TransAlta Corporation (TransAlta or the Company) (TSX:TA) (NYSE:TAC) today announced that it has changed the date and location of its 2019 Annual and Special Meeting of Shareholders (the Meeting) to 10:30 a.m. on April 26, 2019 to be held at the TELUS Convention Centre, North Building, Room 104, Calgary Alberta. The record date for the Meeting remains unchanged at close of business on March 7, 2019. Under TransAlta’s Advance Notice Bylaw, it is also extending the director nomination deadline for the Meeting to March 25, 2019.
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. We provide municipalities, medium and large industries, businesses and utility customers clean, affordable, energy efficient, and reliable power. Today, we are one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business.
For more information about TransAlta, visit our web site at transalta.com.
Funds from Operations of $217 million or $0.76 per share was consistent with 2017
Free Cash Flow at $98 million, or $0.34 per share
Consistent financial performance to 2017
Full Year 2018 Highlights
Funds from Operations up 15% to $927 million, or $3.23 per share
Free Cash Flow up 60% to $524 million, or $1.83 per share
FFO / Debt ratio continues to be within our target range of greater than 20 per cent
TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) today reported strong financial and operating performance for 2018, including the highest free cash flow (FCF) in recent years. During the year, the Company successfully executed on its strategy to advance the coal-to-gas conversions, further strengthened its balance sheet, and grew TransAlta Renewables.
Financial results for the full year 2018 delivered FCF of $524 million. Funds from operations (FFO) increased 15% to $927 million compared to $804 million in 2017. These metrics include the one-time payment $157 million in the first quarter for the early termination of the Sundance B and C PPAs.
Comparable EBITDA increased six per cent to $1,123 million year-over-year, primarily achieved by strong results in hydro which benefitted from higher market prices for ancillary services and the previously mentioned termination payment. These increases were partially off-set by lower results from the U.S. Coal and Australian Gas segments.
2018 saw strong financial, operational and safety results across TransAlta, thanks to the skill and tenacity of all our people.- said Dawn Farrell, President and Chief Executive Officer. 2019 is an exciting year for us, as we focus on delivering strong financial results for shareholders. Our strategy is simple. We are going to convert coal to gas, realize the full value of our hydro assets, and grow TransAlta Renewables. The execution steps to make this strategy a reality are well known, in place and tracking to our plan.
During 2018, we reduced our net debt by approximately $220 million to $3.1 billion. We continued to restructure our debt profile with the repayment of the US$500 million senior notes and the early redemption of our $400 million debenture due in 2019 with the proceeds from our off-coal bond offering of approximately $345 million. As a result, we are ahead of plan in strengthening our balance sheet.
2019 Key Priorities
TransAlta is on-track to meet the financial targets defined in its outlook with a continued focus on strengthening the balance sheet, ensuring the value of the Alberta portfolio is realized, and making strategic investments in renewables. At the same time, a key priority for the team is to move the Company closer to 100% clean power by 2025.
The Company intends to:
Be a leader in safety and environmental performance;
Compete in the future Alberta market by converting Alberta coal units to gas generation;
Evaluate strategic investments in renewable assets;
Realize the full value of its hydro assets;
Achieve financial and operational targets; and
Drive additional efficiencies throughout the organization.
Fourth Quarter Highlights
Exercised option to acquire a 50 per cent ownership in the Pioneer Pipeline connecting Tidewater Midstream and Infrastructure Ltd.’s Brazeau River complex to TransAlta’s generating units at Sundance and Keephills.
207 MW Windrise Wind Project was selected by the Alberta Electric System Operator as one of the two successful projects in the Renewable Electricity Program.
Announced the appointment of Christophe Dehout to Chief Financial Officer. Dehout brings broad experience in power generation and extensive knowledge of capital markets, mergers and acquisitions, corporate finance and corporate transformations.
TransAlta Renewables announced that the 17.25 MW expansion of the Kent Hills Wind Facility was fully operational, bringing total installed capacity at the site to 167 MW.
Important Subsequent Events
On January 25, 2019, the Company announced the retirement decisions of Timothy Faithfull and Ambassador Gordon Giffin. Earlier in 2018, Mr. Faithfull had indicated to the Board his intention to retire from the Board of Directors immediately following TransAlta’s 2019 Annual Shareholder Meeting and, also in 2018, Ambassador Gordon Giffin announced his intention to retire as director and Board Chair in 2020. The Board is undertaking a process to identify a new Chair through the course of 2019.
