Media Advisory: TransAlta Annual Meeting of Shareholders and First Quarter 2024 Results and Conference Call
2024 Annual Meeting of TransAlta Corporation Shareholders
On Thursday, April 25, 2024, TransAlta Corporation (TransAlta) (TSX: TA) (NYSE: TAC) will hold its annual meeting of shareholders at 11:00 a.m. Mountain Time (1:00 p.m. ET) in a virtual-only meeting format via live audio webcast (https://web.lumiagm.com/471294222). The management proxy circular (available at https://transalta.com/investors/results-reporting/) provides detailed information about the business of the meeting and the voting process. TransAlta will only conduct the formal business of the meeting and there will not be a management presentation following the formal business of the meeting.
Q1 2024 Earnings Release, Conference Call and Webcast
TransAlta will release its first quarter 2024 results before markets open on Friday, May 3, 2024. 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 beginning at 9:00 a.m. Mountain Time (11:00 a.m. ET). The media will be invited to ask questions following analysts.
To access the conference call via telephone, please register ahead of time using the call link below: https://register.vevent.com/register/BIae6c878522b348aca5e96eabffd10dd6. Once registered, participants will have the option of 1) dialing into the call from their phone (via a personalized PIN); or 2) clicking the Call Me option to receive an automated call directly to their phone.
TransAlta owns, operates and develops a diverse fleet of electrical power generation assets in Canada, the United States and Australia with a focus on long-term shareholder value. TransAlta provides municipalities, medium and large industries, businesses and utility customers with clean, affordable, energy efficient and reliable power. Today, TransAlta is one of Canada’s largest producers of wind power and Alberta’s largest producer of hydroelectric power. For over 112 years, TransAlta has been a responsible operator and a proud member of the communities where we operate and where our employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and the Future-Fit Business Benchmark, which also defines sustainable goals for businesses. Our reporting on climate change management has been guided by the International Financial Reporting Standards (IFRS) S2 Climate-related Disclosures Standard and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. TransAlta has achieved a 66 per cent reduction in GHG emissions or 21.3 million tonnes CO2e since 2015 and received an upgraded MSCI ESG rating of AA.
For more information about TransAlta, visit its website at transalta.com.
Note: All financial figures are in Canadian dollars unless otherwise indicated.
Investor Inquiries: Phone: 1-800-387-3598 in Canada and U.S. Email: [email protected]
Media Inquiries: Toll-free media number: 1-855-255-9184 Email: [email protected]
TransAlta Corporation Enters into Automatic Share Purchase Plan
TransAlta Corporation (“TransAlta” or the “Company”) (TSX: TA) (NYSE: TAC) announced today that it has entered into an automatic share purchase plan (ASPP) with its broker in order to facilitate repurchases of TransAlta’s common shares (Common Shares) under the Company’s previously announced normal course issuer bid (NCIB).
The Company previously announced that it had received approval from the Toronto Stock Exchange (TSX) to purchase up to 14,000,000 of its Common Shares during the 12-month period that commenced May 31, 2023 and terminates May 30, 2024. Purchases under the NCIB may be made through open market transactions on the TSX and any alternative Canadian trading systems on which the Common Shares are traded, based on the prevailing market price. Since January 1, 2024, the Company has purchased 2,710,300 Common Shares at a weighted average price per Common Share of $9.52 for an aggregate value of approximately $25.8 million. Since the beginning of the current NCIB on May 31, 2023, the Company has purchased 4,134,900 at a weighted average price per Common Share of $10.01 for an aggregate value of approximately $41.4 million.
The Company believes that the prevailing price for the Common Shares may not, from time to time, reflect the underlying value of the Common Shares and that the purchase of Common Shares pursuant to the NCIB may be an attractive and appropriate use of available funds relative to other alternatives. The ASPP will facilitate purchases under the NCIB as it will allow for purchases of Common Shares to be made at times when the Company would ordinarily not be permitted to make purchases, whether due to regulatory restriction or customary self-imposed blackout periods. TransAlta is committed to enhancing shareholder returns through appropriate capital allocation such as a share buyback and its quarterly dividend, which are underpinned by the Company’s strong free cash flow position.
Under the ASPP, the Company’s broker may purchase Common Shares from the effective date of the ASPP until the end of the NCIB. The ASPP will facilitate purchases of Common Shares under the NCIB by authorizing the Company’s broker to make purchases at its sole discretion based on parameters set by the Company in accordance with TSX rules, applicable law and the terms of the ASPP. Outside of periods that the Company is restricted from purchasing Common Shares pursuant to insider trading rules or its own internal trading blackout policies, Common Shares may also be purchased based on management’s discretion, in compliance with TSX rules and applicable law.
All purchases of Common Shares made under the ASPP will be included in determining the number of Common Shares purchased under the NCIB. Any Common Shares purchased by the Company pursuant to the NCIB will be cancelled. The Company is not currently in possession of any material undisclosed information in relation to the Company. The ASPP has been pre-cleared by the TSX and will be effective on April 1, 2024.
The ASPP will terminate on the earliest of the date on which: (a) the maximum purchase limits under the ASPP are reached; (b) May 3, 2024; or (c) the Company terminates the ASPP in accordance with its terms.
About TransAlta Corporation:
TransAlta owns, operates and develops a diverse fleet of electrical power generation assets in Canada, the United States and Australia with a focus on long-term shareholder value. TransAlta provides municipalities, medium and large industries, businesses and utility customers with clean, affordable, energy efficient and reliable power. Today, TransAlta is one of Canada’s largest producers of wind power and Alberta’s largest producer of hydroelectric power. For over 112 years, TransAlta has been a responsible operator and a proud member of the communities where we operate and where our employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and the Future-Fit Business Benchmark, which also defines sustainable goals for businesses. Our reporting on climate change management has been guided by the International Financial Reporting Standards (IFRS) S2 Climate-related Disclosures Standard and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. TransAlta has achieved a 66 per cent reduction in GHG emissions or 21.3 million tonnes CO2e since 2015 and received an upgraded MSCI ESG rating of AA.
For more information about TransAlta, visit its website at transalta.com.
Note: All financial figures are in Canadian dollars unless otherwise indicated.
Investor Inquiries: Phone: 1-800-387-3598 in Canada and U.S. Email: [email protected]
Media Inquiries: Toll-free media number: 1-855-255-9184 Email: [email protected]
TransAlta Reports Full Year and Fourth Quarter 2023 Results and Announces Enhanced Share Repurchase Program
TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) today reported its financial results for the fourth quarter and year ended Dec. 31, 2023, which highlight another year of exceptional performance led by strong financial, operational and safety results.
