TransAlta Renewables Reports Third Quarter 2015 Results
CALGARY, Alberta (October 30, 2015) – TransAlta Renewables Inc. (“TransAlta Renewables” or “the Company”) (TSX: RNW) today reported third quarter comparable EBITDA(1) of $57.7 million, an increase of $28.1 million compared to the same period last year, primarily due to the contribution from the Company’s investment in TransAlta’s Australian assets. For nine months ending September 30, 2015, comparable EBITDA was $166.2 million. Comparable net earnings per share(1) for the third quarter were $0.11 per share and $0.41 per share for the nine months ended September 30, 2015.
“TransAlta Renewables performed in line with expectations in the third quarter. Wind volumes were lower in the East compared to the same period a year ago, whereas Western Canadian wind and hydro production was higher, demonstrating the benefit of a highly diversified portfolio,” said Brett Gellner, President. “In October, we also took steps to align a portion of our debt to the long-term nature of the assets by raising $440 million of long-term project financing at two of our wind sites. Finally, we continue to explore additional drop-down opportunities with TransAlta.”
In May, the Company completed the $1.78 billion investment in an economic interest of TransAlta’s 425 MW Australian gas-fired generation assets which are operational and contracted under long-term contracts, the 150 MW South Hedland Power Station, currently under construction, and the recently commissioned 270 kilometre gas pipeline, as well as committing to fund the remaining project costs for the South Hedland project.
During the third quarter, TransAlta Renewables invested AUD$115 million to advance the construction of the South Hedland Power Station. We expect to start receiving equipment on site during the fourth quarter. As at September 30, 2015, the remaining project costs associated with South Hedland were estimated at approximately $380 million (AUD$392 million), and will be funded by TransAlta Renewables through a combination of internally generated cash flow and borrowings under a credit facility. The power station is fully contracted and is expected to be commissioned in the first half of 2017.
On October 1, 2015, the Company completed a $442 million bond offering for its indirect wholly-owned subsidiary, Melancthon Wolfe Wind LP. The bonds are amortizing and bear interest from their date of issue at a rate of 3.834 per cent, payable semi-annually and mature on December 31, 2028. Net proceeds were used to repay the Amortizing Term loan of $155.8 million and Wyoming Wind Acquisition loan of $116.7 million (US$87 million) to TransAlta in full, with the balance paying down the credit facility due to TransAlta.
TransAlta Renewables is also pleased to announce two leadership appointments during the quarter. Donald Tremblay was appointed to the role of Chief Financial Officer. Mr. Tremblay is also the Chief Financial Officer at TransAlta Corporation and is responsible for all financial policy, planning and reporting, tax, treasury, risk management, internal audit and investor relations. John Kousinioris was appointed to the role of Corporate Secretary. Mr. Kousinioris is also the Chief Legal and Compliance Offer at TransAlta Corporation and is responsible for directing the Company’s legal affairs, regulatory compliance and corporate secretarial matters, government and aboriginal affairs and sustainable development.
(1) Comparable EBITDA, adjusted funds from operations, comparable cash available for distribution, comparable earnings, comparable earnings per share, adjusted funds from operations per share and comparable cash available for distribution per share are not defined under International Financial Reporting Standards (“IFRS”) and the way they are calculated changed in the current quarter. Presenting these items from period to period provides management and investors with the ability to evaluate earnings and cash flow trends more readily in comparison with prior periods’ results. Refer to the Non-IFRS Measures section of the Management’s Discussion and Analysis (“MD&A”) for the quarter for further discussion of these items, including, where applicable, reconciliations to measures calculated in accordance with IFRS.