Fourth Quarter and Full Year Segmented Comparable EBITDA
(in CAD$ millions)
3 Months Ended
Year Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Canadian Coal
56
66
400
324
U.S. Coal
(1)
21
62
89
Canadian Gas
73
62
259
263
Australian Gas
32
29
124
137
Wind and Solar
72
78
213
214
Hydro
17
14
109
75
Energy Marketing
12
25
43
45
Corporate
(28)
(20)
(87)
(85)
Total Comparable EBITDA
233
275
1,123
1,062
Canadian Coal: Comparable EBITDA for the year ended December 31, 2018 increased $76 million compared to 2017, as a result of the one-time receipt of $157 million for the termination of the Sundance B and C PPAs in the first quarter of 2018, partially offset by higher carbon compliance costs.
U.S. Coal: Comparable EBITDA decreased by $27 million compared to 2017 primarily due to unfavourable changes on unrealized mark-to-market positions.
Canadian Gas: Comparable EBITDA for 2017 included the one-time settlement for the Ontario Electricity Financial Corporation of $34 million related to the indexation dispute. Adjusting for this payment, Comparable EBITDA increased $30 million in 2018 compared to 2017, due to higher realized margins and cost reduction initiatives.
Australian Gas: Comparable EBITDA for the year decreased by $13 million compared to 2017 mainly due to the sale of the Solomon Power Station.
Wind and Solar: Comparable EBITDA for 2018 was flat against 2017, as higher merchant prices in Alberta and insurance proceeds from a tower fire at the Wyoming Wind Farm were offset by the unfavourable impact of the non-cash mark-to-market losses relating to the fair value of the Big Level PPA.
Hydro: Comparable EBITDA for 2018 increased $34 million, or 45%, compared to 2017. Alberta Hydro benefited from a strong price environment and increased ancillary services revenue.
Energy Marketing: Year-over-year Comparable EBITDA was flat.
Corporate: Corporate overhead costs of $87 million were consistent with 2017 as benefits were realized from cost-efficiency initiatives which were offset by one-time transition costs.
Consolidated Financial Highlights
Net loss attributable to common shareholders in 2018 was $248 million ($0.86 net loss per share) compared to net loss of $190 million ($0.66 net earnings per share) in 2017, an increased net loss of more than $58 million. Earnings in 2018 were negatively impacted by higher mine depreciation and carbon compliance costs included in fuel and purchased power, higher impairments, lower finance lease income related to the sale of the Solomon facility, and higher preferred share dividends due to the timing of declarations, partially off-set by the one-time receipt of $157 million for the termination of the Sundance B and C PPAs, and lower income tax expense.
Total sustaining capital expenditures of $168 million were $67 million lower compared to 2017 primarily due to lower planned major maintenance in coal segments. Total capital expenditures of $189 million, which includes productivity capital expenditures, were $70 million lower than 2017 and in-line with our guidance for the year.
Fourth Quarter and Year Ended 2018 Highlights
In $CAD millions, unless otherwise stated
3 Months Ended
Year Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Adjusted availability (%)(2,3)
91.5%
88.4%
91.3%
86.8%
Production (GWh) (3)
8,276
10,374
28,409
36,900
Revenue
622
638
2,249
2,307
Comparable EBITDA (1)
233
275
1,123
1,062
Net Earnings (loss) attributable to common shareholders
(122)
(145)
(248)
(190)
FFO (1)
217
219
927
804
Cash Flow from Operating Activities
132
81
820
626
FCF (1)
98
101
524
328
Net Earnings (loss) per common share
$(0.43)
$(0.50)
$(0.86)
$(0.66)
FFO per share (1)
$0.76
$0.76
$3.23
$2.79
FCF per share (1)
$0.34
$0.35
$1.83
$1.14
Dividends declared per common share
$0.08
$0.04
$0.20
$0.12
TransAlta is in the process of filing its Annual Information Form, Audited 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 transalta.com or through SEDAR at www.sedar.com.
TransAlta will also be filing its Form 40-F with the U.S. Securities and Exchange Commission. The form will be available through their website at www.sec.gov. Paper copies of all documents are available to shareholders free of charge upon request.
Conference call
TransAlta will hold an extended conference call and webcast at 9:00 a.m. MST (11:00 a.m. EST) today, February 27, 2019, to discuss our fourth quarter and full year 2018 results. The call will begin with a short address by Dawn Farrell, President and CEO, Brett Gellner, Chief Strategy and Investment Officer, and Christophe Dehout, 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. Please contact the conference operator five minutes prior to the call, noting TransAlta Corporation as the company and Sally Taylor as moderator.