Full Year 2023 Financial Highlights
Key financial guidance and targets increased twice during 2023
Adjusted EBITDA(1) of $1,632 million, compared to $1,634 million from the same period in 2022
Free Cash Flow (“FCF”)(1) of $890 million, or $3.22 per share, compared to $3.55 per share from the same period in 2022
Cash flow from operating activities of $1,464 million, an increase of $587 million from the same period in 2022
Earnings before income taxes of $880 million, an improvement of $527 million from the same period in 2022
Net earnings attributable to common shareholders of $644 million, an increase of $640 million from the same period in 2022
Announced a 9 per cent increase to the common share dividend, representing the fifth consecutive annual dividend increase
Returned $87 million of capital to common shareholders during the year through the buyback of 7.5 million common shares
Fourth Quarter 2023 Financial Highlights
Adjusted EBITDA of $289 million, compared to $541 million for the same period in 2022
FCF of $121 million, or $0.39 per share, compared to $315 million or $1.17 per share for the same period in 2022
Cash flow from operating activities of $310 million, compared to $351 for the same period in 2022
Net loss before income taxes of $35 million, a decrease of $42 million for the same period in 2022
Net loss attributable to common shareholders of $84 million, an increase of $79 million from the same period in 2022
Other Business Highlights and Updates
Announced an enhanced common share repurchase program for 2024 of up to $150 million towards the repurchase of common shares, representing up to 40 per cent of 2024 FCF guidance being returned to shareholders in the form of share repurchases and dividends
Achieved strong safety performance in 2023, including a record annual Total Recordable Injury Frequency of 0.30
Strong operational adjusted availability of 88.8%
Maintained emissions intensity at 0.41 tCO2e/MWh from 2022 levels
Entered into 10-year transfer agreements with an AA- rated customer for the sale of approximately 80 per cent of the expected production tax credits to be generated from the White Rock and Horizon Hill wind facilities
Completed the Kent Hills rehabilitation program in the first quarter of 2024. All 50 turbines have returned to commercial operation
Energization activities are underway at the Horizon Hill and White Rock wind facilities with commercial operations expected to be achieved in the first quarter of 2024
Completion of the Mount Keith 132kV expansion project is expected to be achieved in March 2024. The expansion of the transmission system in Western Australia supports the Northern Goldfields-based operations of BHP Nickel West (BHP)
Achieved commercial operation of the 48 MW Northern Goldfields solar and battery storage project in November 2023. The facilities are fully contracted with BHP for a term of 15 years and are expected to reduce BHP’s emissions by 12 per cent at their Mt. Keith and Leinster operations
Announced updated strategic growth targets to 2028, including adding up to 1.75 GW of new capacity to the Company’s fleet by investing approximately $3.5 billion to develop, construct or acquire new assets through to the end of 2028 to deliver annual EBITDA of approximately $350 million
Entered into a joint development agreement with Hancock Prospecting Pty Ltd. (“Hancock”) to define, develop and operate clean energy solutions
Entered into a definitive share purchase agreement to acquire Heartland Generation and its entire business operations in Alberta and British Columbia for approximately $658 million, subject to closing adjustment
Completed the acquisition of TransAlta Renewables Inc. (“TransAlta Renewables”) for total consideration paid of $1.3 billion, which consisted of $800 million of cash and approximately 46 million common shares
Acquired a 50 per cent interest in the Tent Mountain 320 MW pumped hydro development project
“2023 was another year of exceptional performance for our Company led by record financial and safety results. During the year, we generated strong free cash flow of $3.22 per share, driven by record revenues across our generating fleet. Our dynamic asset optimization and hedging strategies continue to perform well in managing the evolving markets of our operating portfolio, illustrating the value of our growing fleet and the capabilities of our employees,” said Mr. John Kousinioris, President and Chief Executive Officer of TransAlta.
“During the year, we deployed $87 million towards share repurchases which, together with our common share dividends, resulted in the return of $145 million or $0.53 per share in value to shareholders,” added Mr. Kousinioris.
“We are focused on making balanced capital allocation decisions that enhance value for our shareholders and will remain disciplined in executing our ambitious Clean Electricity Growth Plan with a focus on securing appropriate risk-adjusted returns. We will not grow simply for the sake of growth and to meet targets. Given the current market price of our common shares, which we consider to be undervalued, we will look to enhance returns and shareholder value through our dividend and share repurchases in 2024 of up to $150 million.”
“Our generating portfolio continues to perform well and is expected to generate between $1.47 and $1.96 per share of free cash flow in 2024. Our enhanced common share repurchase program and expected dividend payments in 2024 represent up to 40% of our free cash flow guidance to our shareholders.”
“Turning to growth, our Mount Keith transmission expansion, along with our Horizon Hill and White Rock wind facilities, are well into commissioning and we expect all projects to be completed in March 2024. This milestone, coupled with the completion of our Garden Plain wind facility and Northern Goldfields solar and battery storage project, as well as the rehabilitation of Kent Hills, will contribute contracted adjusted EBITDA of approximately $175 million annually. I am also pleased we’ve been able to secure 10-year transfer agreements with an AA- rated customer for the sale of approximately 80 per cent of production tax credits from the White Rock and Horizon Hill wind facilities, providing another stream of contracted revenue from these assets.”
“Strong free cash flow will, over time, continue to fund our transition to a higher proportion of contracted renewables and toward the path of higher share price valuation. As I look forward, there is every reason to believe that our success will continue in 2024 and beyond.”
Key Business Developments
Change to Board of Directors
The Honourable Rona Ambrose has decided that she will not stand for re-election and will retire from the Board of Directors (“the Board”) following the annual shareholder meeting on April 25, 2024. The Board extends its gratitude for her service to the Company. She has been a valuable contributor to the Board since 2017 and we thank her for her leadership and insights during her tenure, especially as Chair of the Governance, Safety and Sustainability Committee of the Board.
Production Tax Credit (“PTC”) Sale Agreements
On Feb. 22, 2024, the Company entered into 10-year transfer agreements with an AA-rated customer for the sale of approximately 80 per cent of the expected PTCs to be generated from the White Rock and Horizon Hill wind projects. The expected annual average EBITDA from these contracts is approximately $57 million (US$43 million).
Normal Course Issuer Bid and Automatic Share Purchase Plan
On Dec. 19, 2023, the Company entered into an Automatic Share Purchase Plan (“ASPP”) in order to facilitate repurchases of TransAlta’s common shares under its Normal Course Issuer Bid (“NCIB”). Under the ASPP, the Company’s broker may purchase common shares from the effective date of the ASPP until the end of the ASPP. All purchases of common shares made under the ASPP will be included in determining the number of common shares purchased under the NCIB. The ASPP will terminate on the earliest of the date on which: (a) the maximum purchase limits under the ASPP are reached; (b) Feb. 24, 2024; or (c) the Company terminates the ASPP in accordance with its terms.
During the year ended Dec. 31, 2023, the Company purchased and cancelled a total of 7,537,500 common shares, at an average price of $11.49 per common share, for a total cost of $87 million.
The NCIB provides the Company with a capital allocation alternative with a view to ensuring long-term shareholder value. The Board and management believe that, from time to time, the market price of the common shares might not be reflective of the underlying value and purchases of common shares for cancellation under the NCIB may provide an opportunity to enhance shareholder value.
Northern Goldfields Solar Achieves Commercial Operation
On Nov. 22, 2023, the Company announced that the 48 MW Northern Goldfields solar and battery storage facilities achieved commercial operation. The facilities consist of the 27 MW Mount Keith solar facility, the 11 MW Leinster solar facility, the 10 MW Leinster battery energy storage system and interconnecting transmission infrastructure, all of which are now integrated into TransAlta’s existing 169 MW Southern Cross Energy North remote network in Western Australia. The facilities are fully contracted to BHP for a term of 15 years and are expected to reduce BHP’s scope 2 emissions at Mount Keith and Leinster by 12 per cent annually.
TransAlta Announces Growth Targets to 2028
On Nov. 21, 2023, the Company held its 2023 Investor Day event and announced it had updated its strategic growth targets to 2028, which strengthens the Company’s commitment to being a leader in clean electricity by delivering customer-centred power solutions. The growth targets include: adding up to 1.75 GW of new capacity to the Company’s fleet by investing approximately $3.5 billion to develop, construct or acquire new assets through to the end of 2028, with a focus on customer-centred renewables and storage through the advancement of its 4.8 GW development pipeline, and expanding this development pipeline to 10 GW by 2028.
TransAlta Declares 9 Per Cent Dividend Increase
On Nov. 21, 2023, the Board approved an annualized $0.02 per share increase, or 9 per cent increase to our common share dividend and declared a dividend of $0.06 per common share to be paid on April 1, 2024. The quarterly dividend of $0.06 per common share represents an annualized dividend of $0.24 per common share.
TransAlta Enters Joint Development Agreement with Hancock
On Nov. 21, 2023, the Company entered into a joint development agreement with Hancock, Australia’s fourth largest iron ore producer. This arrangement will build on TransAlta’s expertise in supplying power to remote mining operations in Western Australia. TransAlta will work collaboratively with Hancock to define and supply behind-the-fence generation solutions for Hancock in the Port Hedland area.
