-- Q1 2010 comparable(i) earnings per share of $0.31 versus $0.18 in Q1
2009
-- Cash flow from operations increased $91 million to $174 million
-- Fleet availability in the quarter of 91.4%
-- Completed Summerview II wind farm and announced 54 MW expansion of its
Kent Hills wind farm
-- Successfully completed a US $300 million senior notes offering
-- Announced Memorandum of Understanding with the State of Washington
TransAlta Corporation (TransAlta) (TSX: TA) (NYSE: TAC) today
reported comparable earnings for the first quarter of 2010 of $67
million ($0.31 per share) versus $36 million ($0.18 per share) for
the same period in 2009. Net earnings for the quarter were also $67
million ($0.31 per share) compared to $42 million ($0.21 per share)
in the first quarter of 2009.
Comparable earnings increased in the quarter due to higher fleet
availability and production as a result of lower planned and
unplanned outages primarily at the Alberta coal plants. Also
included in comparable earnings was a $10 million after tax
reduction in decommissioning costs related to Wabamun IV. These
gains were partially offset by lower electricity pricing in Alberta
and the Pacific Northwest.
"Our fleet performed well in the quarter with all key operating
parameters trending positively, and although wind volumes were
below historical averages in the first quarter, past years have
shown a recovery of volume in subsequent months in an El Nino
year," said Steve Snyder, TransAlta's president and CEO. "With over
90 per cent of our total portfolio contracted for the remainder of
the year sustaining our targeted operating performance will allow
us to achieve our earnings and cash flow objectives. However,
electricity markets continue to be challenging due to both low
prices and low demand. I do not expect to see these conditions
change quickly."
Cash flow from operations for the quarter was $174 million
compared to $83 million a year ago. The increase in cash flow from
operations was primarily related to more favourable movements in
working capital. For the full year, TransAlta expects to achieve
$850 - $950 million in cash flow from operations.
Fleet availability for the first quarter increased to 91.4 per
cent compared to 86.4 per cent in the first quarter of 2009 due to
lower planned outages at the Keephills and Sundance plants and
lower unplanned outages at the Keephills and Wabamun plants. For
the year, TransAlta expects total fleet availability to average
approximately 90 per cent.
(i)Presenting comparable earnings from period to period is
provided to help management and shareholders evaluate earnings
trends more readily in comparison with prior periods' results. An
explanation and reconciliation of this non-GAAP financial measure
can be found beginning on page 22 of the MD&A.
In the quarter, TransAlta began commercial operations of its 66
MW Summerview II wind facility and announced a $100 million, 54 MW
expansion to its Kent Hills wind farm. The Kent Hills expansion was
awarded a 25-year power purchase agreement (PPA) with the New
Brunswick Power Distribution and Customer Service Corporation. The
expansion is expected to begin commercial operations by the end of
2010. The company also retired its Wabamun IV unit on March 31. The
Wabamun power station served Alberta electricity customers for 54
years.
Also during the quarter, TransAlta successfully completed a US
$300 million offering of 6.50 per cent senior notes due in 2040.
Proceeds from the issuance are being used to repay borrowings under
existing credit facilities and for general corporate purposes.
Subsequent Events
On April 26, 2010 TransAlta announced it signed a memorandum of
understanding (MOU) with the State of Washington to enter
discussions on an agreement to significantly reduce greenhouse gas
emissions from the Centralia coal-fired plant and provide
replacement capacity by 2025.
The MOU reflects a shared interest between TransAlta, Gov. Chris
Gregoire and the Washington state Department of Ecology in reducing
emissions while providing Washington citizens and businesses with
secure, reliable power. It sets forth clear objectives and a
definitive timeline to develop an agreement to transition the state
to cleaner energy sources while protecting jobs and the local
economy. The MOU also recognizes the need to protect the value that
Centralia brings to TransAlta's shareholders.
The MOU follows Gov. Gregoire's 2009 Executive Order on Climate
Change which directed the Washington state Department of Ecology to
work with TransAlta to reduce the Centralia facility's greenhouse
gas emissions by 2025.