Dial-in numbers:
Toll-free North American participants call: 1-888-231-8191
Outside of Canada & USA call: 1-647-427-74502
A link to the live webcast will be available on the Investor Centre section of TransAlta’s website at https://transalta.com/powering-investors/events-and-presentations. If you are unable to participate in the call, the instant replay is accessible at 1-855-859-2056 (Canada and USA toll free) with TransAlta pass code 5009309 followed by the # sign. A transcript of the broadcast will be posted on TransAlta’s website once it becomes available.
Notes
(1) These items are not defined under IFRS. Presenting these items from period to period provides management and investors with the ability to evaluate earnings trends more readily in comparison with prior periods results. Refer to the Comparable Funds from Operations and Comparable Free Cash Flow and Earnings and Other Measures on a Comparable Basis sections of the Company’s MD&A for further discussion of these items, including, where applicable, reconciliations to measures calculated in accordance with IFRS.
(2) Availability and production include all generating assets (generation operations and finance leases that we operate).
(3) Adjusted for economic dispatching at U.S. Coal.
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. We provide municipalities, medium and large industries, businesses and utility customers clean, affordable, energy efficient, and reliable power. Today, we are one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business.
For more information about TransAlta, visit our web site at transalta.com.
Cautionary Statement Regarding Forward Looking Information
This news release contains forward looking statements, including statements regarding the business and anticipated financial performance of the Company that are based on the Company’s current expectations, estimates, projections and assumptions in light of its experience and its perception of historical trends. 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 forward looking statements including, without limitation, statements pertaining to TransAlta’s business and anticipated future financial performance; progress on strengthening our balance sheet and meeting our financial targets defined in our outlook; our expected strategies and opportunities, including our strategy to be 100% clean power by 2025; key priorities in 2019 and ability to execute on such priorities, including maintaining ourselves as a leader in safety and environmental performance, extending the value creation of our coal plants by positioning coal-to-gas conversions to compete in the future Alberta market, evaluating strategic investments in renewable assets, continuing to realize the full value of our hydro assets, achieving financial and operational targets, and driving additional efficiencies throughout the organization. These forward-looking statements are not historical facts but are based on TransAlta’s belief and assumptions based on information available at the time the assumptions were made, including, but not limited to, the current political and regulatory environment, the price of power in Alberta and the condition of the finnaical markets. 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 and 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; negative impact to our credit ratings; legislative or regulatory developments and their impacts, including as it pertains to the capacity market being developed in Alberta; increasingly stringent environmental requirements and their impacts; increased competition; global capital markets activity (including our ability to access financing at a reasonable cost); changes in prevailing interest rates; currency exchange rates; inflation levels and commodity prices; general economic conditions in the geographic areas where TransAlta operates; disputes or claims involving TransAlta or TransAlta Renewables, including those pertaining to South Hedland and Solomon Power Stations; and other risks and uncertainties discussed in the Company’s materials filed with the Canadian securities regulatory authorities from time to time and as also set forth in the Company’s MD&A and Annual Information Form for the year ended December 31, 2018. 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. The financial outlook that is contained in this news release was approved on February 27, 2019 and is being provided for the purpose of giving the reader information about management’s current expectations and plans. 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 otherwise indicated.
TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) will release its fourth quarter and full year 2018 results before market open on Wednesday, February 27, 2019. An extended conference call and webcast to discuss the results will be held for investors, analysts, members of the media and other interested parties the same day beginning at 9:00 a.m. MST (11:00 a.m. EST). In addition to the regular quarterly discussion, TransAlta will provide an update on the Company’s priority initiatives. The media will be invited to ask questions following analysts.
Please contact the conference operator five minutes prior to the call, noting TransAlta Corporation as the company and Sally Taylor as moderator.
Dial-in numbers Fourth Quarter and Full Year 2018 Results:
Toll-free North American participants call: 1-888-231-8191
Outside of Canada & USA call: 1-647-427-7450
A link to the live webcast will be available on the Investor Centre section of TransAlta’s website at https://transalta.com/investors/events-and-presentations. If you are unable to participate in the call, the instant replay is accessible at 1-855-859-2056 (Canada and USA toll free) with TransAlta pass code 5009309 followed by the # sign. A transcript of the broadcast will be posted on TransAlta’s website once it becomes available.
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. We provide municipalities, medium and large industries, businesses and utility customers clean, affordable, energy efficient, and reliable power. Today, we are one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business.
For more information about TransAlta, visit our web site at transalta.com.
TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) today announced that Timothy Faithfull has decided to retire from the Board immediately following TransAlta’s 2019 Annual Shareholder Meeting.
The Company also announced that Ambassador Gordon Giffin intends to retire as director and Board Chair next year. The Board is undertaking a process to identify a new Chair though the course of 2019.