TransAlta to Acquire Heartland Generation from Energy Capital Partners
On Nov. 2, 2023, the Company announced that it had entered into a definitive share purchase agreement with an affiliate of Energy Capital Partners, the parent of Heartland Generation Ltd. and Alberta Power (2000) Ltd. (collectively, “Heartland”), pursuant to which TransAlta will acquire Heartland and its entire business operations in Alberta and British Columbia. The acquisition will add 10 facilities to TransAlta’s fleet, totalling 1,844 MW of new capacity. The transaction is expected to close in the first half of 2024, subject to customary closing conditions, including receipt of regulatory approvals.
The purchase price for the acquisition is $390 million, subject to working capital and other adjustments, as well as the assumption of $268 million of low-cost debt. The Company will finance the transaction using cash on hand and drawing on its credit facilities.
The assets are expected to add approximately $115 million of average annual EBITDA including synergies. Approximately 55 per cent of revenues are under contract with highly creditworthy counterparties, with a weighted-average remaining contract life of 16 years. Corporate pre-tax synergies are expected to exceed $20 million annually.
TransAlta Completes Acquisition of TransAlta Renewables to Simplify Structure and Enhance Strategic Position
On Oct. 5, 2023, the Company completed the acquisition of TransAlta Renewables pursuant to the terms of the previously announced arrangement agreement between the parties (the “Arrangement”). TransAlta acquired all of the outstanding common shares of TransAlta Renewables (“RNW Shares”) not already owned, directly or indirectly, by TransAlta and certain of its affiliates, resulting in TransAlta Renewables becoming a wholly owned subsidiary of the Company. Prior to the Arrangement, TransAlta and its affiliates collectively held 160,398,217 RNW Shares, representing 60.1 per cent of the issued and outstanding RNW Shares, with the remaining 106,510,884 RNW Shares held by TransAlta Renewables shareholders (“RNW Shareholders”) other than TransAlta and its affiliates.
The Arrangement was approved by RNW Shareholders at a special meeting of shareholders held on Sept. 26, 2023, and by the Court of King’s Bench of Alberta on Oct. 4, 2023. The consideration paid totalled $1.3 billion, which consisted of $800 million of cash and approximately 46 million common shares of the Company.
TransAlta Tops Newsweek’s Inaugural List of World’s Most Trustworthy Companies
On Sept. 14, 2023, the Company announced that it ranked first on Newsweek’s inaugural “World’s Most Trustworthy Companies 2023” list for the Energy and Utilities category. The list identifies the top 1,000 companies in 21 countries and across 23 industries. Newsweek’s 2023 World’s Most Trustworthy Companies were chosen based on a holistic approach to evaluating three pillars of public trust customers, investors and employees. The list was compiled based on an extensive survey of over 70,000 participants, gathering 269,000 evaluations of companies that people trust as a customer, as an investor or as an employee.
In August 2023, the Garden Plain wind facility was commissioned adding 130 MW to our gross installed capacity. The facility is fully contracted with Pembina Pipeline Corporation and PepsiCo Canada, with a weighted average contract life of approximately 17 years.
Tent Mountain Pumped Hydro Development Project
On April 24, 2023, the Company acquired a 50 per cent interest in the Tent Mountain Renewable Energy Complex (Tent Mountain), an early-stage 320 MW pumped storage hydro development project located in southwest Alberta, from Evolve Power Ltd. (“Evolve”), formerly known as Montem Resources Limited. The acquisition includes land rights, fixed assets and intellectual property associated with Tent Mountain.
The Company and Evolve own the Tent Mountain project within a special purpose partnership that is jointly managed, with the Company acting as project developer. The partnership is actively seeking an offtake agreement for the energy and environmental attributes that will be generated by the facility.
Year Ended and Fourth Quarter 2023 Highlights
$ millions, unless otherwise stated
Year Ended
Three Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2023
Dec. 31, 2022
Operational information
Adjusted availability (%)
88.8
90.0
86.9
89.5
Production (GWh)
22,029
21,258
5,783
6,005
Select financial information
Revenues
3,355
2,976
624
854
Adjusted EBITDA(1)
1,632
1,634
289
541
Earnings (loss) before income taxes
880
353
(35)
7
Net earnings (loss) attributable to common shareholders
644
4
(84)
(163)
Cash flows
Cash flow from operating activities
1,464
877
310
351
Funds from operations(1)
1,351
1,346
229
459
Free cash flow(1)
890
961
121
315
Per share
Net earnings (loss) per share attributable to common shareholders, basic and diluted
2.33
0.01
(0.27)
(0.61)
Funds from operations per share(1),(2)
4.89
4.97
0.74
1.71
FCF per share(1),(2)
3.22
3.55
0.39
1.17
Dividends declared per common share
0.22
0.21
0.12
0.11
Weighted average number of common shares outstanding
Media Advisory: TransAlta Fourth Quarter and Full Year 2023 Results and Conference Call
TransAlta Corporation (TransAlta) (TSX: TA) (NYSE: TAC) will release its fourth quarter and full year 2023 results before markets open on Friday, February 23, 2024. 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 beginning at 9:00 a.m. Mountain Time (11:00 a.m. ET). The media will be invited to ask questions following analysts.
Fourth Quarter and Full Year 2023 Conference Call: Toll-free North American participants call: 1-888-664-6392 Webcast link: https://app.webinar.net/gAlG7Ma75oE
Related materials will be available on the Investor Centre section of TransAlta’s website at https://transalta.com/investors/presentations-and-events/. If you are unable to participate in the call, the instant replay is accessible at 1-888-390-0541 (Canada and USA toll free) with TransAlta pass code 493975 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. TransAlta provides municipalities, medium and large industries, businesses and utility customers with clean, affordable, energy efficient and reliable power. Today, TransAlta is one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 112 years, TransAlta has been a responsible operator and a proud member of the communities where we operate and where our employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and its climate change strategy with CDP (formerly Climate Disclosure Project) and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. TransAlta has achieved a 68 per cent reduction in GHG emissions or 22 million tonnes since 2015 and has received scores of A- from CDP and AA from MSCI. For more information about TransAlta, visit its website at transalta.com
For more information:
Investor Inquiries: Phone: 1-800-387-3598 in Canada and U.S. Email: [email protected]
Media Inquiries: Toll-free media number: 1-855-255-9184 Email: [email protected]
TransAlta Corporation Enters into Automatic Share Purchase Plan
TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) announced today that it has entered into an automatic share purchase plan (ASPP) with its broker in order to facilitate repurchases of TransAlta’s common shares (Common Shares) under the Company’s previously announced normal course issuer bid (NCIB).
The Company previously announced that it had received approval from the Toronto Stock Exchange (TSX) to purchase up to 14,000,000 of its Common Shares during the 12-month period that commenced May 31, 2023 and terminates May 30, 2024. Purchases under the NCIB may be made through open market transactions on the TSX and any alternative Canadian trading systems on which the Common Shares are traded, based on the prevailing market price. Since January 1, 2023, the Company has purchased 6,989,000 Common Shares purchased at a weighted average price per Common Share of $11.53 for an aggregate value of approximately $81.0 million. Since the beginning of the current NCIB on May 31, 2023, the Company has purchased 871,100 at a weighted average price per Common Share of $10.92 for an aggregate value of approximately $9.6 million.
The Company believes that the prevailing price for the Common Shares may not, from time to time, reflect the underlying value of the Common Shares and that the purchase of Common Shares pursuant to the NCIB may be an attractive and appropriate use of available funds relative to other alternatives. The ASPP will facilitate purchases under the NCIB as it will allow for purchases of Common Shares to be made at times when the Company would ordinarily not be permitted to make purchases, whether due to regulatory restriction or customary self-imposed blackout periods. TransAlta is committed to enhancing shareholder returns through appropriate capital allocation such as a share buyback and its quarterly dividend, which are underpinned by the Company’s strong free cash flow position.
