TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) today reported its financial results for the first quarter ended March 31, 2025.
“Our business delivered strong operational performance across the fleet during the first quarter. While the Company’s merchant portfolio in Alberta was partially impacted by softer power prices, our hedging strategy and active asset optimization continued to generate realized prices well above spot prices,” said John Kousinioris, President and Chief Executive Officer of TransAlta.
“We have a unique and diversified generating fleet that is complemented by a highly skilled energy marketing and trading team. Though we are operating within a challenging pricing environment in Alberta, our assets continue to perform well, and we remain confident in our 2025 Outlook,” added Mr. Kousinioris.
“During the quarter, we executed and progressed multiple strategic initiatives. We advanced our growth plan by securing a strategic partnership with Nova Clean Energy, LLC, which grants the Company the exclusive option to purchase late-stage development projects in the western United States. Nova’s team has a successful track record of developing projects across the U.S. and has a development portfolio of over four GW. We continued to advance our data centre strategy in Alberta by moving into the commercialization phase. Negotiations on repowering opportunities at our Centralia facility continue to progress. And, finally, we successfully issued $450 million of medium-term notes and repaid our $400 million term loan that was due later this year, maintaining our financial strength and capital discipline.”
First Quarter 2025 Highlights
- Achieved strong operational availability of 94.9 per cent in 2025, compared to 92.3 per cent in 2024
- Adjusted EBITDA(1) of $270 million, compared to $342 million for the same period in 2024
- Free Cash Flow (FCF)(1) of $139 million, or $0.47 per share, compared to $221 million, or $0.72 per share, for the same period in 2024
- Adjusted earnings before income taxes(1) of $28 million, or $0.09 per share, compared to $144 million, or $0.47 per share, for the same period in 2024
- Cash flow from operating activities of $7 million, compared to $244 million from the same period in 2024
- Net earnings attributable to common shareholders(1) of $46 million, or $0.15 per share, compared to $222 million, or $0.72 per share, for the same period in 2024
- Declared quarterly dividend of $0.065 per share common share, an increase of eight per cent
Key Business Developments
Nova Clean Energy, LLC
During the first quarter of 2025, the Company made a strategic investment in Nova Clean Energy, LLC (Nova), a developer of renewable energy projects. The investment includes a US$75 million term loan and US$100 million revolving facility. At closing of the transaction, US$74 million was drawn by Nova under the credit facilities. The outstanding principal under the term loan and the revolving facility bear interest of seven per cent per annum with interest due quarterly. The terms of the term loan and the revolving facility are six and five years, respectively, unless accelerated. The term loan is convertible to a minority equity interest at any time, prior to maturity, at the option of the Company and any remaining unused term loan commitments at the time of conversion would be terminated. This investment provides the Company with the exclusive right to purchase Nova’s late-stage development projects in the western U.S.
Annual Shareholder Meeting
On April 24, 2025 at TransAlta’s Annual and Special Meeting of Shareholders, the Company received strong support on all items of business, including the election of all 11 director nominees, re-appointment of auditors, Say-on-Pay, and approval of the Company’s Amended and Restated Shareholder Rights Plan.
Two directors did not stand for re-election and the Board would like to extend its gratitude to Mr. Harry Goldgut and Ms. Sarah Slusser for their service.
The Company welcomed Mr. Brian Baker to the Board who brings extensive experience in strategic direction, risk management and growth alongside his extensive background in infrastructure.
Mothballing of Sundance 6
As previously communicated, the Company mothballed the Sundance Unit 6 facility on April 1, 2025. The Company initially provided notice to the Alberta Electric System Operator (AESO) on Nov. 4, 2024, that Sundance Unit 6 would be mothballed on April 1, 2025, for a period of up to two years depending on market conditions. TransAlta maintains the flexibility to return the mothballed unit to service when market fundamentals improve or opportunities to contract are secured.
Senior Notes Offering
On March 24, 2025, the Company issued $450 million of senior notes with a fixed annual coupon of 5.625 per cent, maturing on March 24, 2032. The notes are unsecured and rank equally in right of payment with all existing and future senior indebtedness and senior in right of payment to all future subordinated indebtedness. Interest payments on the notes are made semi-annually, on March 24 and Sept. 24, with the first payment commencing Sept. 24, 2025.
On March 25, 2025, the Company repaid its $400 million variable rate term loan facility in advance of the scheduled maturity date of Sept. 7, 2025, with the proceeds received from the $450 million senior notes offering.
Normal Course Issuer Bid (NCIB) and Automatic Securities Purchase Plan (ASPP)
TransAlta remains committed to enhancing shareholder returns through appropriate capital allocation such as share buybacks and its quarterly dividend.
On May 27, 2024, the Company announced that it had received approval from the Toronto Stock Exchange to purchase up to 14 million common shares during the 12-month period that commenced May 31, 2024, and terminates May 31, 2025. Any common shares purchased under the NCIB will be cancelled.
On Feb. 19, 2025 the Company announced it was allocating up to $100 million to be returned to shareholders in the form of share repurchases.
On March 25, 2025, 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: (a) May 8, 2025; (b) the date on which the maximum purchase limits under the ASPP are reached; or (c) the date on which the Company terminates the ASPP in accordance with its terms.
As of May 6, 2025, the Company has purchased and cancelled a total of 1,932,800 common shares, at an average price of $12.42 per common share, for a total cost of $24 million, including taxes.
Declared Increase in Common Share Dividend
On Feb. 19, 2025, the Company’s Board of Directors approved a $0.02 annualized increase to the common share dividend, an eight per cent increase, and declared a dividend of $0.065 per common share payable on July 1, 2025 to shareholders of record at the close of business on June 1, 2025. The quarterly dividend of $0.065 per common share represents an annualized dividend of $0.26 per common share.
First Quarter 2025 Operational and Financial Highlights
| $ millions, unless otherwise stated | Three Months Ended | |
| March 31, 2025 | March 31, 2024 | |
| Operational information | ||
| Availability (%) | 94.9 | 92.3 |
| Production (GWh) | 6,832 | 6,178 |
| Select financial information | ||
| Revenues | 758 | 947 |
| Adjusted EBITDA(1) | 270 | 342 |
| Adjusted earnings before income taxes(1) | 28 | 144 |
| Earnings before income taxes | 49 | 267 |
| Adjusted net earnings after taxes attributable to common shareholders(1) | 30 | 128 |
| Net earnings (loss) attributable to common shareholders | 46 | 222 |
| Cash flows | ||
| Cash flow from operating activities | 7 | 244 |
| Funds from operations(1) | 179 | 254 |
| Free cash flow(1) | 139 | 221 |
| Per share | ||
| Adjusted net earnings attributable to common shareholders per share(1) | 0.10 | 0.41 |
| Net earnings per share attributable to common shareholders, basic and diluted | 0.15 | 0.72 |
| Funds from operations per share(1) | 0.60 | 0.82 |
| FCF per share(1) | 0.47 | 0.72 |
| Dividends declared per common share | 0.07 | — |
| Weighted average number of common shares outstanding | 298 | 308 |