On behalf of the Board of Directors, we thank Tim for the wealth of knowledge and expertise he has brought to the board during his tenure,- said Ambassador Giffin. Tim’s insight and perspective of regulatory issues and large development projects has helped TransAlta to navigate the significant challenges of recent years and become a leading clean energy company.
Ambassador Giffin added: As I complete my tenure as Chair, the Board’s priority will be to oversee the final stages of TransAlta’s transformation plan, which, together with our strong team and diverse portfolio of assets, will put TransAlta in a strong position to respond to future clean energy demands and create long-term value for shareholders.
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. We provide municipalities, medium and large industries, businesses and utility customers clean, affordable, energy efficient, and reliable power. Today, we are one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business.
For more information about TransAlta, visit our web site at transalta.com.
TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) announced today an investment in the Tidewater gas pipeline and an investment in a wind project in the Alberta market. The Company also provided its outlook for 2019. In summary, TransAlta will:
exercise its option to acquire 50 percent ownership in the gas pipeline connecting Tidewater Midstream and Infrastructure Ltd.’s (Tidewater) Brazeau River Complex to TransAlta’s generating units at Sundanceand Keephills;
invest $275 million in our 207 MW Windrise wind project, which was selected by the Alberta Electric System Operator (AESO) as one of the two successful projects in the Renewable Electricity Program (REP) Round 3; and
expect to deliver between $270 million and $330 million of free cash flow in 2019.
We are excited to be building a wind project in Alberta with a long-term contract backed by the Alberta government,- said Dawn Farrell, President and Chief Executive Officer. We are also very pleased to be entering into a strong partnership with Tidewater. The Tidewater pipeline, which is currently under construction, is a key building block in our strategy to convert our coal plants to gas and extends their lives well into the 2030s.
Tidewater Pipeline
TransAlta has exercised its option to acquire 50 percent ownership in the Tidewater gas pipeline. Tidewater will construct and operate the 120 km natural gas pipeline, which will have an initial throughput of 130 MMcf/d with the potential to expand to approximately 440 MMcf/d. The pipeline will allow TransAlta to increase the amount of natural gas it co-fires at its Sundance and Keephills coal-fired units, resulting in lower carbon emissions and costs. As well, the pipeline will provide a significant amount of the gas required for the full conversion of the coal units to natural gas. The investment for TransAlta will amount to approximately $90 million. Construction of the pipeline commenced last month and the pipeline is expected to be fully operational by the second half of 2019. TransAlta’s investment is subject to final regulatory approvals.
Alberta Renewable Energy Program Project Windrise
Our 207 MW Windrise wind project was selected by the AESO as one of the two successful projects in the third round of the Renewable Electricity Program. The Windrise facility, which is in the county of Willow Creek, is underpinned by a 20-year Renewable Electricity Support Agreement with the AESO. The project is expected to cost approximately $275 million and is targeted to reach commercial operation during the second quarter of 2021.
The combined annualized EBITDA from these two projects, based on the first full-year of operation, is in the range of $30 million to $40 million.
Outlook
In addition to these growth initiatives, TransAlta also provided its 2019 Outlook.
For 2019, we expect our annual free cash flow (FCF) to be in the range of $270 million to $330 million. This range reflects the expiry of the Mississauga contract, the step down in the Poplar Creek contract, and capacity factors for the Sundance units consistent with 2018 levels. The forecast assumes power prices in Alberta to be in the range of $50/MWh to $60/MWh and assumes the current Alberta Carbon Competitiveness Incentive Regulations remain in place throughout 2019.
The following table provides additional details underlying our guidance:
Measure
Target
Comparable EBITDA(1)
$875 million to $975 million
FCF (1)
$270 million to $330 million
Dividend
$0.16 per share, 14 to 17 percent payout of FCF
Range of key power price assumptions:
Market
Power Prices ($/MWh)
Alberta Spot
$50 to $60
Alberta Contracted
$50 to $55
Mid-C Spot (US$)
$20 to $25
Mid-C Contracted (US$)
$47 to $53
Other assumptions relevant to 2019 outlook:
Sustaining Capital
$160 million to $190 million
Productivity Capital
$10 million to $15 million
Sundance coal capacity factor
30%
Hydro/Wind Resource
Long term average
(1) These items are not defined under IFRS. Presenting these items provides management and investors with the ability to evaluate earnings trends more readily in comparison with prior periods results. Refer to the Free Cash Flow, Discussion of Segmented Comparable Results, and Earnings and Other Measures on a Comparable Basis sections of TransAlta’s 2018 third quarter management discussion and analysis for additional information.
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. We provide municipalities, medium and large industries, businesses and utility customers clean, affordable, energy efficient, and reliable power. Today, we are one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business.