Under the ASPP, the Company’s broker may purchase Common Shares from the effective date of the ASPP until the end of the NCIB. The ASPP will facilitate purchases of Common Shares under the NCIB by authorizing the Company’s broker to make purchases at its sole discretion based on parameters set by the Company in accordance with TSX rules, applicable law and the terms of the ASPP. Outside of periods that the Company is restricted from purchasing Common Shares pursuant to insider trading rules or its own internal trading blackout policies, Common Shares may also be purchased based on management’s discretion, in compliance with TSX rules and applicable law.
All purchases of Common Shares made under the ASPP will be included in determining the number of Common Shares purchased under the NCIB. Any Common Shares purchased by the Company pursuant to the NCIB will be cancelled. The Company is not currently in possession of any material undisclosed information in relation to the Company. The ASPP has been pre-cleared by the TSX and will be effective on January 1, 2024.
The ASPP will terminate on the earliest of the date on which: (a) the maximum purchase limits under the ASPP are reached; (b) February 24, 2024; or (c) the Company terminates the ASPP in accordance with its terms.
About TransAlta Corporation:
TransAlta owns, operates and develops a diverse fleet of electrical power generation assets in Canada, the United States and Australia with a focus on long-term shareholder value. TransAlta provides municipalities, medium and large industries, businesses and utility customers with clean, affordable, energy efficient and reliable power. Today, TransAlta is one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 112 years, TransAlta has been a responsible operator and a proud member of the communities where we operate and where our employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and its climate change strategy with CDP (formerly Climate Disclosure Project) and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. TransAlta has achieved a 68 per cent reduction in GHG emissions or 22 million tonnes since 2015 and has received scores of A- from CDP and AA from MSCI.
Note: All financial figures are in Canadian dollars unless otherwise indicated.
For more information:
Investor Inquiries: Phone: 1-800-387-3598 in Canada and U.S. Email: [email protected]
Media Inquiries: Toll-free media number: 1-855-255-9184 Email: [email protected]
The Board of Directors of TransAlta Corporation (TSX: TA) (NYSE: TAC) declared the following quarterly dividend on its Cumulative Redeemable Rate Reset First Preferred Shares for the period starting from and including December 31, 2023, up to but excluding March 31, 2024:
Preferred Shares
TSX Stock Symbol
Dividend Rate
Dividend Per Share
Record Date
Payment Date
Series A
TA.PR.D
2.877%
$0.17981
March 1, 2024
March 31, 2024
Series B*
TA.PR.E
7.072%
$0.43958
March 1, 2024
March 31, 2024
Series C
TA.PR.F
5.854%
$0.36588
March 1, 2024
March 31, 2024
Series D*
TA.PR.G
8.142%
$0.50609
March 1, 2024
March 31, 2024
Series E
TA.PR.H
6.894%
$0.43088
March 1, 2024
March 31, 2024
Series G
TA.PR.J
4.988%
$0.31175
March 1, 2024
March 31, 2024
*Please note the quarterly floating rate on the Series B and Series D 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. TransAlta provides municipalities, medium and large industries, businesses and utility customers with clean, affordable, energy efficient and reliable power. Today, TransAlta is one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 112 years, TransAlta has been a responsible operator and a proud member of the communities where we operate and where our employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and its climate change strategy with CDP (formerly Climate Disclosure Project) and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. TransAlta has achieved a 68 per cent reduction in GHG emissions or 22 million tonnes since 2015 and has received scores of A- from CDP and AA from MSCI.
For more information about TransAlta, visit its website at transalta.com.
For more information:
Investor Inquiries: Phone: 1-800-387-3598 in Canada and U.S. Email: [email protected]
Media Inquiries: Toll-free media number: 1-855-255-9184 Email: [email protected]
TransAlta and BHP Announce Commercial Operation of Innovative Hybrid Renewables Facility to Power Remote Mining Operations in Western Australia
TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) and BHP Group Limited (BHP) (NYSE: BHP) (ASX: BHP) announced today that the 48 MW Northern Goldfields solar and battery storage facility (Northern Goldfields Solar and Battery Facility) has achieved commercial operation and is now supplying reliable electricity to BHP’s remote nickel mining operations in Western Australia.
“We are extremely pleased that this innovative hybrid renewable solution is now supplying reliable, emissions-free power to BHP’s mining operations in the outback of Western Australia. The Northern Goldfields Solar and Battery Facility is our first renewable electricity facility in Australia and is made possible through our longstanding relationship with BHP,”- said John Kousinioris, President and Chief Executive Officer of TransAlta. “The fully contracted facility showcases our expertise in integrating renewable energy into remote power systems,” added Mr. Kousinioris.
“Nickel is in high demand for batteries and electric vehicles, and this progress is part of our commitment to delivering more sustainable, lower carbon product to our customers,” said BHP Australia President Geraldine Slattery. “Renewables are increasingly powering BHP operations around the globe and this facility the first we have built on one of our sites is another step forward in our plans to reduce our operational greenhouse gas emissions by at least 30 per cent by FY30, from FY20 levels.”
“It’s also wonderful to see the Northern Goldfields Solar and Battery Facility being commissioned on the back of a team of dedicated engineers, technicians and many others bringing new ideas to the table to support the development of more renewable electricity for our business. This facility will help us reduce Scope 2 emissions at Nickel West’s northern operations by 12 per cent, resulting in an estimated reduction of 54,000 tonnes of CO2-e per annum the equivalent of removing 23,000 combustion engine cars(1) from the road each year,” added Ms. Slattery.
“It’s projects like these that are setting a global standard of what a modern mine looks like, with a big focus on the environment and reducing carbon emissions,” said Bill Johnston, Western Australian Minister for Mines and Petroleum; Energy. “I look forward to seeing what other projects BHP and TransAlta may develop,” added Mr. Johnston.
The Northern Goldfields Solar and Battery Storage Facility consists of the 27.4 MW Mt Keith Solar Farm, 10.7 MW Leinster Solar Farm, 10.1 MW Leinster battery energy storage system and interconnecting transmission infrastructure, all of which is now integrated into TransAlta’s existing 169 MW Southern Cross Energy North remote network in Western Australia.
The project created more than 100 direct and indirect jobs in the Goldfields and Perth regions during the construction phase and will support ongoing employment opportunities during operations. The project has also engaged with local stakeholders and communities, including Traditional Owners from the Tjiwarl Native Title Holders, to ensure positive social and economic outcomes.
TransAlta is continuing to work with BHP Nickel West on the development of other projects to further reduce Scope 2 greenhouse gas emissions at BHP’s Mt Keith and Leinster operations.
Northern Goldfields Solar Project Highlights
12 per cent reduction in emissions at BHP Nickel West’s operations at Mt Keith and Leinster(2);
Long-term contracted cash flows with a globally recognized counterparty; and
Contract life of 16 years
Notes
(1)Based on the average combined CO2 emissions for a new light vehicle sold in Australia of 182 grams per kilometre in 2017 and average travel distance of 13,301 kilometres a year.
(2) Based on BHP Nickel West’s FY20 scope 2 emissions.
About TransAlta Corporation:
TransAlta owns, operates and develops a diverse fleet of electrical power generation assets in Canada, the United States and Australia with a focus on long-term shareholder value. TransAlta provides municipalities, medium and large industries, businesses and utility customers with clean, affordable, energy efficient and reliable power. Today, TransAlta is one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 112 years, TransAlta has been a responsible operator and a proud member of the communities where we operate and where our employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and its climate change strategy with CDP (formerly Climate Disclosure Project) and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. TransAlta has achieved a 68 per cent reduction in GHG emissions or 22 million tonnes since 2015 and has received scores of A- from CDP and AA from MSCI.
For more information about TransAlta, visit our web site at transalta.com.