First Quarter 2010 Highlights:
----------------------------------------------------------------------------
In millions, unless otherwise stated 3 months ended 3 months ended
March 31, 2010 March 31, 2009
----------------------------------------------------------------------------
Availability (%) 91.4 86.4
----------------------------------------------------------------------------
Production (GWh) 12,914 12,173
----------------------------------------------------------------------------
Revenue $ 723 $ 756
----------------------------------------------------------------------------
Gross margin(1) $ 401 $ 381
----------------------------------------------------------------------------
Operating income(1) $ 131 $ 85
----------------------------------------------------------------------------
Net earnings $ 67 $ 42
----------------------------------------------------------------------------
Comparable earnings(1) $ 67 $ 36
----------------------------------------------------------------------------
Basic and diluted earnings per share $ 0.31 $ 0.21
----------------------------------------------------------------------------
Comparable earnings per share(1) $ 0.31 $ 0.18
----------------------------------------------------------------------------
Earnings before interest, taxes,
depreciation, and amortization
(EBITDA)(1) $ 245 $ 212
----------------------------------------------------------------------------
Cash flow from operations $ 174 $ 83
----------------------------------------------------------------------------
Cash flow from operations per share(1) $ 0.79 $ 0.42
----------------------------------------------------------------------------
(1)Gross margin, operating income, comparable earnings, comparable earnings
per share, EBITDA, and cash flow from operations per share are not
defined under Canadian GAAP. Refer to the non-GAAP financial measures
section beginning on page 22 of the MD&A for an explanation and
reconciliation.
The complete first quarter report for 2010, including
Management's Discussion and Analysis and unaudited financial
statements, is available on the Investors section of our website:
www.transalta.com.
TransAlta will hold a conference call and web cast at 9 a.m. MT
(11 a.m. ET) today to discuss results. The call will begin with a
short address by Steve Snyder, President and CEO, and Brian Burden,
Chief Financial Officer, followed by a question and answer period
for investment analysts, investors, and other interested parties. A
question and answer period for the media will immediately
follow.
Please contact the conference operator five minutes prior to the
call, noting "TransAlta Corporation" as the company and "Jennifer
Pierce" as moderator.
Dial-in numbers:
For local Toronto participants - 1-416-340-8061
Toll-free North American participants - 1-866-225-0198
A link to the live webcast will be available via TransAlta's
website, www.transalta.com, under Web Casts in the Investor
Relations section. If you are unable to participate in the call,
the instant replay is accessible at 1- 800-408-3053 with TransAlta
pass code 2235047. A transcript of the broadcast will be posted on
TransAlta's website once it becomes available.
Note: If using a hands-free phone, lift the handset and press
one to ask a question.
TransAlta is a power generation and wholesale marketing company
focused on creating long-term shareholder value. TransAlta
maintains a low-to-moderate risk profile by operating a highly
contracted portfolio of assets in Canada, the United States and
Australia. TransAlta's focus is to efficiently operate our biomass,
geothermal, wind, hydro, natural gas and coal facilities in order
to provide our customers with a reliable, low-cost source of power.
For 100 years, TransAlta has been a responsible operator and a
proud contributor to the communities where we work and live.
TransAlta is recognized for its leadership on sustainability by the
Dow Jones Sustainability North America Index, the FTSE4Good Index
and the Jantzi Social Index.
This news release may contain forward-looking statements,
including statements regarding the business and anticipated
financial performance of TransAlta Corporation. These statements
are based on TransAlta Corporation's belief and assumptions based
on information available at the time the assumption was made. These
statements are subject to a number of risks and uncertainties that
may cause actual results to differ materially from those
contemplated by the forward-looking statements. Some of the factors
that could cause such differences include legislative or regulatory
developments, competition, global capital markets activity, changes
in prevailing interest rates, currency exchange rates, inflation
levels and general economic conditions in geographic areas where
TransAlta Corporation operates.
Note: All financial figures are in Canadian dollars unless noted
otherwise.
Contacts: TransAlta Corporation Jennifer Pierce Vice President,
Communications & Investor Relations (403) 267-7622 TransAlta
Corporation Jess Nieukerk Manager, Investor Relations (403)
267-3607 investor_relations@transalta.com www.transalta.com
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