For more information about TransAlta, visit our web site at transalta.com.
Forward-Looking Statements
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words expect, anticipate, continue, estimate, may, will, project, should, propose, plans, intends and similar expressions are intended to identify forward-looking information or statements. More particularly, and without limitation, this news release contains forward-looking statements and information relating to: the exercise of the option to acquire 50 percent ownership in the Tidewater gas pipeline, and the receipt of all necessary regulatory approvals in connection with the exercise of such option; the investment of $275 million in our 207 MW Windrise wind project;the 2019 outlook, including the 2019 expected annual Comparable EBITDA, FCF and dividend, Alberta and Mid-C power prices, sustaining capital, productivity capital, coal capacity factor and hydro and wind resources. 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: legislative or regulatory developments, including as it pertains to the Alberta capacity market; the Federal and/or Provincial governments not implementing legislation or regulations facilitating the conversion from coal generation to gas generation; the Federal and/or Provincial governments adopting different carbon prices rules; changes in economic and competitive conditions; inability to secure natural gas supply and the construction of a natural gas pipeline on terms satisfactory to the Company; increased construction costs or construction delays; the introduction of disruptive sources of energy or capacity; changes in the price for natural gas and electricity, including expected pricing in Alberta and Mid-C; decreased demand for energy or capacity; Canadian coal capacity factors and hydro and wind resources being lower than expected; availability of financing; and other risk factors contained in the Company’s annual information form and management’s discussion and analysis. Readers are cautioned not to place undue reliance on these forward-looking statements or forward-looking information, which reflect TransAlta’s expectations only as of the date of this news release. The purpose of the financial outlooks contained in this news release are 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. 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 otherwise indicated.
The Board of Directors of TransAlta Corporation (TSX: TA) (NYSE: TAC) today declared a quarterly dividend of $0.04 per common share payable on April 1, 2019 to shareholders of record at the close of business on March 1, 2019.
The Board of Directors also declared the following quarterly dividend on its Cumulative Redeemable Rate Reset First Preferred Shares for the period starting from and including December 31, 2018 up to but excluding March 31, 2019:
Preferred Shares
TSX Stock Symbol
Dividend Rate
Dividend Per Share
Record Date
Payment Date
Series A
TA.PR.D
2.709%
$0.16931
March 1, 2019
March 31, 2019
Series B*
TA.PR.E
3.743%
$0.23073
March 1, 2019
March 31, 2019
Series C
TA.PR.F
4.027%
$0.25169
March 1, 2019
March 31, 2019
Series E
TA.PR.H
5.194%
$0.32463
March 1, 2019
March 31, 2019
Series G
TA.PR.J
5.300%
$0.33125
March 1, 2019
March 31, 2019
*Please note the quarterly floating rate on the Series B Preferred Shares will be reset every quarter.
All currency is expressed in Canadian dollars except where noted. When the dividend payment date falls on a weekend or holiday, the payment is made the following business day.
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. We provide municipalities, medium and large industries, businesses and utility customers clean, affordable, energy efficient, and reliable power. Today, we are one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business.
For more information about TransAlta, visit our web site at transalta.com.
TransAlta Corporation (TransAlta or the Company) (TSX: TA, NYSE: TAC) today announced the appointment of Christophe Dehout to Chief Financial Officer. Effective immediately, he will replace Brett Gellner, who will continue to serve as Chief Strategy and Investment Officer of TransAlta.
Mr. Dehout brings broad experience in power generation and extensive knowledge of capital markets, mergers and acquisitions, corporate finance and corporate transformations. Most recently Mr. Dehout was at Engie SA as Project Director and Deputy Head of Performance and Group Transformation where he contributed to the successful closing of the transfer of Engie’s LNG division to Total SA. Prior to that, Mr. Dehout held increasingly senior roles at Engie where he saw first-hand the conversion of coal and gas power generation to renewables.
We are excited that Christophe has joined the TransAlta team as our new Chief Financial Officer,- said Dawn Farrell, President and Chief Executive Officer. Christophe brings extensive financial and strategic experience. This, combined with his deep knowledge of the global power market will be pivotal as we transform the company and transition to clean power by 2025.
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. We provide municipalities, medium and large industries, businesses and utility customers clean, affordable, energy efficient, and reliable power. Today, we are one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business.
For more information about TransAlta, visit our web site at transalta.com.
