TransAlta Renewables Reports First Quarter 2017 Results
CALGARY, Alberta (May 3, 2017) – TransAlta Renewables Inc. (“TransAlta Renewables” or the “Company”) (TSX: RNW) today reported its financial results for the three months ended March 31, 2017. Comparable EBITDA(1) and cash available for distribution(1) (“CAFD”) for the first quarter was $111 million and $83 million, respectively. Comparable EBITDA was consistent with the last year’s comparative quarter, given the continued solid performance of our portfolio of highly contracted assets.
Net earnings for the quarter were $27 million (net loss of $36 million last year). Reported net earnings attributable to common shareholders increased primarily as a result of higher foreign exchange gains mainly due to the strengthening of the Australian dollar and lower fair value change on the Class B shares liability.
Construction of our South Hedland facility continues to progress. At the end of the first quarter of 2017, construction work was largely complete and the project team is now focusing on commissioning activities. The combined-cycle gas turbines achieved first fire in the fourth quarter of 2016 and commissioning activities continue on these units. We expect to invest $210 million to $230 million to complete construction of the South Hedland facility and we continue to expect the project to be fully commissioned by mid-2017.
Today, the Company also declared monthly dividends of $0.07333 per share for holders of record on July 4, 2017 and August 1, 2017, payable on each of July 31, 2017 and August 31, 2017, respectively.
“TransAlta Renewables delivered strong results in the first quarter,” said Brett Gellner, President and Chief Executive Officer. “We remain focused on growing our asset base through both greenfield development and M&A transactions as well as commissioning South Hedland in the near future,” said Mr. Gellner.
TransAlta Renewables previously provided guidance for 2017 with the release of its fourth quarter and full year 2016 results. TransAlta Renewables expects its comparable EBITDA for 2017 to be in the range of $425 million and $450 million, adjusted funds from operations(1) (“AFFO”) to be in the range of $320 million and $350 million and CAFD to be in the range of $235 million and $260 million.
The following table depicts key financial results and statistical operating data:
First Quarter 2017 Highlights
|In $CAD millions, unless otherwise stated||
3 months ended
March 31, 2017
3 months ended
March 31, 2016
|Renewable energy production (GWh) (2)||1,010||1,081|
|Adjusted funds from operations(1)||83||82|
|Cash available for distribution(1)||83||82|
|Net earnings (loss) attributable to common shareholders||27||(36)|
|Net earnings (loss) per share attributable to common shareholders, basic and diluted (3)||0.12||(0.16)|
|Adjusted funds from operations per share(1) (3)||0.37||0.37|
|Cash available for distribution per share(1) (3)||0.37||0.37|
|Dividends paid per common share(3)||0.22||0.22|
|Dividends declared per common share(3)||0.22||0.22|
The following tables provide further detail on the allocation of the comparable EBITDA between owned assets and assets in which TransAlta Renewables holds an economic interest; as well as a reconciliation to AFFO.
3 Months Ended March 31
|Change in long term receivable||–||(9)||(9)||–||(9)||(9)|
|Sustaining capital expenditures||(5)||(1)||(6)||(1)||(4)||(5)|
|Current income tax expense||(2)||–||(2)||–||(3)||(3)|
|Distributions paid to subsidiaries’
|Unrealized risk management (gain)loss||1||–||1||–||(1)||(1)|
A complete copy of TransAlta Renewables’ first quarter report including MD&A and unaudited financial statements is available through TransAlta Renewables’ website at www.transaltarenewables.com or at SEDAR at www.sedar.com.
TransAlta Renewables Annual Meeting of Shareholders
TransAlta Renewables will hold its Annual Meeting of Shareholders tomorrow, May 4, 2017, at 10:00 a.m. MT (12:00 p.m. ET) at the Hotel Arts, Galleria Room in Calgary, Alberta. The Annual Meeting of Shareholders will be broadcast via webcast. To access the broadcast, please visit http://www.transaltarenewables.com/investors/events-and-presentations.
(1) Comparable EBITDA refers to earnings before interest, taxes, depreciation and amortization including finance lease income and adjusted for certain other items. Adjusted funds from operations (AFFO) includes the deduction of sustaining capital expenditures and distributions to non-controlling interests and excludes the effects of timing and working capital on distributions from subsidiaries of TransAlta Corporation in which the Company holds an economic interest. CAFD refers to AFFO less principal repayments of amortizing debt. These items are not defined under International Financial Reporting Standards (“IFRS”) and the way they are calculated changed in the third quarter of 2015. Comparative measures have been restated accordingly. 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 further discussion of these items, including, where applicable, reconciliations to measures calculated in accordance with IFRS.
(2) Includes production from the Wyoming Wind Farm and excludes Canadian and Australian gas-fired generation. Production is not a key revenue driver for gas-fired facilities as most of their revenues are Capacity based.
About TransAlta Renewables Inc.
TransAlta Renewables is among the largest of any publicly traded renewable independent power producers (“IPP”) in Canada. Our asset platform and economic interests are diversified in terms of geography, generation and counterparties and consist of interests in 18 wind facilities, 13 hydroelectric facilities, eight natural gas generation facilities (including one currently under construction) and one natural gas pipeline, representing an ownership interest of 2,441 MW of net generating capacity, located in the provinces of British Columbia, Alberta, Ontario, Québec, New Brunswick, the State of Wyoming and the State of Western Australia. Our objectives are to (i) create stable, consistent returns for investors through the ownership of, and investment in, highly contracted renewable and natural gas power generation and other infrastructure assets that provide stable cash flow primarily through long-term contracts with strong counterparties; (ii) pursue and capitalize on strategic growth opportunities in the renewable and natural gas power generation and other infrastructure sectors; (iii) maintain diversity in terms of geography, generation and counterparties; and (iv) pay out 80 to 85 per cent of cash available for distribution to the shareholders of the Company on an annual basis.
Cautionary Statement Regarding Forward Looking Information
This news release contains forward looking statements, including statements regarding the business and anticipated financial performance of the Company that are based on the Company’s current expectations, estimates, projections and assumptions in light of its experience and its perception of historical trends. In some cases, forward-looking statements can be identified by terminology such as “plans”, “expects”, “proposed”, “will”, “anticipates”, “develop”, “continue”, and similar expressions suggesting future events or future performance. In particular, this news release contains forward-looking statements, including certain financial outlooks, pertaining to, without limitation, the following: expected comparable EBITDA for 2017, AFFO for 2017 and CAFD for 2017; the commissioning of the South Hedland Facility; and the remaining project costs for the South Hedland Facility and the source of funding in respect of such costs and the effect. 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; any factors that could cause any delay in commissioning of South Hedland; and other risks and uncertainties discussed in the Company’s materials filed with the Canadian securities regulatory authorities from time to time and as also set forth in the Company’s MD&A for the year ended December 31, 2016 and 2017 Annual Information Form. 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 purpose of the financial outlooks contained herein is 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. 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.
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