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TransAlta Renewables Reports First Quarter 2019 Results

CNW Group - Mon May 13, 4:57PM CDT

First Quarter 2019 Financial Highlights

--  Comparable EBITDA increased $6 million over Q1 2018 to $116
        million;
    --  Adjusted funds from operations decreased $3 million compared to
        Q1 2018; and
    --  Cash available for distribution decreased approximately 4%
        year-over-year.

TransAlta Renewables Inc. ("TransAlta Renewables" or the "Company") (TSX:RNW.TO) today reported its financial results for the three months ended March 31, 2019. Comparable EBITDA((1,2)) of $116 million was approximately 5% higher than last year. Cash available for distribution((1)) for the first quarter was $92 million, a decrease of $4 million compared to 2018, due to higher sustaining capital expenditures and a negative foreign exchange adjustment.

Reported net earnings attributable to common shareholders increased $10 million compared to the first quarter of 2018, primarily due to an increase in the fair value of preferred shares that track the underlying economics of an amortizing term loan held by TransAlta Energy (Australia) Pty Ltd. ("TEA"), partially offset by foreign exchange losses.

"Results in the first quarter were a great way to start off the year," said John Kousinioris, President. "We are excited to commission our two US wind projects later this year and continue to be focused on adding new accretive projects to the fleet."

2019 Highlights and Subsequent Events

--  In January of this year, the Company and TransAlta Corporation
        ("TransAlta") executed a series of transactions in response to
        the enactment of anti-hybrid tax rules within Australia. TEA
        redeemed its outstanding preferred shares and, immediately
        following the redemptions, the Company subscribed for preferred
        shares of a subsidiary of TransAlta which track the underlying
        economics of an amortizing term loan of TEA payable to another
        subsidiary of TransAlta.

    --  On March 28, 2019, a subsidiary of TransAlta closed the
        acquisition of the Antrim wind project which was previously
        announced on February 20, 2018. The Company has an economic
        interest in the 29 MW project, located in New Hampshire, which
        has two 20-year PPAs with counterparties which have Standard &
        Poor's credit ratings of A+ or better. Commercial operation of
        the Antrim wind project is expected during the second half of
        2019.

The following table depicts key financial results and statistical operating data:

First Quarter 2019 Highlights

In $CAD millions, unless otherwise stated

     3 months ended

     3 months ended



     March 31, 2019

     March 31, 2018

    ---


       Renewable energy production (GWh) (3)                                                         1,001                   1,004

    ---


       Revenues                                                                                        127                     125

    ---


       Comparable EBITDA(1,2)                                                                          116                     110

    ---


       Adjusted funds from operations(1)                                                                94                      97

    ---


       Cash available for distribution(1)                                                               92                      96

    ---


       Net earnings attributable to common shareholders                                                 76                      66

    ---

        Net earnings per share attributable to common shareholders, basic and diluted                  0.29                    0.26

    ---


       Adjusted funds from operations per share(1)                                                    0.36                    0.39

    ---


       Cash available for distribution per share(1)                                                   0.35                    0.38

    ---


       Dividends paid per common share                                                                0.23                    0.23

    ---


       Dividends declared per common share                                                            0.23                    0.23

    ---

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 adjusted funds from operations.

2019                        2018

                     3
                      Months
                      Ended
                      March
                      31

                      ($CAD
                      millions)

    ---

                       Owned    Economic Total   Owned    Economic    Total

                       Assets   Interest         Assets   Interest

            ---

         Comparable
         EBITDA                       74     42       116          73        37        110

    ---

         Interest
         expense                    (10)           (10)       (10)               (10)

    ---

         Sustaining
         capital
         expenditures                (7)   (1)      (8)        (5)      (1)       (6)

    ---

         Current
         income
         tax
         expense                     (1)   (2)      (3)        (2)                (2)

    ---

        Tax
         equity
         distributions                     (1)      (1)

    ---

        Provisions                                               2                   2

    ---

         interest
         income                        1               1           1                   1

    ---

         Foreign
         exchange
         adjustment                        (1)      (1)                   2          2

    ---

         Adjusted
         funds
         from
         operations                   57     37        94          59        38         97

    ---

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.

Notes




       (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 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 in
                  which the Company holds an economic
                  interest. Cash available for
                  distribution refers to adjusted
                  funds from operations less principal
                  repayments of amortizing debt. These
                  items are not defined under
                  International Financial Reporting
                  Standards ("IFRS"). 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 MD&A for
                  further discussion of these items,
                  including, where applicable,
                  reconciliations to measures
                  calculated in accordance with IFRS.




       (2)   During the first quarter of 2019, we
                  revised our approach to reporting
                  adjustments to arrive at comparable
                  EBITDA, mainly to be more comparable
                  with other companies in the
                  industry. Comparable EBITDA is now
                  adjusted to exclude the impact of
                  unrealized mark-to-market gains or
                  losses. Both the current and prior
                  period amounts have been adjusted to
                  reflect this change.



     (3)       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 21 wind facilities, 13 hydroelectric facilities, seven natural gas generation facilities, one solar facility and one natural gas pipeline, representing an ownership interest of 2,414 megawatts of owned generating capacity, located in the provinces of British Columbia, Alberta, Ontario, Québec, New Brunswick, the States of Wyoming, Massachusetts, Minnesota and the State of Western Australia. Our objectives are to (i) provide 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: commissioning the two US wind projects later this year; and adding new accretive projects to the Company's fleet. 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: competitive factors in the renewable power industry; operational breakdowns, failures, or other disruptions; changes in economic and market conditions; continued access to debt, tax equity, and capital markets; changes in tax, environmental, and other laws and regulations; 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, 2018 and 2019 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.

SOURCE TransAlta Renewables Inc

View original content: http://www.newswire.ca/en/releases/archive/May2019/13/c1930.html

SOURCE: TransAlta Renewables Inc

Investor Inquiries: Sally Taylor, Manager, Investor Relations, Phone: 1-800-387-3598
in Canada and U.S., Email: investor_relations@transalta.com; Media Inquiries: Phone:
1-855-255-9184, Email: ta_media_relations@transalta.com

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