Cautionary Statement Regarding Forward-Looking Information
This news release contains “forward-looking information”, within the meaning of applicable Canadian securities laws, and “forward-looking statements”, within the meaning of applicable United States securities laws, including the United States Private Securities Litigation Reform Act of 1995 (collectively referred to herein as “forward-looking statements”). In some cases, forward-looking statements can be identified by terminology such as “plans”, “expects”, “proposed”, “will”, “anticipates”, “develop”, “continue,” and similar expressions suggesting future events or future performance. In particular, this news release contains, without limitation, statements pertaining to the anticipated benefits arising from Northern Goldfields Solar and Battery Facility (defined above); development of a wind farm at Mount Keith; expectation to achieve the Clean Electricity Growth Plan; expectations relating to meeting the future needs of our customers with clean electricity solutions; and expectation greenhouse gas emissions reductions. 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 political and regulatory environments; and the condition of the financial markets not changing significantly. 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: changes in market power and gas prices; supply chain disruptions impacting major maintenance and growth projects; cybersecurity breaches; negative impacts to our credit ratings; legislative or regulatory developments and their impacts; increasingly stringent environmental requirements and their impacts; increased competition; global capital markets activity (including our ability to access financing at a reasonable cost or at all); changes in prevailing interest rates, currency exchange rates and inflation levels; armed hostilities; general economic conditions in the geographic areas in which TransAlta operates; and other risks and uncertainties discussed in the TransAlta’s materials filed with the securities regulatory authorities from time to time and as also set forth in the TransAlta’s MD&A and Annual Information Form for the year ended Dec. 31, 2022. 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 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 and is given 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 otherwise indicated.
For more information:
Investor Inquiries: Phone: 1-800-387-3598 in Canada and U.S. Email: [email protected]
Media Inquiries: Toll-free media number: 1-855-255-9184 Email: [email protected]
TransAlta Announces Growth Targets to 2028, Financial Outlook for 2024 and Declares Dividend Increase of 9%
Highlights
Expanded growth targets to deliver up to 1.75 GW with a target investment of $3.5 billion by 2028 which will deliver annual EBITDA of $350 million
Growth will focus on customer-centred renewables and storage through the execution of its current 4.8 GW development pipeline
Expand development pipeline to reach 10 GW by 2028 to enable additional growth potential
TransAlta’s Board of Directors has approved a dividend increase on its common shares in an amount equal to $0.02 per share on an annualized basis, a 9 per cent increase to the current dividend level
Announces joint development agreement with Hancock Prospecting to define, develop and operate clean energy solutions
Adjusted EBITDA outlook for 2024 is in the range of $1.15 billion to $1.3 billion and Free Cash Flow (“FCF”) of $450 to $600 million, which represents $1.45 to $1.94 of FCF per share
TransAlta Corporation (TSX: TA) (NYSE: TAC) is pleased to announce it has updated its strategic growth targets to 2028 which strengthen the Company’s commitment to being a leader in clean electricity by delivering customer-centred power solutions. The growth targets include adding up to 1.75 GW of new capacity to the Company’s fleet by investing approximately $3.5 billion to develop, construct or acquire new assets through to the end of 2028. The Company will be providing further details at its Investor Day event, being held today in Toronto and virtually, on its strategic priorities, market outlook, operations, growth opportunities and pipeline, 2024 financial outlook and longer-term plan.
“We have significant growth opportunities across Canada, the United States and Australia with a focus on renewable and storage power solutions for large customers”,- said Mr. John Kousinioris, President and Chief Executive Officer of TransAlta. “As we look forward to 2028, our growth outlook remains strong, and the Company is well positioned in this accelerating energy transition landscape. We are confident that our investment strategy of expanding further into contracted renewables focused on onshore wind, solar and battery storage will deliver long term value to our shareholders. We also intend to continue our path of disciplined investment and execution to ensure that our projects are delivering on required returns. We believe this enhanced discipline and customer focus is critical in the evolving market landscape.”
“We are also pleased to announce that the Board of Directors has approved an annualized $0.02 per share, or 9 per cent, increase to our common share dividend. This represents the fifth consecutive annual dividend increase and reflects the Board’s confidence in the Company’s strategic direction and cash flow generating potential while affirming the Company’s commitment to realizing returns for our shareholders.”
“In addition, we are excited to announce a joint development agreement with Hancock Prospecting to develop clean energy solutions for their growing operations in Western Australia. The team is proud to be adding another top tier customer to our portfolio, and we expect this relationship to lead to new opportunities that we’ll be able to share as part of our growing development pipeline,” added Mr. Kousinioris.
Customer-Centred Clean Electricity Growth Plan to 2028
The Company’s recently updated strategic growth targets include:
Delivering up to 1.75 GW of incremental renewables capacity with a targeted investment of $3.5 billion by the end of 2028;
Focusing growth on customer-centred renewables and storage through the development of its 4.8 GW development pipeline; and
Expanding the Company’s development pipeline to 10 GW by 2028.
Declared Increase in Common Share Dividend
The Company’s Board of Directors has approved a $0.02 annualized increase to the common share dividend, or 9 per cent increase, and declared a dividend of $0.06 per common share to be payable on April 1, 2024 to shareholders of record at the close of business on March 1, 2024. The quarterly dividend of $0.06 per common share represents an annualized dividend of $0.24 per common share.
Hancock Prospecting Joint Development Agreement
The Company has entered into a joint development agreement with Hancock Prospecting (Hancock), Australia’s fourth largest iron ore producer. This arrangement will build on TransAlta’s expertise in supplying power to remote mining operations in Western Australia and will result in TransAlta and Hancock working collaboratively to define and supply behind the fence generation solutions for Hancock in the Port Hedland area.
2024 Financial Outlook
For 2024, management expects adjusted EBITDA to be in the range of $1.15 billion to $1.3 billion and FCF to be in the range of $450 million to $600 million which is based on the following:
Higher contribution from the wind and solar portfolio due to the full year impact of new asset additions of Garden Plain and Northern Goldfields solar as well as the expected full return to service of Kent Hills;
Contributions from the addition of Mt Keith transmission;
Contributions from the commercial operations of the White Rock and Horizon Hill wind projects which are expected in the first quarter of 2024;
Contribution from the Heartland Generation acquisition, which is expected to close in 2024; and
Lower contributions from the legacy merchant hydro, wind and gas portfolio in Alberta which are expected to step down due to lower average power prices from current market levels given the baseload gas and renewables supply additions expected in 2024.
Measure ($ millions unless noted otherwise)
2024 Outlook
Adjusted EBITDA
1,150 – 1,300
Adjusted FFO
750 – 850
Sustaining capital
130 – 150
FCF
450- 600
FCF ($ /share)
1.45 – 1.94
Assumptions in the 2024 outlook:
Measure
Full year 2024
Alberta Spot
($ /MWh)
75 to 95
Mid-C Spot
(US$ /MWh)
85 to 95
Hedge price
($ /MWh)
85
Hedged production
(GWh)
7,500
AECO Gas Price
($ /GJ)
2.50 to 3.00
Hedge gas price
($ /GJ)
2.77
Hedge gas volumes
(GJ)
66 million
Alberta spot price sensitivity: a +/- $5 per MWh change in spot price is expected to have a +/- $20 million impact on adjusted EBITDA for 2024.
Investor Day and Conference call
TransAlta will be hosting an Investor Day later today at 9:30 a.m. (ET) during which our executive team will provide an overview of the Company’s strategic objectives, growth targets and financial strategy and plan.
The presentation will be broadcast live via webcast with video and will be accessible by web browser. The recorded video webcast and corresponding presentation will also be made available on the Investor Centre section of TransAlta’s website at http://www.transaltaprd.wpenginepowered.com/investors/events-and-presentations following the event.
Webcast attendees can register to receive web access information for the live event below. Registration for the event can also be found in the Investor Centre of TransAlta’s website.
Event details: TransAlta 2023 Investor Day November 21, 2023 Start time: 9:30 a.m. ET / 7:30 a.m. MT
Non-IFRS financial measures and other specified financial measures
We use a number of financial measures to evaluate our performance and the performance of our business segments, including measures and ratios that are presented on a non-IFRS basis, as described below. Non-IFRS amounts, measures and ratios do not have standardized meanings under IFRS. They are unlikely to be comparable to similar measures presented by other companies and should not be viewed in isolation from, or as an alternative for, or more meaningful than our IFRS results.
