Welcome!

News Feed Item

TransAlta Reports Second Quarter 2014 Results

CALGARY, ALBERTA -- (Marketwired) -- 07/30/14 -- TransAlta Corporation ("TransAlta") (TSX: TA) (NYSE: TAC) today reported second quarter 2014 Comparable EBITDA(1) of $213 million with strong availability across our entire Generation Segment and improved operational performance at Canadian Coal. Second quarter results are consistent with our expectations to meet our full year EBITDA guidance of $1,015 million to $1,065 million. Comparable EBITDA decreased $34 million compared to the same period last year, primarily due to lower power prices in Alberta which impacted our hydro, wind and gas assets in the province. Power prices in Alberta averaged $42/MWh during the second quarter of 2014 compared to $123/MWh in the same period last year. Our strategy of being highly contracted generally limited the impacts of lower price volatility and lower prices in Alberta in the quarter. FFO(1) decreased $30 million to $154 million compared to the prior year for the same reason. The company also declared its regular quarterly dividend of $0.18 per share.

"Our second quarter financial performance is exactly in line with our business plan for 2014," said Dawn Farrell, President and Chief Executive Officer. "One of our key priorities for 2014 is to restore the performance of our Canadian coal assets and we are seeing improved results year-to-date. Our guidance for the year recognizes much softer pricing in Alberta and remains unchanged."

Recent Strategic Accomplishments

--  Agreed to build and operate an AUD $570 million, 150MW combined cycle
    gas power station in South Hedland, Western Australia. The fully
    contracted power station is expected to be commissioned and delivering
    power to customers in the first half of 2017.
--  Continued development with our joint venture partner on a $178 million
    natural gas pipeline to our Solomon power station. We hold a 43 per cent
    interest in the joint venture. The project is on schedule and within
    budget.
--  Completed the sale of our 50 per cent ownership of CE Generation LLC
    ("CE Gen"), the Blackrock Development Project ("Blackrock"), and
    CalEnergy, LLC ("CalEnergy") for net proceeds of U.S.$188.5 million in
    the quarter.
--  Completed a secondary offering of TransAlta Renewables Inc. ("TransAlta
    Renewables") shares for proceeds of approximately $129 million, net of
    offering costs.
--  Successfully completed an offering of U.S.$400 million of senior notes,
    due in June 2017.
--  At June 30, 2014, our liquidity was approx. $1.5 billion, $587 million
    higher than at the end of 2013.
--  Q2 debt balance of approx. $4.0 billion, down from approx. $4.3 billion
    at the beginning of the year.

Second Quarter Review

----------------------------------------------------------------------------
Comparable EBITDA(1)          3 months    3 months    6 months    6 months
(in CAD$ millions)           ended June  ended June  ended June  ended June
                              30, 2014    30, 2013    30, 2014    30, 2013
----------------------------------------------------------------------------
Generation
----------------------------------------------------------------------------
 Canadian Coal                   83          48          177         146
----------------------------------------------------------------------------
 U.S. Coal                       14          21          31          33
----------------------------------------------------------------------------
 Gas                             69          85          151         169
----------------------------------------------------------------------------
 Wind                            33          46          95          96
----------------------------------------------------------------------------
 Hydro                           20          52          39          76
----------------------------------------------------------------------------
Total Generation                 219         252         493         520
----------------------------------------------------------------------------
Energy Trading                    4          11          53          24
----------------------------------------------------------------------------
Corporate                       (10)        (16)        (23)        (29)
----------------------------------------------------------------------------
Total Comparable EBITDA(1)       213         247         523         515
----------------------------------------------------------------------------

----------------------------------------------------------------------------
FFO(1)                           154         184         392         377
----------------------------------------------------------------------------
Comparable Net Earnings
 (loss) attributable to
 common shareholders(1)         (12)          9          35          41
----------------------------------------------------------------------------

Comparable EBITDA was $213 million down from $247 million for the same period last year due to lower prices in Alberta partially offset by improved performance at Canadian Coal.

FFO also came in lower for the quarter at $154 million, down from $184 million for the same period last year. The decrease in FFO is primarily due to lower comparable EBITDA.

