CALGARY, AB, Nov. 9, 2021 /PRNewswire/ -
Third Quarter 2021 Highlights
- Comparable EBITDA(1) of $381
million, an increase of $125
million or 49 per cent compared to the same period in
2020
- Free cash flow ("FCF")(1) of $189 million or $0.70 per share compared to $106 million or $0.39 per share, a 79 per cent increase on a
per-share basis over the same period in 2020
- Hydro segment delivered $82
million of comparable EBITDA, an increase of $54 million compared to the same period in
2020
- Alberta Thermal segment delivered $104
million of comparable EBITDA, an increase of $57 million compared to the same period in
2020
- Adjusted availability was 89.2 per cent compared to 91.5 per
cent for the same period in 2020, largely impacted by outages in
the Alberta fleet
Other Highlights
- Announced Clean Electricity Growth Plan, establishing targets
to deliver 2 GW of incremental renewables capacity with investment
of $3 billion by 2025
- Announced an 11 per cent increase to its common share dividend
and declared a dividend of $0.05 per
common share to be payable on Jan. 1,
2022 to shareholders of record at the close of business on
Dec. 1, 2021
- Announced the development of the 48 MW Northern Goldfields
Solar and Storage Project for BHP Billiton Nickel West, with full
notice to proceed issued to the EPC contractor and construction
activities expected to commence in the first quarter of 2022
- Announced the decision to suspend the Sundance Unit 5
repowering project and the retirements of Keephills Unit 1 at the
end of 2021, and Sundance Unit 4 in 2022, retiring approximately
1,200 MW of coal-fired capacity
Subsequent Events & Updates
- Closed the previously announced acquisition of the economic
interest of a 122 MW portfolio of operating solar facilities
located in North Carolina for
approximately US$99 million and the
assumption of tax equity obligations
- Completion of all construction activities at Windrise and
on-track to reach commercial operations in November of 2021
2021 Revised Outlook
With exceptional year-to-date
results, the Company has increased its 2021 outlook as set out
below:
- Comparable EBITDA range of $1.2
to $1.3 billion
- FCF range of $500 to $560 million
- Energy Marketing gross margin contribution range of
$195 to $210
million
TransAlta Corporation ("TransAlta" or the "Company") (TSX: TA)
(NYSE: TAC) today reported its financial results for the three and
nine months ended Sept. 30, 2021.
"We are pleased to report TransAlta delivered another
exceptional quarter. Our third quarter results continue to
exceed expectations with strong performance from our Alberta Hydro
and Thermal fleets, and from our Energy Marketing segment," said
John Kousinioris, President and
Chief Executive Officer. "With these results and continuing price
strength and demand and supply fundamentals in Alberta, we have the confidence to further
revise our outlook upwards for free cash flow in the
range of $500 and $560 million, exceeding our previous 2021
guidance range."
"On the growth front, we are also extremely pleased with the
closing of the North Carolina Solar acquisition. The portfolio
expands our solar footprint in a region where we see significant
growth opportunities as the state looks to decarbonize," said Mr.
Kousinioris.
Set out below are additional highlights from the quarter, as
well as more details regarding the Company's financial results,
liquidity and financial position.