Funds from operations were $204 million, an increase of $8 million over 2017
Free cash flow was $94 million compared to $101 million in 2017
Year-to-Date 2018 Financial and Operating Highlights
Free cash flow increased $199 million to $426 million, compared to the same period last year
Reduced net debt through the early redemption of our $400 million bond due in 2019
Commissioned the Kent Hills wind farm expansion bringing total generating capacity to 167 MW
TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) today reported third quarter 2018 financial results which continued to demonstrate our progress in reducing corporate debt, advancing our transition to clean power generation, and improving operating performance.
On a year-to-date basis, funds from operations(1) of $710 million and free cash flow(1) of $426 million are up $125 million and $199 million, respectively. The increase in funds from operations was primarily driven by the one-time payment in the first quarter for the early termination of the Sundance B and C Power Purchase Arrangements (PPAs). Additionally, the Hydro segment continued to benefit from the increased prices for power and ancillary services in Alberta which resulted in a 50% increase in Comparable EBITDA(1) for the first nine months of the year compared to last year. Lower capital requirements, primarily due to the retirement and mothballing of units at Sundance, benefitted free cash flow during the first nine months of the year.
During the quarter we exercised the early redemption of our $400 million bond due in 2019 with the proceeds from our off-coal bond offering of approximately $345 million which was issued at a significantly lower interest rate. As a result, we are ahead of plan in reducing net debt and strengthening our balance sheet. Our next bond maturity is due in 2020 and we expect to fund the repayment from cash flow.
With one of the strongest balance sheets in the industry, we are well positioned to generate strong cash flows over the long-term and deliver on our strategy to be one hundred per cent clean energy by 2025,- said Dawn Farrell, President and Chief Executive Officer. Consistent with our strategy, we completed the expansion project at the Kent Hills wind farm and announced a collaboration with Microsoft, a leader in the procurement of renewable energy, on our Big Level wind project.
Other Highlights
Retired the previously mothballed Sundance Unit 2 due to its relatively short useful life, small size relative to other units, and the capital required to return the unit to service.
Exercised the early redemption of the outstanding 6.40 per cent debentures due November 2019 for approximately $425 million funded through the proceeds of the July 20, 2018 off-coal bond offering of approximately $345 million at a rate of 4.509 per cent per annum.
Purchased and cancelled 1,907,200 common shares, at an average price of $7.34 per share during the first nine months of the year through our Normal Course Issuer Bid which commenced March 14, 2018.
Subsequent Events
Completed the 17 MW expansion of the Kent Hills wind facility in New Brunswick, bringing total generating capacity of the Kent Hills wind farm to approximately 167 MW.
Announced Microsoft Corp. as the counterparty to the 15-year PPA signed earlier this year for the 90 MW Big Level wind facility under construction in Pennsylvania.
Third Quarter 2018 Review by Segment
Comparable EBITDA (in CAD$ millions)
3 Months Ended
9 Months Ended
Sept. 30, 2018
Sept. 30, 2017
Sept. 30, 2018
Sept. 30, 2017
Canadian Coal
79
82
344 (a)
258
U.S. Coal
18
24
63
68
Canadian Gas
59
56
186
201(b)
Australian Gas
30
45
92
108
Wind and Solar
42
26
141
136
Hydro
26
19
92
61
Energy Marketing
14
12
31
20
Corporate
(19)
(19)
(59)
(65)
Total Comparable EBITDA
249
245
890
787
a) Includes $157 million in compensation from the Balancing Pool for the early termination of the Sundance B and C PPAs.
b) Includes $34 million payment from the OEFC relating to the settlement of an indexation dispute.
Canadian Coal: Excluding the $157 million in compensation from the Balancing Pool for the early termination of the Sundance B and C PPAs, Comparable EBITDA for the three and nine months ended September 30, 2018 decreased $3 million and $71 million respectively, compared to 2017. Gross margin was negatively impacted by the expiry of the Sundance A PPA and the termination of the Sundance B and C PPAs, and higher carbon costs.
S. Coal: Comparable EBITDA decreased $6 million and $5 million, respectively, for the three and nine months ended September 30, 2018 compared to 2017. The reduction in Comparable EBITDA was primarily due to unplanned outages in July and September of 2018.
Canadian Gas: Comparable EBITDA for the three months ended September 30, 2018 increased by $3 million compared to 2017, due to higher realized margins in 2018. On a year-to-date basis, Comparable EBITDA decreased by $15 million, mainly due to the $34 million contract indexation dispute settlement received in 2017, which was partially offset by higher margins received in 2018.
Australian Gas: Comparable EBITDA decreased $15 million and $16 million, respectively, for the three and nine months ended September 30, 2018 compared to 2017, primarily due to the sale of the Solomon Power Station.