The company reported a comparable net loss for the quarter of $12 million ($(0.04)) per share), down from comparable earnings of $9 million ($0.03 per share) in the same period last year. The per share loss was driven by lower comparable EBITDA net of taxes.

Adjusted availability(2) for the quarter was 85.4%, which is higher than the availability over the same period last year and brings year-to-date adjusted availability to 88.4%, in line with our full year availability target range of 88-90%. Total sustaining capital expenditures are $171 million year-to-date and we are on track to be within our 2014 target range of $335 - $365 million. We have completed all of the planned coal outages that were scheduled for 2014 on units we are operating.

Generation

--  Canadian Coal: Comparable EBITDA increased to $83 million in the second
    quarter and $177 million year-to-date compared to $48 million and $146
    million, respectively, for the same periods in 2013. The improvement
    period over period is due to higher availability. In 2013, our results
    were impacted by the settlement and buy back of existing financial
    contracts at higher prices due to lower than expected generation during
    unplanned outages. Canadian Coal was not significantly impacted by the
    much lower average second quarter and year-to-date prices in Alberta due
    the PPAs and long-term hedges in place for most of our capacity.

--  U.S. Coal: Comparable EBITDA was $14 million in the second quarter
    compared to $21 million for the same period in 2013. Results in 2013
    were positively impacted by higher priced hedge contracts.

--  Gas: Comparable EBITDA was $69 million in the second quarter and $151
    million year-to-date compared to $85 million and $169 million,
    respectively, for the same periods in 2013. The decrease in comparable
    EBITDA is primarily due to lower Alberta prices impacting results from
    the Poplar Creek facility and the effects of the new contract at Ottawa.

--  Wind: Comparable EBITDA was $33 million in the second quarter compared
    to $46 million for the same period in 2013. Lower Alberta prices
    impacted our revenue while production was slightly below 2013 in both
    Western and Eastern Canada. Wyoming Wind contributed 78 gigawatt hours
    ("GWh") during the second quarter, compared to 164 GWh during the first
    quarter. Year-to-date comparable EBITDA for 2014 was down only $1
    million to $95 million compared to 2013, due to lower Alberta prices,
    partially offset by a full six months of operations at New Richmond and
    Wyoming Wind.

--  Hydro: Comparable EBITDA was $20 million in the second quarter and $39
    million in year-to-date compared to $52 million and $76 million,
    respectively, for the same periods in 2013. Lower prices and low price
    volatility in Alberta limited our ability to take advantage of resource
    flexibility to produce electricity during higher priced hours.
    Additionally, lower water resources than in 2013 impacted our second
    quarter and year-to-date results.

Energy Trading

--  After generating substantial comparable EBITDA of $49 million in the
    first quarter of 2014, Energy Trading generated $4 million in the second
    quarter, down $7 million compared to the second quarter of 2013. Lower
    commodity price volatility in Alberta impacted Energy Trading's ability
    to generate gross margin. Results from other markets in which we
    transact were consistent with 2013. Higher operations, maintenance, and
    administration costs resulting from higher corporate cost allocations as
    well as increased compensation costs also impacted Energy Trading's
    results. Year-to-date comparable EBITDA in 2014 was $53 million, up $29
    million from $24 million in the 2013 year-to-date period as a result of
    our ability to optimize our energy marketing assets during the volatile
    market conditions caused by extreme weather events in the northeast
    during the first quarter.

Corporate

--  Our Corporate Segment incurred lower costs in the second quarter of 2014
    of $10 million, compared to $16 million in 2013, and $23 million year-
    to-date 2014 compared to $29 million in the same period in 2013. The
    lower costs resulted from lower provisions for incentive-based
    compensation in the second quarter and a change in allocation of
    overhead costs to our business units.

Recent Events

South Hedland

On July 28 2014, we announced that we agreed to build, own, and operate a 150 MW combined cycle gas power station in South Hedland, Western Australia. The project is estimated to cost approximately AUD$570 million to build, including the cost of acquiring existing balance of plant assets, related infrastructure and transmission access. The development has been fully contracted under 25-year PPAs with Horizon Power; a state owned utility company, and The Pilbara Infrastructure Pty Ltd., a wholly owned subsidiary of Fortescue, a mining company. The project may be expanded to accommodate additional customers at later dates. The power station will supply Horizon Power's customers in the Pilbara region as well as Fortescue's port operations. IHI Engineering Australia has been selected as the contractor to construct the power station. Applications for the relevant work and environmental permits have been submitted and are now in progress. Construction is expected to take place over the next three years and the power station is expected to be commissioned and delivering power to customers in the first half of 2017.