Consolidated Financial Highlights
In C$ millions,
unless otherwise stated
|
3 Months
Ended
|
9 Months
Ended
|
Sept. 30,
2021
|
Sept. 30,
2020
|
Sept. 30,
2021
|
Sept. 30,
2020
|
Comparable
EBITDA(1)
|
$
|
381
|
|
$
|
256
|
|
$
|
993
|
|
$
|
693
|
|
Free cash
flow(1)
|
$
|
189
|
|
$
|
106
|
|
$
|
456
|
|
$
|
306
|
|
Adjusted availability
(%)(2)
|
89.2
|
|
91.5
|
|
87.5
|
|
92.0
|
|
Production
(GWh)
|
6,053
|
|
6,184
|
|
16,282
|
|
17,276
|
|
Revenues
|
$
|
850
|
|
$
|
514
|
|
$
|
2,111
|
|
$
|
1,557
|
|
Fuel and purchased
power(3)
|
$
|
327
|
|
$
|
214
|
|
$
|
782
|
|
$
|
523
|
|
Carbon
compliance(3)
|
$
|
47
|
|
$
|
38
|
|
$
|
139
|
|
$
|
118
|
|
Operations,
maintenance and administration
|
$
|
131
|
|
$
|
114
|
|
$
|
387
|
|
$
|
354
|
|
Net loss attributable
to common shareholders
|
$
|
(456)
|
|
$
|
(136)
|
|
$
|
(498)
|
|
$
|
(169)
|
|
Cash flow from
operating activities
|
$
|
610
|
|
$
|
257
|
|
$
|
947
|
|
$
|
592
|
|
Funds from
operations(1)
|
$
|
297
|
|
$
|
193
|
|
$
|
758
|
|
$
|
524
|
|
Net loss per share
attributable to common shareholders, basic and diluted
|
$
|
(1.68)
|
|
$
|
(0.50)
|
|
$
|
(1.84)
|
|
$
|
(0.61)
|
|
Funds from operations
per share(1)
|
$
|
1.10
|
|
$
|
0.70
|
|
$
|
2.80
|
|
$
|
1.90
|
|
Free cash flow per
share(1)
|
$
|
0.70
|
|
$
|
0.39
|
|
$
|
1.68
|
|
$
|
1.11
|
|
Dividends declared
per common share(4)
|
$
|
0.0450
|
|
$
|
0.0425
|
|
$
|
0.0900
|
|
$
|
0.1275
|
|
Dividends declared
per preferred share(5)
|
$
|
0.2484
|
|
$
|
0.2593
|
|
$
|
0.5075
|
|
$
|
0.7645
|
|
Notes
|
(1) These items
are not defined under IFRS. Presenting these items from period to
period provides management and investors with the ability to
evaluate earnings trends more readily in comparison with prior
periods' results. Refer to the Comparable EBITDA, Funds from
Operations and Free Cash Flow and Earnings and Discussion of
Consolidated Financial Results sections of the MD&A for further
discussion of these items, including, where applicable,
reconciliations to measures calculated in accordance with
IFRS.
|
(2) Prior period
adjusted availability has been revised to include the Hydro
segment.
|
(3) As of the
first quarter of 2021, carbon compliance costs have been
reclassified from fuel and purchase power costs and disclosed
separately. Prior periods have been adjusted for comparative
purposes.
|
(4) No dividends
were declared in the first quarter of 2021 as the quarterly
dividend related to the period was declared in December
2020.
|
(5) Weighted
average of the Series A, B, C, E, and G preferred share dividends
declared. Dividends declared vary year over year due to timing of
dividend declarations.
|
The Company reported exceptional third quarter 2021 results with
comparable EBITDA(1) of $381
million compared to $256
million in the same period of 2020. Funds from operations
("FFO")(1) were $297
million for the quarter compared to $193 million in the same period of 2020.
Comparable EBITDA for the three and nine months ended
Sept. 30, 2021 increased by
$125 million and $300 million,
respectively, compared with the same periods in 2020, largely due
to higher merchant prices in Alberta realized by the Alberta
Electricity Portfolio, and strong performance in the Energy
Marketing segment, which was partially offset by the retirement of
Centralia Unit 1 that occurred on Dec.
31, 2020. For the nine months ended Sept. 30, 2021, comparable EBITDA was also
partially offset by the unplanned short-term steam supply outages
at the North American Gas segment.
FCF, one of the Company's key financial metrics, totaled
$189 million and $456 million, respectively, for the three and
nine months ended Sept. 30, 2021, an
increase of $83 million and $150 million compared
to the same periods in 2020, driven primarily by higher comparable
EBITDA, partially offset by an increase in sustaining capital,
settlement of provisions and higher distributions paid to
subsidiaries' non-controlling interests.
Operations, maintenance and administration ("OM&A") expenses
for the three and nine months ended Sept.
30, 2021 increased by $17 million and $33 million,
respectively, compared to the same periods in 2020. For
the three and nine months ended Sept.
30, 2021, a writedown of $5
million and $30 million,
respectively, was recorded on parts and material inventory related
to the Highvale mine and coal operations at the gas-converted
facilities. In addition, for the three and nine months ended
Sept. 30, 2021, variability caused by
the total return swap resulted in an unfavourable change of
$1 million and a favourable change of $12 million,
respectively. During the first quarter of 2021, we also
received a Canada Emergency Wage
Subsidy ("CEWS") payment of $8
million. Excluding the impact of the total return swap, CEWS
funding and inventory writedowns, OM&A expenses were
higher for the three and nine months ended Sept. 30, 2021, compared to the same periods in
2020, primarily due to increased staffing costs for growth and
strategic initiatives, higher incentive costs and additional costs
associated with the settlement of provisions. As previously
committed, the CEWS funding continues to be used to support
incremental employment within the Company.
