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.

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
Addteq is one of the top 10 Platinum Atlassian Experts who specialize in DevOps, custom and continuous integration, automation, plugin development, and consulting for midsize and global firms. Addteq firmly believes that automation is essential for successful software releases. Addteq centers its products and services around this fundamentally unique approach to delivering complete software release management solutions. With a combination of Addteq's services and our extensive list of partners,...
The Internet of Things will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform and how we integrate our thinking to solve complicated problems. In his session at 19th Cloud Expo, Craig Sproule, CEO of Metavine, demonstrated how to move beyond today's coding paradigm and sh...
Tintri VM-aware storage is the simplest for virtualized applications and cloud. Organizations including GE, Toyota, United Healthcare, NASA and 6 of the Fortune 15 have said "No to LUNs." With Tintri they manage only virtual machines, in a fraction of the footprint and at far lower cost than conventional storage. Tintri offers the choice of all-flash or hybrid-flash platform, converged or stand-alone structure and any hypervisor. Rather than obsess with storage, leaders focus on the business app...
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm.
Big Data, cloud, analytics, contextual information, wearable tech, sensors, mobility, and WebRTC: together, these advances have created a perfect storm of technologies that are disrupting and transforming classic communications models and ecosystems. In his session at @ThingsExpo, Erik Perotti, Senior Manager of New Ventures on Plantronics’ Innovation team, provided an overview of this technological shift, including associated business and consumer communications impacts, and opportunities it m...
WebRTC is about the data channel as much as about video and audio conferencing. However, basically all commercial WebRTC applications have been built with a focus on audio and video. The handling of “data” has been limited to text chat and file download – all other data sharing seems to end with screensharing. What is holding back a more intensive use of peer-to-peer data? In her session at @ThingsExpo, Dr Silvia Pfeiffer, WebRTC Applications Team Lead at National ICT Australia, looked at differ...
For organizations that have amassed large sums of software complexity, taking a microservices approach is the first step toward DevOps and continuous improvement / development. Integrating system-level analysis with microservices makes it easier to change and add functionality to applications at any time without the increase of risk. Before you start big transformation projects or a cloud migration, make sure these changes won’t take down your entire organization.
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...
SYS-CON Events announced today that IoT Now has been named “Media Sponsor” of SYS-CON's 20th International Cloud Expo, which will take place on June 6–8, 2017, at the Javits Center in New York City, NY. IoT Now explores the evolving opportunities and challenges facing CSPs, and it passes on some lessons learned from those who have taken the first steps in next-gen IoT services.
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, discussed the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports.
SYS-CON Events announced today that WineSOFT will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Based in Seoul and Irvine, WineSOFT is an innovative software house focusing on internet infrastructure solutions. The venture started as a bootstrap start-up in 2010 by focusing on making the internet faster and more powerful. WineSOFT’s knowledge is based on the expertise of TCP/IP, VPN, SSL, peer-to-peer, mob...
DevOps is being widely accepted (if not fully adopted) as essential in enterprise IT. But as Enterprise DevOps gains maturity, expands scope, and increases velocity, the need for data-driven decisions across teams becomes more acute. DevOps teams in any modern business must wrangle the ‘digital exhaust’ from the delivery toolchain, "pervasive" and "cognitive" computing, APIs and services, mobile devices and applications, the Internet of Things, and now even blockchain.
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, whic...
Have you ever noticed how some IT people seem to lead successful, rewarding, and satisfying lives and careers, while others struggle? IT author and speaker Don Crawley uncovered the five principles that successful IT people use to build satisfying lives and careers and he shares them in this fast-paced, thought-provoking webinar. You'll learn the importance of striking a balance with technical skills and people skills, challenge your pre-existing ideas about IT customer service, and gain new in...
WebRTC sits at the intersection between VoIP and the Web. As such, it poses some interesting challenges for those developing services on top of it, but also for those who need to test and monitor these services. In his session at WebRTC Summit, Tsahi Levent-Levi, co-founder of testRTC, reviewed the various challenges posed by WebRTC when it comes to testing and monitoring and on ways to overcome them.