Sale of CE Generation, Blackrock and CalEnergy

On June 12, 2014, we completed the previously announced sale of our 50 per cent ownership of CE Gen, Blackrock, and CalEnergy to MidAmerican Renewables for proceeds of U.S. $200.5 million. The net proceeds received were U.S. $188.5, million after consideration of an equity contribution made by us to CE Gen in May. As a result of the sale, we recognized a pre-tax gain of $1 million in second quarter earnings.

We expect the sale of our 50 per cent interest in the Wailuku Holding Company, LLC, announced in February, 2014, to close in December, 2014.

Reached Agreement with Province on Ghost Reservoir

On June 4, 2014, we announced our agreement with the Alberta Government regarding modifying the operations of the Ghost Reservoir to provide part of a flood mitigation solution. The revised operating pattern of Ghost Reservoir involves holding the reservoir near its minimum low water level (1,189.3 meters) until July 31, approximately six weeks longer than the current operating pattern.

Senior Notes Offering

On June 3, 2014, we completed an offering of U.S.$400 million of senior notes, due in June 2017, that carry a coupon rate of 1.90 per cent, payable semi-annually, at an issue price equal to 99.887 per cent of the principal amount of the notes. The net proceeds from the offering were used to repay borrowings under existing credit facilities and for general corporate purposes.

 The following table depicts key financial results and statistical operating
                                    data:
                       Second Quarter 2014 Highlights

----------------------------------------------------------------------------
                              3 months    3 months    6 months    6 months
  In CAD$ millions, unless   ended June  ended June  ended June  ended June
       otherwise stated       30, 2014    30, 2013    30, 2014    30, 2013
----------------------------------------------------------------------------
    Adjusted Availability
          (%)(2)(3)             85.4        81.8        88.4        86.6
----------------------------------------------------------------------------
      Production (GWh)          9,283       8,110      21,350      18,754
----------------------------------------------------------------------------
           Revenue               491         542        1,266       1,082
----------------------------------------------------------------------------
    Comparable EBITDA(1)         213         247         523         515
----------------------------------------------------------------------------
Reported Net Earnings (loss)
    attributable to common
         shareholders           (50)         15          (1)          4
----------------------------------------------------------------------------
   Comparable Net Earnings
    (loss) attributable to
    common shareholders(1)      (12)          9          35          41
----------------------------------------------------------------------------
  Funds from Operations(1)       154         184         392         377
----------------------------------------------------------------------------
  Cash Flow from Operating
          Activities             51          92          330         348
----------------------------------------------------------------------------
      Free Cash Flow(1)          19          57          158         171
----------------------------------------------------------------------------

----------------------------------------------------------------------------
 Basic and Diluted Earnings
   (loss) per common share     (0.18)       0.06          -         0.02
----------------------------------------------------------------------------
   Comparable Net Earnings
     (loss) per share(1)       (0.04)       0.03        0.13        0.16
----------------------------------------------------------------------------
  Funds from Operations per
           share(1)             0.57        0.70        1.45        1.45
----------------------------------------------------------------------------
 Free Cash Flow per share(1)    0.07        0.22        0.58        0.66
----------------------------------------------------------------------------
  Dividends paid per common
            share               0.18        0.29        0.47        0.58
----------------------------------------------------------------------------

(1) Comparable EBITDA refers to Earnings before interest, taxes,
    depreciation and amortization including finance lease income and
    adjusted for certain other items. FFO refers to Funds from Operations.
    Free Cash Flow refers to Funds from Operations less sustaining capital
    less preferred dividends less non-controlling interest payments.
    Comparable EBITDA, comparable net earnings attributable to common
    shareholders, FFO, free cash flow, comparable earnings per share, funds
    from operations per share, and free cash flow per share are not defined
    under International Financial Reporting Standards ("IFRS"). Presenting
    these measures from period to period provides supplemental information
    to help management and shareholders evaluate earnings and cash flow
    trends in comparison with prior periods' results. Refer to the Non-IFRS
    Measures section of our Management's Discussion and Analysis ("MD&A")
    for further discussion of these items
(2) Adjusted for economic dispatching at Centralia
(3) Availability includes all generating assets (generation operations,
    finance leases, and equity investments).