Net loss attributable to common shareholders, for the three and
nine months ended Sept. 30, 2021 was
$456 million and $498 million, respectively, compared to net
losses of $136 million and
$169 million, respectively, in the
same periods in 2020. For the three and nine months ended
June 30, 2021, net losses
attributable to common shareholders increased by $320 million and $329 million, respectively,
from the same periods in 2020, due to greater asset impairments and
expenses being incurred as a direct result of decisions to suspend
the Sundance 5 repowering project,
planned retirements of Sundance Unit 4 and Keephills Unit 1, the
final execution of our clean energy transition plan and higher
interest expense. These decisions were made based on our assessment
of future market conditions, the age and condition of the units and
the Company's strategic focus toward customer-centered renewable
energy solutions. In addition, on a year-to-date basis, there were
higher income taxes. This was partially offset by higher comparable
EBITDA, the gain on the sale of equipment at Alberta Thermal, lower
depreciation, an increase in finance lease income and higher
foreign exchange gains. In addition, on a year-to-date basis, there
was a gain on the sale of the Pioneer Pipeline.
Total year-to-date sustaining capital expenditures of
$144 million were $45 million higher compared to 2020 primarily due
to a higher level of planned major maintenance across
the segments.
Liquidity and Financial Position
The Company continues
to maintain a strong financial position in part due to long-term
contracts and hedged positions. At the end of the third quarter,
TransAlta had access to $2.3 billion
of liquidity, including $1.1 billion
of cash and cash equivalents.
Alberta Electricity Portfolio
On Dec. 31, 2020, the Alberta power purchase agreements ("PPAs")
expired and effective Jan. 1, 2021,
the applicable facilities began operating on a fully merchant basis
in the Alberta market, forming a
core part of the Alberta
electricity portfolio optimization activities. Optimization of
facilities is driven by the diversity in fuel types, which
enables portfolio management and allows for maximization of
operating margins. The Alberta
portfolio includes hydro, wind, energy storage and thermal units. A
portion of the baseload generation in the portfolio is hedged to
provide cash flow certainty.
For the nine months ended Sept. 30,
2021, the Hydro and Alberta Thermal segments achieved
realized power prices of $122 per MWh
and $94 per MWh, respectively,
compared to the Alberta spot price
which averaged $100 per MWh. The
Company was able to benefit during higher-priced periods by
optimizing dispatch in the Hydro and Alberta Thermal fleet,
ensuring high availability during peak demand, while hedged
positions at Alberta Thermal minimized unfavourable market pricing
during lower-priced hours in the quarter.
Hedged production at Sept. 30,
2021 for the fourth quarter is 1,407 GWh at $76 per MWh, and for the fiscal year 2022, hedged
production is 4,387 GWh at $71 per
MWh.
2021 Outlook
The Company is revising its 2021 outlook with comparable EBITDA
estimated to be between $1.2 and
$1.3 billion. The midpoint of the
range representing an additional 9 per cent increase over the
Company's previous 2021 outlook as at the second quarter.
FCF is now expected to be between $500 and $560
million. The midpoint of the range represents an additional
11 per cent increase over the Company's previous 2021 outlook.
The following table provides additional details pertaining to
the 2021 outlook:
Measure
(C$ millions
unless otherwise noted)
|
Revised
Outlook
|
Previous Outlook
as of Q2 2021
|
Comparable
EBITDA
|
$1,200 to
$1,300
|
$1,100 to
$1,200
|
FCF
|
$500 to
$560
|
$440 to
$515
|
Range of key power
price assumptions:
|
Market
|
Updated Power
Prices ($/MWh)
|
Previous Power
Prices ($/MWh)
|
Alberta
Spot
|
$95 to
$105
|
$80 to
$100
|
Mid-C Spot
(US$)
|
$50 to $60
|
$45 to $55
|
Other assumptions
relevant to 2021 financial outlook:
|
Sustaining
capital
|
$200 to
$225
|
$200 to
$225
|
Energy marketing
gross margin
|
$195 to
$210
|
$170 to
$200
|
Other Activities
Clean Electricity Growth
Plan
On Sept. 28, 2021, TransAlta held
its 2021 Investor Day and announced its Clean Electricity Growth
Plan. The Company has established targets to deliver 2 GW of
incremental renewables capacity with a targeted investment of
$3 billion by 2025. TransAlta will
accelerate its growth with a focus on customer-centred renewables
and storage through the execution of its 3 GW development
pipeline.