Summary of Results
Q3 2015 compared to Q3 2014
• Comparable EBITDA of $57.7 million compared to $29.6 million for the same period last year
• Adjusted funds from operations of $38.9 million compared to $17.0 million for the same period last year
• Comparable cash available for distribution of $27.5 million compared to $6.1 million for the same period last year
• Renewable energy production(2) of 623 GWh, compared to 612 GWh for the same period last year
• Comparable EBITDA of $166.2 million compared to $122.8 million for the same period last year
• Adjusted funds from operations of $120.9 million compared to $85.4 million for the same period last year
• Comparable cash available for distribution of $98.3 million compared to $47.2 million for the same period last year
• Renewable energy production of 2,279 GWh compared to 2,336 GWh for the same period last year
(2)Includes production from our economic interest in the Wyoming Wind Farm and excludes Australian gas-fired generation
The following table depicts key financial results and statistical operating data:
Third Quarter 2015 Highlights
In $CAD thousands, unless otherwise
Sept 30, 2015
Sept 30, 2014
Sept 30, 2015
Sept 30, 2014
|Renewable energy production (GWh)||623||612||2,279||2,336|
|Net earnings attributable to
|Comparable net earnings attributable to
|Adjusted funds from operations||38,887||17,013||120,896||85,381|
|Cash flow from operating activities||39,695||17,318||129,632||98,310|
|Comparable cash available for distribution||27,488||6,056||98,321||47,149|
|Net earnings per share attributable to common shareholders, basic and diluted||0.32||–||0.56||0.24|
|Comparable net earnings per share||0.11||–||0.41||0.24|
|Adjusted Funds from operations per share||0.20||0.15||0.78||0.74|
|Comparable cash available for distribution per share||0.14||0.05||0.63||0.41|
|Dividends paid per common share||0.21||0.19||0.60||0.58|
A complete copy of TransAlta Renewables’ third quarter report including MD&A and unaudited financial statements is available through TransAlta Renewables’ website at www.transaltarenewables.com or through SEDAR at www.sedar.com.
About TransAlta Renewables Inc.
TransAlta Renewables owns 16 wind and 12 hydroelectric power generation facilities, and holds economic interests in TransAlta’s Wyoming Wind Farm and Australian Assets, having an aggregate installed generating capacity of 1,856 MW, in which it holds a net ownership interest of approximately 1,680 MW. TransAlta Renewables’ economic interest in Australian assets consist of 425 MW of power generation from six operating assets, which are operational and contracted under long-term contracts, and the 150 MW South Hedland project that is currently under construction, as well as the recently commissioned 270 km gas pipeline. TransAlta Renewables’ power generating capacity is among the largest of any publicly-traded renewable independent power producer (“IPP”) in Canada, with more wind power generating capacity than any other Canadian publicly-traded IPP. TransAlta Renewables’ strategy is focused on the efficient operation of its portfolio of assets and expanding its asset base through the acquisition of high-quality contracted renewable and natural gas power generation facilities and other infrastructure assets. Our objectives are to (i) create stable, consistent returns for investors through the ownership of contracted renewable and, potentially, natural gas power generation and other infrastructure assets that provide stable cash flow through long-term contracts with creditworthy counterparties, including TransAlta Corporation; (ii) pursue and capitalize on strategic growth opportunities in the renewable and, natural gas power generation and other infrastructure sectors; and (iii) pay out a portion of cash available for distribution to the shareholders of the Company on a monthly basis.
Cautionary Statement Regarding Forward Looking Information
This news release may contain forward looking statements, including statements regarding the business and anticipated financial performance of the Company. These forward-looking statements are not historical facts but reflect the Company’s current expectations concerning future plans, actions and results. These statements are subject to a number of risks and uncertainties that could cause actual plans, actions and results to differ materially from current expectations including, but not limited to, changes in tax, environmental, and other laws and regulations; competitive factors in the renewable power industry; operational breakdowns, failures, or other disruptions; changes in economic and market conditions; the effect, results and perceived benefits of the Australian investment, including forecasts of comparable CAFD and expected comparable CAFD per share accretion; the timing and completion and commissioning of projects under development, including the South Hedland project and the costs thereof; 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 2015 Annual Information Form for the year ended Dec. 31, 2014. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect the Company’s expectations only as of the date of this news release. The Company disclaims any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Note: All financial figures are in Canadian dollars unless noted otherwise.
For more information:
Manager, Investor Relations
Phone: 1 800-387-3598 in Canada and U.S.
Toll-free media number: 1-855-255-9184