The complete report for the quarter, including MD&A and unaudited interim financial statements, as well as our quarterly presentation, is available on the Investors section of our website: www.transalta.com.

Conference call

We will hold a conference call and web cast at 8:00 a.m. MT (10:00 a.m. ET) today to discuss our second quarter 2014 results. The call will begin with a short address by Dawn Farrell, President and CEO, and Donald Tremblay, Chief Financial Officer, followed by a question and answer period for investment analysts, investors and other interested parties. A question and answer period for the media will immediately follow. Please contact the conference operator five minutes prior to the call, noting "TransAlta Corporation" as the company and "Brent Ward" as moderator.

Dial-in numbers:

Toll-free North American participants call: 1-800-319-4610

Outside of Canada & USA call: 1-604-638-5340

A link to the live webcast will be available on the Investor Centre section of TransAlta's website at http://www.transalta.com/investor-centre/events-presentations/webcasts-conference-calls. If you are unable to participate in the call, the instant replay will be accessible at 1-800-319-6413 (Canada and USA toll free) or 1-604-638-9010 (Outside of Canada) with TransAlta pass code 2231 followed by the # sign. A transcript of the broadcast will be posted on TransAlta's website once it becomes available.

Note: If using a hands-free phone, lift the handset and press one to ask a question.

TransAlta is a power generation and wholesale marketing company focused on creating long-term shareholder value. TransAlta maintains a low-to-moderate risk profile by operating a highly contracted portfolio of assets in Canada, the United States and Australia. TransAlta's focus is to efficiently operate wind, hydro, natural gas and coal facilities in order to provide customers with a reliable, low-cost source of power. For over 100 years, TransAlta has been a responsible operator and a proud contributor to the communities in which it works and lives. TransAlta has been selected by Sustainalytics as one of Canada's Top 50 Socially Responsible Companies since 2009 and is recognized globally for its leadership on sustainability and corporate responsibility standards by FTSE4Good.

This news release contains forward looking statements including, without limitation, statements regarding the business and anticipated financial performance of TransAlta, the development of the South Hedland power station, the ongoing construction of a natural gas pipeline to our Solomon power station in Australia and the proposed sale of our interest in Wailuku Holding Company, LLC. These statements are based on TransAlta's belief and assumptions based on information available at the time the assumptions were made. These statements are subject to a number of risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements. Some of the factors that could cause such differences include: operational risks involving our facilities, changes in market prices where we operate, unplanned outages at generating facilities and the capital investments required, equipment failure and our ability to carry out repairs in a cost effective manner or timely manner, the effects of weather, disruptions in the source of fuels, water, or wind required to operate our facilities, energy trading risks, failure to obtain necessary regulatory approvals in a timely fashion, legislative or regulatory developments, competition, global capital markets activity, changes in prevailing interest rates, currency exchange rates, inflation levels and commodity prices, general economic conditions in the geographic areas where TransAlta operates and any impediments to the successful completion of the sale of Wailuku Holding Company, LLC, the construction of our natural gas pipeline to our Solomon power station and the construction of the South Hedland power project. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect TransAlta's expectations only as of the date of this news release. TransAlta disclaims any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Note: All financial figures are in Canadian dollars unless noted otherwise.

Contacts:
Investor inquiries:
Brent Ward
Director, Corporate Finance and Investor Relations
Phone: 1-800-387-3598 in Canada and U.S.
Email: [email protected]

Media inquiries:
Stacey Hatcher, Manager, Communications
Cell: 587-216-2242
Toll-free media number: 1-855-255-9184
Alternate local number: 403-267-2540
[email protected]