Increase in Common Share Dividend
On
Sept. 28, 2021, the Company announced
an 11 per cent increase on its common share dividend and declared a
dividend of $0.05 per common share to
be payable on Jan. 1, 2022 to
shareholders of record at the close of business on Dec. 1, 2021. The quarterly dividend of
$0.05 per common share represents an
annualized dividend of $0.20 per
common share.
North Carolina
Solar
On Nov. 5,
2021, the Company closed the previously announced
acquisition of a 122 MW portfolio of operating solar facilities
located in North Carolina
(collectively, "North Carolina Solar") for US$99 million (including working capital
adjustments) and the assumption of existing tax equity obligations.
The acquisition was funded using existing liquidity. At the closing
of the acquisition, TransAlta Renewables Inc. ("TransAlta
Renewables") acquired a 100 per cent economic interest in North
Carolina Solar from a wholly-owned subsidiary of TransAlta
through a tracking share structure. The portfolio consists of
20 operating facilities that were commissioned between November 2019 and May
2021. The facilities are secured by long-term PPAs with two
subsidiaries of Duke Energy Corporation ("Duke Energy"), with an
average remaining term of 12 years. Under the PPAs, Duke Energy
receives the renewable electricity, capacity, and environmental
attributes. Income distributions to the TransAlta Renewables
will be net of cash and tax attributes provided to the tax equity
investors. North Carolina Solar is
expected to generate an average annual EBITDA of approximately
US$9 million.
Northern Goldfields Solar and Storage
Project
On July 29, 2021,
TransAlta Renewables announced that Southern Cross Energy, a
subsidiary of the Company and an entity in which TransAlta
Renewables owns an indirect economic interest, had reached an
agreement to provide BHP Billiton Nickel West Pty Ltd. with
renewable electricity to its Goldfields-based operations through
the construction of the Northern Goldfields Solar and Storage
Project. The project comprises the 27 MW Mount Keith Solar Farm, 11
MW Leinster Solar Farm, 10 MW/5MWh Leinster battery energy storage
system and interconnecting transmission infrastructure, all of
which will be integrated into the 169 MW Southern Cross Energy
North remote network in Western
Australia. The project has reached full notice to proceed,
and construction activities are scheduled to start in the first
quarter of 2022 with completion of the project expected in the
second half of 2022. Total construction capital of the project is
estimated at approximately AU$73 million. The project is expected
to contribute between $8 and
$9 million of annual EBITDA.
Garden Plain Wind Project
The 130 MW Garden
Plain project, located approximately 30 km north of Hanna, Alberta has a long-term PPA with
Pembina Pipeline Corporation ("Pembina") pursuant to which Pembina
has contracted for the renewable electricity and environmental
attributes of 100 MW of the 130 MW Garden Plain wind project
("Garden Plain"). Initial construction activities are now underway
and completion of the project is expected in the second half of
2022. Total construction capital of the project is estimated at
approximately $195 million. The
project is expected to contribute between $14 and $18 million
of annual EBITDA.
Windrise Wind
All turbine erection activities
have now been completed at the 206 MW Windrise Wind project, with
final commissioning activities currently underway, and commercial
operation is tracking to be achieved in November 2021.
Clean Energy Transition
On July 19, 2021, the Company announced the
completion of the full conversion of Keephills Unit 2 from thermal
coal to natural gas. In February
2021, the Company also completed the coal-to-gas conversion
of Sundance Unit 6. Both Keephills Unit 2 and Sundance Unit 6
maintain the same generator nameplate capacity of 395 MW and 401
MW, respectively. The non-operated Sheerness Units 1 and 2 have
also been converted to gas. These conversion to gas projects will
reduce the CO2 emissions from these units by more than
half.
The Keephills Unit 3 coal-to-gas conversion began during the
third quarter of 2021, with expected completion in November.