Wind and Solar: Comparable EBITDA for the three and nine months ended September 30, 2018 increased by $16 million and $5 million, respectively, compared to 2017, due to higher merchant pricing in Alberta and the receipt of insurance proceed related to Wyoming Wind. Comparable EBITDA for the third quarter also benefited from the recognition of unrealized mark-to-market gains.
Hydro: Comparable EBITDA for the three and nine months ended September 30, 2018 increased $7 million and $31 million, respectively, compared to 2017, primarily due to an increase in revenues from ancillary services at higher market prices, which more than offset the lower generation.
Energy Marketing: For the three and nine months ended September 30, 2018 Comparable EBITDA was higher by $2 million and $11 million, respectively. The quarter over quarter increase in Comparable EBITDA was due to strong results from Western markets, while year-to-date results primarily reflect a return to typical results after weak performance in the first quarter of 2017.
Corporate: Our Corporate overhead costs of $19 million for the third quarter of 2018 were in line with the third quarter of 2017. For the first nine months of 2018, Corporate overhead costs have been reduced by $6 million relative to 2017 due to lower incentive payments and cost reduction initiatives.
Consolidated Earnings Review
The net loss attributable to common shareholders during the third quarter of 2018 was $86 million compared to a net loss of $27 million in 2017. The increased net loss during the quarter was driven by lower operating income, lower finance lease income related to the sale of the Solomon facility, offset by an increase in tax recovery. For the nine months ended September 30, 2018, the net loss was $126 million compared to a loss of $45 million for the same period in 2017. The higher net loss in 2018, compared to 2017, was due primarily to lower operating income, lower finance lease income, and higher taxes.
Sustaining capital invested during the third quarter of 2018 totaled $49 million, an increase of $9 million over the comparable quarter in 2017. Conversely, for the nine months periods ending September 30, 2018, sustaining capital of $112 million was $61 million lower than the comparable periods in 2017. Total capital expenditures for the year are now expected to be in the range of $185 million to $220 million, slightly below our previous guidance of $215 million to $235 million.
Operating Review
Adjusted availability for the three and nine months ended September 30, 2018 were 93.7 per cent and 91.3 per cent, respectively, compared to 86.5 per cent and 86.3 per cent for the same periods in 2017. The increase is primarily due to a reduction in the number of unplanned outages compared to the first half of 2017.
Production for the three and nine months ended September 30, 2018 decreased 2,005 GWh and 6,393 GWh, respectively, compared to 2017, despite higher availability, primarily due to the Sundance units becoming merchant, which resulted in less dispatching.
Third Quarter and YTD 2018 Financial and Operational Highlights
In $CAD millions, unless otherwise stated
3 Months Ended
9 Months Ended
Sept. 30, 2018
Sept. 30, 2017
Sept. 30, 2018
Sept. 30, 2017
Adjusted availability (%)(2,3)
93.7%
86.5%
91.3%
86.3%
Production (GWh) (3)
7,762
9,767
20,133
26,526
Revenue
593
588
1,627
1,669
Comparable EBITDA
249
245
890
787
Net Loss attributable to common shareholders
(86)
(27)
(126)
(45)
Funds from Operations
204
196
710
585
Cash Flow from Operating Activities
159
201
688
545
Free Cash Flow
94
101
426
227
Net Loss per common share attributed to common shareholders
(0.30)
(0.09)
(0.44)
(0.16)
Funds from operations per share
0.71
0.68
2.47
2.03
Free cash flow per share
0.33
0.35
1.48
0.79
Dividends declared per common share
0.04
0.04
0.12
0.08
Notes
(1) These items are not defined under IFRS. Presenting these items from period to period provides management and investors with the ability to evaluate earnings trends more readily in comparison with prior periods results. Refer to the Funds from Operations and Free Cash Flow and Earnings and Other Measures on a Comparable Basis sections of the Company’s MD&A for further discussion of these items, including, where applicable, reconciliations to measures calculated in accordance with IFRS.
(2) Availability and production includes all generating assets (generation operations and finance leases that we operate).
(3) Adjusted for economic dispatching at U.S. Coal.
TransAlta is in the process of filing its 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 transalta.com or through SEDAR at www.sedar.com and EDGAR at www.sec.gov/edgar.shtml.
Conference call
We will hold a conference call and webcast at 8:30 a.m. MST (10:30 a.m. EST) today, October 31, 2018, to discuss our third quarter 2018 results. The call will begin with a short address by Dawn Farrell, President and CEO, and Brett Gellner, 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. Please contact the conference operator five minutes prior to the call, noting TransAlta Corporation as the company and Sally Taylor as moderator.