Adjusted EBITDA, Adjusted FFO and FCF are non-IFRS measures. Please refer to M40-M50 of the Company’s MD&A for the year-ended December 31, 2022 (the “MD&A”) for a description of adjustments made. Adjusted EBITDA is an important metric for management that represents our core business profitability. Adjusted FFO is an important metric as it provides a proxy for cash generated from operating activities before changes in working capital and provides the ability to evaluate cash flow trends in comparison with results from prior periods. FCF is an important metric as it represents the amount of cash that is available to invest in growth initiatives, make scheduled principal repayments on debt, repay maturing debt, pay common share dividends or repurchase common shares. Changes in working capital are excluded so FFO and FCF are not distorted by changes that we consider temporary in nature, reflecting, among other things, the impact of seasonal factors and the timing of receipts and payments. FFO per share and FCF per share are calculated using the weighted average number of common shares outstanding during the period. FFO per share and FCF per share are a non-IFRS ratios. Refer to the Reconciliation of Cash Flow from Operations to FFO and FCF and Key Financial Non-IFRS Ratios sections of the MD&A 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. TransAlta provides municipalities, medium and large industries, businesses and utility customers with clean, affordable, energy efficient and reliable power. Today, TransAlta is one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 112 years, TransAlta has been a responsible operator and a proud member of the communities where we operate and where our employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and its climate change strategy with CDP (formerly Climate Disclosure Project) and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. TransAlta has achieved a 68 per cent reduction in GHG emissions or 22 million tonnes since 2015 and has received scores of A- from CDP and AA from MSCI.
For more information about TransAlta, visit our web site at transalta.com
Cautionary Statement Regarding Forward-Looking Information
This news release contains “forward-looking information”, within the meaning of applicable Canadian securities laws, and “forward-looking statements”, within the meaning of applicable United States securities laws, including the United States Private Securities Litigation Reform Act of 1995 (collectively referred to herein as “forward-looking statements”). In some cases, forward-looking statements can be identified by terminology such as “plans”, “expects”, “proposed”, “will”, “anticipates”, “develop”, “continue”, and similar expressions suggesting future events or future performance. In particular, this news release contains, without limitation, statements pertaining to: 2024 annual financial guidance, including adjusted EBITDA, FCF and sustaining capital; the Company’s expanded growth targets to deliver 1.75 GW with a target investment of $3.5 billion by 2028 which is anticipated to deliver annual EBITDA of $350 million of developing contracted renewables; the Company’s expansion of its development pipeline targeted to reach 10 GW by 2028; the Company’s investment strategy delivering long term value to shareholders; the common share dividend level through 2024; executing growth with Hancock under the Joint Development Agreement; and the acquisition of Heartland Generation . The forward-looking statements contained in this news release are based on many assumptions including, but not limited to, the following material assumptions: merchant power prices in Alberta and the Pacific Northwest as stated above; the Alberta hedge position, including price and volume of hedged power; the impact of new asset additions in 2024 of Garden Plain, Northern Goldfields solar and Kent Hills, Mt Keith transmission, White Rock and Horizon Hill; the closing of the Heartland transaction in 2024; lower contributions form Alberta merchant portfolio; the availability and cost of labour, services and infrastructure; and the satisfaction by third parties of their obligations, including under our power purchase agreements. Forward-looking statements are subject to a number of significant risks, uncertainties and assumptions that could cause actual plans, performance, results or outcomes to differ materially from current expectations. Factors that may adversely impact what is expressed or implied by forward-looking statements contained in this news release include, but are not limited to: fluctuations in merchant power prices, including lower pricing in Alberta, Ontario and Mid-Columbia; inability to secure regulatory approval for the Heartland Generation acquisition, on terms satisfactory to TransAlta or at all; Â changes in demand for electricity and capacity; our ability to contract or hedge our electricity generation for prices and at volumes that will provide expected returns; risks relating to our early stage development projects, including interconnection, offtake contracts and geotechnical and environmental conditions of such projects; long term commitments on gas transportation capacity that may not be fully utilized over time; our ability to replace or renew contracts as they expire; risks associated with our projects under construction and projects in development, namely as it pertains to capital costs, permitting, land rights, engineering risks, and delays in the construction or commissioning of such projects; any difficulty raising needed capital in the future, including debt, equity and tax equity, as applicable, on reasonable terms or at all; changes to the legislative, regulatory and political environments in the jurisdictions in which we operate; environmental requirements and changes in, or liabilities under, these requirements; operational risks involving our facilities, including unplanned outages; disruptions in the transmission and distribution of electricity, including congestion and basis risk; restricted access to capital and increased borrowing costs; changes in short-term and/or long-term electricity supply and demand; reductions in production; increased costs; impairments and/or write-downs of assets; adverse impacts on our information technology systems and our internal control systems, including increased cybersecurity threats; commodity risk management and energy trading risks, including the effectiveness of the Company’s risk management tools associated with hedging and trading procedures to protect against significant losses; reduced labour availability and ability to continue to staff our operations and facilities; disruptions to our supply chains, including our ability to secure necessary equipment on the expected timelines or at all; the effects of weather, including man made or natural disasters, as well as climate-change related risks; unexpected increases in cost structure; reductions to our generating units relative efficiency or capacity factors; disruptions in the source of fuels, including natural gas, as well as the extent of water, solar or wind resources required to operate our facilities; general economic risks, including deterioration of equity markets, increasing interest rates or rising inflation; failure to meet financial expectations; general domestic and international economic and political developments, including armed hostilities, the threat of terrorism, diplomatic developments or other similar events; equipment failure and our ability to carry out repairs in a cost-effective and timely manner; industry risk and competition; fluctuations in the value of foreign currencies; structural subordination of securities; counterparty credit risk; inadequacy or unavailability of insurance coverage; our provision for income taxes; legal, regulatory and contractual disputes and proceedings involving the Company; reliance on key personnel; labour relations matters and other risks and uncertainties discussed in the Company’s materials filed with the securities regulatory authorities from time to time and as also set forth in the Company’s MD&A and Annual Information Form for the year ended December 31, 2022. 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 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.
Earnings before income taxes of $453 million, an improvement of $327 million from the same period in 2022
Net earnings attributable to common shareholders of $372 million, an increase of $311 million from the same period in 2022
Cash flow from operating activities of $681 million, an increase of $477 million from the same period in 2022
Adjusted EBITDA(1) of $453 million, a decrease of 18% over the same period in 2022. Year-to-date adjusted EBITDA of $1.34 billion reflects an increase of 23% over the same period in 2022, and is in line with our revised full year financial guidance
Free Cash Flow (“FCF”)(1) of $228 million, or $0.87 per share, a decrease of 40% on a per-share basis from the same period in 2022. Year-to-date FCF of $769 million, or $2.90 per share, an increase of 19% over the same period in 2022, is in line with our revised FCF financial guidance
Other Business Highlights and Updates
Entered into a definitive share purchase agreement to acquire Heartland Generation and its entire business operations, which are located in Alberta and British Columbia
Completed the acquisition of TransAlta Renewables
Achieved commercial operations at the Garden Plain facility in August. The 130 MW wind facility is fully contracted with Pembina Pipeline Corporation and PepsiCo Canada
Topped list of Newsweek’s Most Trustworthy Companies for 2023
Commenced commissioning of Northern Goldfields Solar project. All major equipment has been installed and construction work is largely complete. Energization and testing processes have commenced and the facility is expected to achieve full commercial operations in the fourth quarter of 2023
Advanced the Kent Hills rehabilitation program towards completion with all 50 turbines now fully reassembled. Energization activities are underway and turbines are being returned to service as commissioning activities are completed. To date, 36 turbines have been fully returned to commercial operations and the remaining turbines are expected to return to service in the fourth quarter of 2023
Advanced the Mount Keith 132kV expansion project, which is nearing completion. The transmission line and transformer installation is complete and the project is expected to achieve commercial operations in the fourth quarter of 2023
Advanced the Horizon Hill wind project in Oklahoma with all major equipment now delivered to site. Turbine erection activities are complete with all 34 turbines fully assembled. Construction of the transmission interconnection is underway and commercial operations are expected in the first quarter of 2024
Advanced the White Rock East and West projects with all equipment deliveries complete and tower assembly well underway. Currently, 34 out of 51 turbines have been assembled and the construction of the transmission interconnection is in progress. Commercial operations are expected in the first quarter of 2024
TransAlta Corporation (TSX: TA) (NYSE: TAC) today reported its financial results for the three and nine months ended Sept. 30, 2023.