We continue to progress the off-coal transition plan and are on
track to eliminate coal as a fuel source in Alberta by the end of 2021.
Suspension of Sundance Unit 5 Repowering Project and
Retirement of Alberta Coal Capacity
On Sept. 28, 2021, the Company announced the
decision to suspend the Sundance Unit 5 repowering project, retire
Keephills Unit 1 effective Dec. 31,
2021 and retire Sundance Unit 4 effective April 1, 2022.
During the quarter, the Company recorded a number of asset
impairment charges related to the Alberta Thermal segment
including:
- $190 million related to the
suspension of the Sundance Unit 5 Repowering Project, with an
additional $27 million provision
recorded for supplier settlements related to certain committed
equipment purchases, and a further $10
million impairment related to a supplier credit
- $78 million related to the
planned retirement of Keephills Unit 1, with an additional
$6 million expensed for amounts due
to contractors for not proceeding with the construction of
equipment
- $56 million related to the
planned retirement of Sundance Unit 4
- $185 million related to the
expected shut down the Highvale Mine at the end of 2021
Sarnia Recontracting
On May 12, 2021, the Company executed an Amended and
Restated Energy Supply Agreement with one of its large industrial
customers at the Sarnia
cogeneration facility which provides for the supply of electricity
and steam. This agreement will extend the term of the original
agreement from Dec. 31, 2022 to
Dec. 31, 2032. The agreement provides
that if the Company is unable to enter into a new contract with the
Ontario Independent Electricity System Operator ("IESO") or enter
into agreements with its other industrial customers at the
Sarnia cogeneration facility that
extend past Dec. 31, 2025, then this
agreement will automatically terminate on Dec. 31, 2025. The current contract with the IESO
in respect of the Sarnia
cogeneration facility expires on Dec. 31,
2025. The Company is in active discussions with the three
other existing industrial off-takers regarding extensions to their
supply of electricity and steam from the Sarnia cogeneration facility on comparable
terms. On July 19, 2021, the IESO
released its Annual Acquisition Report which included draft details
for mid- and long-term procurement mechanisms for capacity for 2026
and beyond for existing and new generation. The Company is
participating in the consultation process, seeking to secure a
contract extension for the Sarnia
cogeneration facility following the end of the current IESO
contract.
Kent Hills Wind Facility Outage
On Sept. 27, 2021, the Company's subsidiary, Kent
Hills Wind LP, experienced a single tower failure at its 167 MW
Kent Hills wind facility in Kent Hills, New Brunswick. The failure involved a
collapsed tower located within the Kent Hills 2 site. There
were no injuries as a result of the collapse. No one was in
the area when the incident occurred and there are no homes in the
immediate vicinity. The Company's emergency response team has
secured the area to ensure safety. This incident has resulted in an
impairment being booked against the turbine.
The facility consists of 50 turbines at Kent Hills 1 and Kent
Hills 2 and 5 turbines at Kent Hills 3. The turbines at the Kent
Hills 1 and Kent Hills 2 sites have been taken offline pending a
satisfactory independent engineering and safety assessment. The
engineering assessment, which is ongoing, has identified
sub-surface crack propagation at several of the foundations of the
turbines located at the Kent Hills 1 and Kent Hills 2 sites. As a
result, further inspection and testing will be required for all
turbines at Kent Hills 1 and 2 to determine the required
remediation plan, on a turbine-by-turbine basis. It is presently
expected that the outage at Kent Hills 1 and Kent Hills 2 will
require repairs or replacements for a significant portion of the
existing foundations. Foundation replacements would require
expenditures of approximately $1.5
million to $2.0 million per
foundation. The remediation plan is expected to be
implemented in 2022. The outage is expected to result in
foregone revenue of approximately $3.4
million per month on an annualized basis for so long as all
50 turbines are offline, based on average historical wind
production, with incremental revenue expected to be earned as the
wind turbines are returned to service. The foundation issues at the
Kent Hills 1 and Kent Hills 2 sites are unique to the design of
those sites and there is no indication of any foundation issue at
the Kent Hills 3 site nor any other wind sites in the fleet. The
Company is maintaining communication with all key stakeholders and
keeping them fully apprised of the situation.
The Company recognized an impairment of $2 million related to the Kent Hills tower
failure.
