TransAlta Corp. missed analyst estimates in the first quarter, but the company’s president said Tuesday that he was pleased with the company’s ability to counter lower revenue with higher electricity output and reduced costs.
The power generation company had a net loss of $11 million, or 4 cents per share, while adjusted profit fell to $32 million or 12 cents per share and revenue fell to $540 million.
The results compared with a profit of $88 million or 39 cents per share in the first quarter of 2012 when its adjusted profit totalled $44 million or 20 cents per share. Revenue was $644 million a year ago.
Analysts had been looking for 20 cents per share of adjusted earnings and revenues of $593 million, according to an average estimate compiled by Thomson Reuters.
The company said the year-to-year decline in earnings was partly due to a tax recovery in the first quarter of 2012 as well as a writedown of the value of coal inventory at its Centralia power plant during the first quarter of this year.
Dawn Farrell, TransAlta’s president and chief executive officer., said she was pleased with the company’s operating performance including a year-year production increase and the availability levels of the company’s fleet of power plants.
“Furthermore, we have been able to offset declines in revenue from low pricing in our Centralia operations with strong performance by our fleet and growth from our Solomon acquisition,” Farrell said.
“Our cost reduction efforts from last year are holding and our teams are focused on growth. The addition of the New Richmond wind farm (in Quebec) will be a positive contribution to shareholder value going forward.”
The $213-million New Richmond wind farm, capable of producing 68 megawatts of electricity, began commercial production on March 13.
Overall fleet availability was 91.5 per cent in the quarter, compared with 21.7 per cent a year earlier, while product increased by 1,203 gigawatt hours to 10,644 GWh — a 12.7 per cent increase over the same period of 2012.
TransAlta produces and sells electricity, most of which is powered by coal. Its plants also run on natural gas, hydro, biomass, wind and geothermal sources.
Last year, TransAlta and its partners scrapped a $1.4-billion project to capture carbon dioxide emissions from its Keephills 3 coal plant in Alberta and store them underground.
The idea behind Project Pioneer was to sell some of the CO2 to nearby energy producers, who would inject the gas into aging reservoirs in order to push more oil out. That, in turn, would prevent the greenhouse gases from escaping into the atmosphere.