“Our third quarter results continue to demonstrate the value of our strategically diversified fleet, which benefited from our asset optimization and hedging activities. With strong performance across the fleet and our continuing positive expectations for the balance of year, we continue to track towards previously revised guidance,” said John Kousinioris, President and Chief Executive Officer of TransAlta.
“We are pleased to have completed the acquisition of TransAlta Renewables. Our combined company’s greater scale and enhanced strategic positioning will drive value for all of our shareholders as we continue to advance our growth plan. Within the quarter, we were also pleased to reach commercial operations at Garden Plain, our 27th wind facility. We are now delivering clean electricity to our customers, Pembina Pipeline and PepsiCo, helping them achieve their sustainability goals.”
“We also continue to progress our advanced stage pipeline and other potential opportunities in the context of the current market environment. We are focused on making disciplined capital allocation decisions to ensure we deliver project returns that are appropriate for the current market environment and enhance value for our shareholders. We have 418 MW of projects in advanced stage of development on which we are working to reach final investment decisions in the near term. The cash flows from our legacy fleet are positioning us well to realize our Clean Electricity Growth Plan”, added Mr. Kousinioris. “Finally, and more recently, we are pleased to have entered into an agreement to acquire Heartland Generation, which we believe will support our competitive positioning and diversify our generating portfolio in Alberta.”
Key Business Developments
TransAlta to Acquire Heartland Generation from Energy Capital Partners
On Nov. 2, 2023, the Company announced that it had entered into a definitive share purchase agreement with an affiliate of Energy Capital Partners, the parent of Heartland Generation Ltd. and Alberta Power (2000) Ltd. (collectively, “Heartland”), pursuant to which TransAlta will acquire Heartland and its entire business operations in Alberta and British Columbia. The acquisition will add 10 facilities to TransAlta’s fleet, totalling 1,844 MW of new capacity. Heartland owns and operates generation assets consisting of 507 MW of cogeneration, 387 MW of contracted and merchant peaking generation, 950 MW of gas-fired thermal generation, transmission capacity and a development pipeline that includes the 400 MW Battle River Carbon Hub. The transaction is expected to close in the first half of 2024, subject to customary closing conditions, including receipt of regulatory approvals.
The purchase price for the acquisition is $390 million, subject to working capital and other adjustments, as well as the assumption of $268 million of low-cost debt. The Company will finance the transaction using cash on hand and draws on its credit facilities.
The assets are expected to add approximately $115 million of average annual EBITDA including synergies. Approximately, 55 per cent of revenues are under contract with high creditworthy counterparties, which have a weighted-average remaining contract life of 16 years. Corporate pre-tax synergies are expected to exceed $20 million annually.
TransAlta Corporation Completes Acquisition TransAlta Renewables Inc. to Simplify Structure and Enhance Strategic Position
On Oct. 5, 2023, the Company announced the completion of the acquisition of TransAlta Renewables pursuant to the terms of the previously announced arrangement agreement between the parties (“the Arrangement”). TransAlta acquired all of the outstanding common shares of TransAlta Renewables (“RNW Shares”) not already owned, directly or indirectly, by TransAlta and certain of its affiliates, resulting in TransAlta Renewables becoming a wholly owned subsidiary of the Company. Prior to the Arrangement, TransAlta and its affiliates collectively held 160,398,217 RNW Shares, representing 60.1 per cent of the issued and outstanding RNW Shares, with the remaining 106,510,884 RNW Shares held by TransAlta Renewables shareholders (“RNW Shareholders”) other than TransAlta and its affiliates.
The Arrangement was approved by RNW Shareholders at a special meeting of shareholders held on Sept. 26, 2023, and by the Court of King’s Bench of Alberta on Oct. 4, 2023. The consideration paid totaled $1.3 billion, which consisted of $800 million of cash and approximately 46 million common shares of the Company.
The closing of the acquisition of TransAlta Renewables represents a key milestone for the Company and the simplified and unified corporate structure positions it well for future success. The combined company will unify our assets, capital, and capabilities to enhance cash flow predictability while enhancing our ability to realize future growth.
The RNW Shares were delisted from the Toronto Stock Exchange (“TSX”). Common shares of the Company will continue to trade on both the New York Stock Exchange (“NYSE”) and the TSX under the symbols “TAC” and “TA”, respectively.
TransAlta Tops List of Newsweek’s World’s Most Trustworthy Companies for 2023
On Sept. 14, 2023, the Company announced that it ranked first on Newsweek’s inaugural “World’s Most Trustworthy Companies 2023” list for the Energy and Utilities category. The list identifies the top 1,000 companies in 21 countries and across 23 industries. Newsweek’s 2023 World’s Most Trustworthy Companies have been chosen based on a holistic approach to evaluating trust across three pillars of public trust customer, investor and employee. The list was compiled based on an extensive survey of over 70,000 participants, gathering 269,000 evaluations of companies that people trust as a customer, as an investor and as an employee.
In August 2023, the Garden Plain wind facility was commissioned adding 130 MW to our gross installed capacity. The facility is fully contracted with Pembina Pipeline Corporation and PepsiCo Canada, with a weighted average contract life of approximately 17 years.
Third Quarter 2023 Highlights
$ millions, unless otherwise stated
Three Months Ended
Nine Months Ended
Sept. 30, 2023
Sept. 30, 2022
Sept. 30, 2023
Sept. 30, 2022
Adjusted availability (%)
91.9
93.8
89.4
90.1
Production (GWh)
5,678
5,432
16,246
15,253
Revenues
1,017
929
2,731
2,122
Adjusted EBITDA(1)
453
555
1,343
1,093
Funds from operations(1)
357
488
1,122
887
Free cash flow(1)
228
393
769
646
Earnings before income taxes
453
126
915
346
Net earnings attributable to common shareholders
372
61
728
167
Cash flow from operating activities
681
204
1,154
526
Net earnings per share attributable to common shareholders, basic and diluted
TransAlta to Acquire Heartland Generation from Energy Capital Partners for $658 million
Expands Capabilities to Meet Demands of Energy Transition
Highlights
Highly accretive to free cash flow and cash yield upon closing with approximately 55% of revenues contracted with a weighted-average remaining life of 16 years
Transaction valued at approximately $658 million, inclusive of the assumption of $268 million of low-cost debt, with an expected EBITDA multiple of approximately 5.5x
Corporate pre-tax synergies expected to exceed $20 million annually
Adds 1,844 MW (net interest) of complementary flexible capacity including contracted cogeneration, peaking generation, transmission capacity and development opportunities in hydrogen, which will be needed to support the energy transition and reliability in the Alberta electricity market
Augments and further diversifies TransAlta’s portfolio in Alberta’s energy-only market
Enhances TransAlta’s competitive positioning in the highly dynamic and shifting electricity landscape in Alberta
TransAlta Corporation (TSX: TA; NYSE: TAC) (“TransAlta” or “the Company”) announced that it has entered into a definitive share purchase agreement (the “Agreement”) with an affiliate of Energy Capital Partners (“ECP”), the parent of Heartland Generation Ltd. and Alberta Power (2000) Ltd. (collectively, “Heartland”), pursuant to which TransAlta will acquire Heartland and its entire business operations in Alberta and British Columbia. Heartland owns and operates generation assets consisting of 507 megawatts (MW) of cogeneration, 387 MW of contracted and merchant peaking generation, 950 MW of gas-fired thermal generation, transmission capacity and a development pipeline that includes the 400 MW Battle River Carbon Hub. The purchase price for the acquisition is $390 million, subject to working capital and other adjustments, as well as the assumption of $268 million of low-cost debt. The Company will finance the transaction using cash on hand and draws on its credit facilities. The Agreement provides that economic benefits arising after October 31, 2023 will be to the account of TransAlta.
