risk that the closing of such transaction
could be delayed or not occur; failure to meet financial
expectations, including any failure to meet our 2024 Outlook;
general domestic and international economic and political
developments, including armed hostilities, the threat of terrorism,
adverse diplomatic developments or other similar events; equipment
failure and our ability to carry out or have completed the repairs
in a cost-effective and timely manner or at all; industry risk and
competition in the business in which we operate; structural
subordination of securities; inadequacy or unavailability of
insurance coverage; our provision for income taxes and any risk of
reassessment; and legal, regulatory and contractual disputes and
proceedings involving the Company; and other risks and
uncertainties discussed in the Company's materials filed with the
securities regulatory authorities from time to time and as also set
forth in the Company's Management Discussion and Analysis and
Annual Information Form for the year ended Dec. 31, 2023. Readers
are urged to consider these factors carefully in evaluating the
forward-looking statements, which reflect the Company's
expectations only as of the date hereof and are cautioned not to
place undue reliance on them. The purpose of the financial outlooks
contained herein is to give the reader information about
management's current expectations and plans and readers are
cautioned that such information may not be appropriate for other
purposes. The forward-looking statements included in this document
are made only as of the date hereof and we do not undertake to
publicly update these forward-looking statements to reflect new
information, future events or otherwise, except as required by
applicable laws.
Note: All financial figures are in Canadian
dollars unless otherwise indicated.
For more information:
|
Investor Inquiries: |
Media Inquiries: |
| Phone: 1-800-387-3598 in
Canada and US |
Phone: 1-855-255-9184 |
| Email:
investor_relations@transalta.com |
Email:
ta_media_relations@transalta.com |
TransAlta (NYSE:TAC)
過去 株価チャート
から 4 2024 まで 5 2024
TransAlta (NYSE:TAC)
過去 株価チャート
から 5 2023 まで 5 2024