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Enterprises have taken advantage of IoT to achieve important revenue and cost advantages. What is less apparent is how incumbent enterprises operating at scale have, following success with IoT, built analytic, operations management and software development capabilities - ranging from autonomous vehicles to manageable robotics installations. They have embraced these capabilities as if they were Silicon Valley startups.
DXWorldEXPO LLC announced today that Telecom Reseller has been named "Media Sponsor" of CloudEXPO | DXWorldEXPO 2018 New York, which will take place on November 11-13, 2018 in New York City, NY. Telecom Reseller reports on Unified Communications, UCaaS, BPaaS for enterprise and SMBs. They report extensively on both customer premises based solutions such as IP-PBX as well as cloud based and hosted platforms.
Wooed by the promise of faster innovation, lower TCO, and greater agility, businesses of every shape and size have embraced the cloud at every layer of the IT stack – from apps to file sharing to infrastructure. The typical organization currently uses more than a dozen sanctioned cloud apps and will shift more than half of all workloads to the cloud by 2018. Such cloud investments have delivered measurable benefits. But they’ve also resulted in some unintended side-effects: complexity and risk. ...
By 2021, 500 million sensors are set to be deployed worldwide, nearly 40x as many as exist today. In order to scale fast and keep pace with industry growth, the team at Unacast turned to the public cloud to build the world's largest location data platform with optimal scalability, minimal DevOps, and maximum flexibility. Drawing from his experience with the Google Cloud Platform, VP of Engineering Andreas Heim will speak to the architecture of Unacast's platform and developer-focused processes.
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, will provide an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life ...
"I think DevOps is now a rambunctious teenager – it’s starting to get a mind of its own, wanting to get its own things but it still needs some adult supervision," explained Thomas Hooker, VP of marketing at CollabNet, in this SYS-CON.tv interview at DevOps Summit at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We are still a relatively small software house and we are focusing on certain industries like FinTech, med tech, energy and utilities. We help our customers with their digital transformation," noted Piotr Stawinski, Founder and CEO of EARP Integration, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
Chris Matthieu is the President & CEO of Computes, inc. He brings 30 years of experience in development and launches of disruptive technologies to create new market opportunities as well as enhance enterprise product portfolios with emerging technologies. His most recent venture was Octoblu, a cross-protocol Internet of Things (IoT) mesh network platform, acquired by Citrix. Prior to co-founding Octoblu, Chris was founder of Nodester, an open-source Node.JS PaaS which was acquired by AppFog and ...
The Founder of NostaLab and a member of the Google Health Advisory Board, John is a unique combination of strategic thinker, marketer and entrepreneur. His career was built on the "science of advertising" combining strategy, creativity and marketing for industry-leading results. Combined with his ability to communicate complicated scientific concepts in a way that consumers and scientists alike can appreciate, John is a sought-after speaker for conferences on the forefront of healthcare science,...
"We focus on SAP workloads because they are among the most powerful but somewhat challenging workloads out there to take into public cloud," explained Swen Conrad, CEO of Ocean9, Inc., in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"The Striim platform is a full end-to-end streaming integration and analytics platform that is middleware that covers a lot of different use cases," explained Steve Wilkes, Founder and CTO at Striim, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
The deluge of IoT sensor data collected from connected devices and the powerful AI required to make that data actionable are giving rise to a hybrid ecosystem in which cloud, on-prem and edge processes become interweaved. Attendees will learn how emerging composable infrastructure solutions deliver the adaptive architecture needed to manage this new data reality. Machine learning algorithms can better anticipate data storms and automate resources to support surges, including fully scalable GPU-c...
Predicting the future has never been more challenging - not because of the lack of data but because of the flood of ungoverned and risk laden information. Microsoft states that 2.5 exabytes of data are created every day. Expectations and reliance on data are being pushed to the limits, as demands around hybrid options continue to grow.
Your job is mostly boring. Many of the IT operations tasks you perform on a day-to-day basis are repetitive and dull. Utilizing automation can improve your work life, automating away the drudgery and embracing the passion for technology that got you started in the first place. In this presentation, I'll talk about what automation is, and how to approach implementing it in the context of IT Operations. Ned will discuss keys to success in the long term and include practical real-world examples. Ge...
Dion Hinchcliffe is an internationally recognized digital expert, bestselling book author, frequent keynote speaker, analyst, futurist, and transformation expert based in Washington, DC. He is currently Chief Strategy Officer at the industry-leading digital strategy and online community solutions firm, 7Summits.