With this acquisition we are pleased to announce the addition of highly flexible and complementary assets to our Alberta portfolio. As the energy transition continues to drive new investment in renewables in the Province, our assessment is that the market will require low-cost, highly flexible and fast-responding generation, which will be supportive to grid reliability over the coming years. This transaction will support us in maintaining our competitive positioning and ensure we have a robust and diversified portfolio, which together with our marketing capabilities, can complement and support a cleaner grid,” said John Kousinioris, President and Chief Executive Officer of TransAlta.
“The Heartland portfolio is low cost and will contribute meaningful cash flows with significant value from synergies. It will also support the energy transition until other zero-emitting solutions are developed. We remain committed to our Clean Electricity Growth Plan and net-zero targets. The acquisition of this set of assets represents a strategic investment in our home market with a strong return profile which continues to be aligned with our longer term decarbonization goals, added Mr. Kousinioris.
“ECP is proud of the transition progress that Heartland has made since its acquisition in 2019 through our early coal conversions and the advancements of the Battle River Carbon Hub, all the while consistently delivering reliable electricity to the Province. We are excited for TransAlta to continue advancing the energy transition and meeting the reliability and electricity needs of Alberta,” said Andrew Gilbert, ECP Partner.
Investment Highlights
The transaction is strategically attractive to TransAlta and provides the following benefits:
Expands Flexible Generation Capabilities: Augments and diversifies TransAlta’s portfolio in Alberta’s energy-only market by expanding its flexible and fast-ramping capacity and marketing capabilities to be able to better respond to changes in market conditions stemming from the intermittency of increasing renewable generation.
Enhances TransAlta’s Competitive Positioning: The acquisition will competitively position TransAlta in response to the changing dynamics in Alberta given the expected significant increase in renewables and other large baseload generation coming online in the next several years in the highly dynamic and shifting electricity landscape in the province.
Aligned with TransAlta’s Alberta Strategy: The portfolio delivers a highly-responsive, flexible and fast-ramping fleet (peaking units) which will be supportive to responsible energy transition and deliver reliability in the Alberta electricity market for the next 10 to 15 years.
Attractive Transaction Metrics: The acquisition is highly accretive to free cash flow with an attractive multiple and strong cash yield. The transaction acquires a portfolio of assets at approximately $357 per kW, which is well below replacement cost of current and other forms of reliable generation, providing a low-cost expansion of our ability to deliver reliable generation to the market demands of Alberta.
Highly Contracted Cash Flow: Post-closing, the assets are expected to add approximately $115 million of average annual EBITDA including synergies. Approximately, 55 per cent of revenues are under contract with high creditworthy counterparties which have a weighted-average remaining contract life of 16 years.
Near-term Synergies: TransAlta will have the opportunity to leverage corporate costs within our existing business which will provide estimated corporate pre-tax synergies of $20 million annually. In addition, the combined portfolio will enable the Company to further optimize operations and supply chains through scale to achieve additional synergies in the future.
Retains Ownership Presence in Alberta and Builds On Regional Expertise: The Company is well positioned to deliver significant value through our deep technical gas and cogeneration local operational experience which, together with our 112-year history in Alberta, will ensure continuing safe and reliable generation in a dynamic and evolving landscape.
Battle River Carbon Hub Project: This project is a first-of-its-kind 400 MW integrated clean energy project, combining clean hydrogen, production and carbon sequestration, to create a zero-carbon baseload electricity solution. The project would retrofit the existing generation facility at Battle River and utilize the existing transmission infrastructure, which will minimize development costs for a zero-carbon power solution.
Maintains Leadership in Decarbonization: TransAlta remains among Canada’s largest producers of wind power and Alberta’s largest producer of hydroelectric power. The Clean Electricity Growth Plan continues to be at the heart of our strategy and is dedicated to meeting the future needs of our customers with clean electricity solutions. TransAlta’s ability to meet its 2026 GHG emissions reduction target and carbon net zero by 2045 remain on track.¯¯This acquisition adds to TransAlta’s 4.6 GW development pipeline with the addition of a 400 MW hydrogen carbon hub opportunity.
Additional Information on the Agreement
The Agreement is subject to customary closing conditions, including receipt of regulatory approvals. The transaction is expected to close in the first half of 2024.
Investor Call
A conference call with the investment community will take place on November 2 at 9:00 a.m. MST (11:00 a.m. EST). The call will begin with a short address by John Kousinioris, President and Chief Executive Officer followed by a question-and-answer period for analysts and media.
Dial-in number TransAlta to Acquire Heartland Generation Toll-free North American participants call: 1-888-664-6392
A link to the live webcast will be available on the Investor Centre section of TransAlta’s website at https://transalta.com/investors/presentations-and-events/. If you are unable to participate in the call, the instant replay is accessible at 1-888-390-0541 (Canada and USA toll free) with TransAlta pass code 522257 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. TransAlta provides municipalities, medium and large industries, businesses and utility customers with clean, affordable, energy efficient and reliable power. Today, TransAlta is one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 112 years, TransAlta has been a responsible operator and a proud member of the communities where we operate and where our employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and its climate change strategy with CDP (formerly Climate Disclosure Project) and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. TransAlta has achieved a 68 per cent reduction in GHG emissions or 22 million tonnes since 2015 and has received scores of A- from CDP and AA from MSCI.
For more information about TransAlta, visit our web site at transalta.com.
Cautionary Statement Regarding Forward-Looking Information
This news release contains “forward-looking information”, within the meaning of applicable Canadian securities laws, and “forward-looking statements”, within the meaning of applicable United States securities laws, including the United States Private Securities Litigation Reform Act of 1995 (collectively referred to herein as “forward-looking statements). In some cases, forward-looking statements can be identified by terminology such as “plans”, “expects”, “proposed”, “will”, “anticipates”, “develop”, “continue”, and similar expressions suggesting future events or future performance. In particular, this news release contains, without limitation, statements pertaining to: TransAlta’s acquisition of Heartland; the anticipated benefits arising from such transaction, including that the transaction will be accretive to free cash flow and cash yield, that Heartland’s assets will be supportive to grid reliability for the next 10 to 15 years, and the amount of pre-tax synergies; the acquisition EBITDA multiple of 5.5x; the Company’s Clean Electricity Growth Plan and the Company’s expectations relating to meeting the future needs of our customers with clean electricity solutions; TransAlta’s ability to meet its GHG emissions reduction and net zero targets; the 400 MW hydrogen carbon hub opportunity, including the project’s continued development; and the ability to obtain regulatory approval and the timing thereof. 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 political and regulatory environments; the price of power in Alberta; and the condition of the financial markets not changing significantly. 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 Heartland’s facilities; changes in market power and gas prices in Alberta; supply chain disruptions impacting major maintenance and growth projects; failure to obtain necessary regulatory approvals in a timely fashion, or at all; inability to economically or technologically advance the Battle River Carbon Hub Project to final investment decision or commercial operation; any loss of value in the Heartland portfolio during the interim period prior to closing; cybersecurity breaches; negative impacts to our credit ratings; legislative or regulatory developments and their impacts; increasingly stringent environmental requirements and their impacts; increased competition; global capital markets activity (including our ability to access financing at a reasonable cost or at all); changes in prevailing interest rates, currency exchange rates and inflation levels; armed hostilities; general economic conditions in the geographic areas in which TransAlta operates; and other risks and uncertainties discussed in the Company’s materials filed with the securities regulatory authorities from time to time and as also set forth in the Company’s MD&A and Annual Information Form for the year ended Dec. 31, 2022. 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 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 and is given 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 otherwise indicated.
Investor Inquiries: Phone: 1-800-387-3598 in Canada and U.S. Email: [email protected]
Media Inquiries: Toll-free media number: 1-855-255-9184 Email: [email protected]
