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TransAlta Renewables Reports First Quarter 2018 Results

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TransAlta Renewables Reports First Quarter 2018 Results

Canada NewsWire

CALGARY, May 10, 2018 /CNW/ -

First Quarter 2018 Financial Highlights

  • Comparable EBITDA(1) of $111 million was consistent with last year;
  • Adjusted funds from operations(1) increased $14 million over Q1 2017; and
  • Cash available for distribution(1) increased approximately 16% year-over-year.

TransAlta Renewables Inc. ("TransAlta Renewables" or the "Company") (TSX:RNW) today reported its financial results for the three months ended March 31, 2018. Comparable EBITDA of $111 million was consistent with last year.  Cash available for distribution for the first quarter was $96 million, an increase of $13 million compared to 2017.  

Reported net earnings attributable to common shareholders increased $39 million primarily as a result of the Class B shares fair value loss of $44 million in the prior year, and higher finance income of $15 million this year, which was partially offset by a lower foreign exchange gain of $25 million.

"Results for the quarter were strong and highlighted the stability in the cash flows from our business," said John Kousinioris, President. "We are now focused on the construction of our Kent Hill wind farm expansion and progressing our two new US Wind Projects."

2018 Highlights and Subsequent Events

  • On February 20, 2018, we entered into an arrangement to acquire two construction-ready wind projects in the Northeast United States. The wind development projects consist of: (i) a 90 MW project located in Pennsylvania that has a 15-year power purchase agreement; and (ii) a 29 MW project located in New Hampshire with two 20-year power purchase agreements (collectively, the "US Wind Projects").  A subsidiary of TransAlta Corporation ("TransAlta") acquired the 90 MW project on March 1, 2018, whereas the acquisition of the 29 MW project remains subject to certain closing conditions.
  • On April 20, 2018, we acquired an economic interest in the US Wind Projects from a subsidiary of TransAlta pursuant to the terms of the arrangement entered into on February 20, 2018.  The remaining construction and acquisition costs of the US Wind Projects are to be funded by TransAlta Renewables and are estimated at US$240 million.  We expect to fund these costs through existing liquidity and tax equity. 
  • On May 1, 2018, we entered into a contract with a leading blockchain company to supply up to 35 MW of power and provide space at our Sarnia industrial park.  The contract has a 5-year term with an extension option for up to an additional five years.
  • TransAlta Corporation hosted its Annual General Meeting on April 20, 2018, during which it was announced that Donald Tremblay, former Chief Financial Officer, had decided to leave TransAlta and the Company effective May 8, 2018, and has relocated to eastern Canada. The Company thanks Mr. Tremblay for his contributions and leadership over the past four years. Todd Stack, TransAlta's Managing Director and Corporate Controller, has been appointed as Chief Financial Officer of TransAlta Renewables.

2018 Outlook

TransAlta Renewables reaffirms its financial outlook for 2018 which was released on February 23, 2018 and is outlined in the table below.

Measure


Low

High

Comparable EBITDA


$400 million

$420 million

Adjusted funds from operations


$315 million

$340 million

Cash available for distribution


$260 million

$290 million

 

The 2018 outlook includes expected revenues from long-term contracts and the sale of green attributes. We expect renewable energy production from our wind and hydro assets to be in the range of 3,400 to 3,800 GWh. Gas-fired generation primarily receives compensation for capacity, and accordingly, production is not a significant indicator of that business. TransAlta Renewables will continue to focus on growing cash available for distribution through the development and acquisition of highly diversified and contracted assets.

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

First Quarter 2018 Highlights

In $CAD millions, unless otherwise stated

3 months ended

March 31, 2018

3 months ended

March 31, 2017

Renewable energy production (GWh) (2)

1,004

1,010

Revenues

125

124

Comparable EBITDA

111

111

Adjusted funds from operations

97

83

Cash available for distribution

96

83

Net earnings attributable to common shareholders

66

27

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

0.26

0.12

Adjusted funds from operations per share(1)

0.39

0.37

Cash available for distribution per share(1)

0.38

0.37

Dividends paid per common share

0.23

0.22

Dividends declared per common share

0.23

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 adjusted funds from operations.

 

3 Months Ended March 31

($CAD millions)

2018

2017

Owned

Assets

Economic

Interest

Total

Owned

Assets

Economic

Interest

Total

Comparable EBITDA

74

37

111

74

37

111

Interest expense

(10)

-

(10)

(12)

-

(12)

Change in long term receivable

-

-

-

-

(9)

(9)

Sustaining capital expenditures

(5)

(1)

(6)

(5)

(1)

(6)

Current income tax expense

(2)

-

(2)

(2)

-

(2)

Distributions paid to subsidiaries'

non-controlling interest

-

-

-

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