Dial-in numbers Third Quarter 2018 Results:
Toll-free North American participants call: 1-888-231-8191
Outside of Canada & USA call: 1-647-427-7450
A link to the live webcast will be available on the Investor Centre section of TransAlta’s website at https://transalta.com/investors/events-and-presentations. If you are unable to participate in the call, the instant replay is accessible at 1-855-859-2056 (Canada and USA toll free) with TransAlta pass code 4867286 followed by the # sign. A transcript of the broadcast will be posted on TransAlta’s website once it becomes available.
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. We provide municipalities, medium and large industries, businesses and utility customers clean, affordable, energy efficient, and reliable power. Today, we are one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business.
For more information about TransAlta, visit our web site at transalta.com.
Cautionary Statement Regarding Forward Looking Information
This news release contains forward looking statements, including statements regarding the business and anticipated financial performance of the Company that are based on the Company’s current expectations, estimates, projections and assumptions in light of its experience and its perception of historical trends. 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 forward looking statements including, without limitation, statements pertaining to TransAlta’s business and anticipated future financial performance; our strategy, including as it relates to increasing free cash flow, improving operating performance, reducing corporate debt and strengthening our balance sheet; funding the repayment of the next bond maturity in 2020 with cash flow; executing on growth strategies; completing the construction of the Big Level wind project; and advancing the transition to clean power generation. These forward-looking statements are not historical facts but 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 and 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; negative impact to our credit ratings; legislative or regulatory developments and their impacts, including as it pertains to the capacity market being developed in Alberta; increasingly stringent environmental requirements and their impacts; increased competition; global capital markets activity (including our ability to access financing at a reasonable cost); changes in prevailing interest rates; currency exchange rates; inflation levels and commodity prices; general economic conditions in the geographic areas where TransAlta operates; disputes or claims involving TransAlta or TransAlta Renewables, including those pertaining to South Hedland; and other risks and uncertainties discussed in the Company’s materials filed with the Canadian securities regulatory authorities from time to time and as also set forth in the Company’s MD&A and Annual Information Form for the year ended December 31, 2017. 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.
The Board of Directors of TransAlta Corporation (TSX: TA) (NYSE: TAC) today declared a quarterly dividend of $0.04 per common share payable on January 1, 2019 to shareholders of record at the close of business on December 3, 2018.
The Board of Directors also declared the following quarterly dividend on its Cumulative Redeemable Rate Reset First Preferred Shares for the period starting from and including September 30, 2018 up to but excluding December 31, 2018:
Preferred Shares
TSX Stock Symbol
Dividend Rate
Dividend Per Share
Record Date
Payment Date
Series A
TA.PR.D
2.709%
$0.16931
December 3, 2018
December 31, 2018
Series B*
TA.PR.E
3.539%
$0.22301
December 3, 2018
December 31, 2018
Series C
TA.PR.F
4.027%
$0.25169
December 3, 2018
December 31, 2018
Series E
TA.PR.H
5.194%
$0.32463
December 3, 2018
December 31, 2018
Series G
TA.PR.J
5.300%
$0.33125
December 3, 2018
December 31, 2018
*Please note the quarterly floating rate on the Series B Preferred Shares will be reset every quarter.
All currency is expressed in Canadian dollars except where noted. When the dividend payment date falls on a weekend or holiday, the payment is made the following business day.
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. We provide municipalities, medium and large industries, businesses and utility customers clean, affordable, energy efficient, and reliable power. Today, we are one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business.
For more information about TransAlta, visit our web site at transalta.com.
TransAlta Corporation (TransAlta) (TSX: TA) (NYSE: TAC) will release its third quarter 2018 results before market open on Wednesday, October 31, 2018. A conference call and webcast to discuss the results will be held for investors, analysts, members of the media and other interested parties the same day at 8:30 a.m. Mountain Time (10:30 a.m. ET). The media will be invited to ask questions following analysts.
Please contact the conference operator five minutes prior to the call, noting TransAlta Corporation as the company and Sally Taylor as moderator.
Dial-in numbers Q3 2018 Results:
Toll-free North American participants call: 1-888-231-8191
Outside of Canada & USA call: 1-647-427-7450
A link to the live webcast will be available on the Investor Centre section of TransAlta’s website at transalta.com/investors/events-and-presentations. If you are unable to participate in the call, the instant replay is accessible at 1-855-859-2056 (Canada and USA toll free) with TransAlta pass code 4867286 followed by the # sign. A transcript of the broadcast will be posted on TransAlta’s website once it becomes available.
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. We provide municipalities, medium and large industries, businesses and utility customers clean, affordable, energy efficient, and reliable power. Today, we are one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business.
For more information about TransAlta, visit our web site at transalta.com.