COVID-19 Response Update
The Company continues to
operate under its business continuity plan. As of
Nov. 15, 2021, TransAlta will
implement a two-phase mandatory rapid testing protocol for those
employees that are not fully vaccinated. The first phase will
commence on Nov. 15, 2021 to
Jan. 31, 2022 and will be paid by
TransAlta, requiring onsite testing every 72 hours at TransAlta's
cost. On or about Feb. 1, 2022, those
employees who are not fully vaccinated will be required to pay for
testing and provide TransAlta with proof of a negative test every
72 hours. Employees can be exempt from rapid testing if they are
able to provide proof of vaccination.
Segment Results
Third Quarter 2021
Segmented Results
Comparable EBITDA
(C$ millions)
|
3 Months
Ended
|
9 Months
Ended
|
Sept. 30,
2021
|
Sept. 30,
2020
|
Sept. 30,
2021
|
Sept. 30,
2020
|
Hydro
|
82
|
28
|
255
|
83
|
Wind and
Solar
|
55
|
36
|
186
|
171
|
North American
Gas
|
35
|
29
|
88
|
85
|
Australian
Gas
|
36
|
34
|
99
|
93
|
Alberta
Thermal
|
104
|
47
|
232
|
121
|
Centralia
|
35
|
49
|
61
|
109
|
Energy
Marketing
|
58
|
49
|
128
|
90
|
Corporate
|
(24)
|
(16)
|
(56)
|
(59)
|
Total Comparable
EBITDA(1)
|
381
|
256
|
993
|
693
|
- Hydro: Comparable EBITDA for the three and nine months ended
Sept. 30, 2021 increased by
$54 million and $172 million, respectively, compared with the
same periods in 2020. With strong availability during periods of
market volatility, the Company was able to capture higher energy
and ancillary service revenues. Comparable EBITDA also had a
favourable variance for the AESO transmission line loss recorded in
2020, which was offset by higher maintenance costs, higher
portfolio management services and increased dam safety staffing
costs. Portfolio management services support our strategy for
maximizing our overall return on assets in the merchant
Alberta electricity market.
- Wind and Solar: Comparable EBITDA for the three and nine months
ended Sept. 30, 2021, increased by
$19 million and $15 million, respectively, compared with the same
periods in 2020, primarily due to higher pricing in Alberta, new incremental production from the
Skookumchuck wind facility, the
sale of environmental attributes and a favourable variance for the
AESO transmission line loss recorded in 2020, which was partially
offset by lower production and the impact of the weakening U.S.
dollar.
- North American Gas: Comparable EBITDA for the three and nine
months ended Sept. 30, 2021,
increased by $6 million and
$3 million, respectively, compared to
the same periods in 2020, primarily due to higher production at the
Ada facility and higher realized pricing in Alberta, which was partially offset by
year-to-date unplanned short-term steam supply outages at
Sarnia.
- Australian Gas: Comparable EBITDA for the three and nine months
ended Sept. 30, 2021, increased by
$2 million and $6 million, respectively, compared with the same
periods in 2020. The increase was mainly due to the strengthening
of the Australian dollar relative to the Canadian dollar and the
Solomon meter station upgrade revenue recognised in 2021.
- Alberta Thermal: Comparable EBITDA for the three and nine
months ended Sept. 30, 2021,
increased by $57 million and
$111 million, respectively, compared
to the same periods in 2020. Higher availability during periods of
tight market conditions and higher Alberta pricing was partially offset by
increases in fuel and carbon compliance costs.
- Centralia: Comparable EBITDA
for the three months ended Sept. 30,
2021, decreased by $14
million, primarily due to the retirement of Centralia Unit 1
and higher fuel transportation costs, which was partially offset by
lower OM&A cost. Comparable EBITDA for the nine months ended
Sept. 30, 2021 decreased by
$48 million, due to planned and
unplanned outages during period of high merchant pricing and the
retirement of Centralia Unit 1, which was partially offset by lower
OM&A costs.
- Energy Marketing: Comparable EBITDA for three and nine months
ended Sept. 30, 2021 increased by
$9 million and $38 million respectively, compared with the same
period in 2020, due to favourable short-term trading of both
physical and financial power and natural gas products across all
North American markets. This was partially offset by OM&A
increases due to higher incentives related to stronger performance.
The Energy Marketing team was able to capitalize on short-term
arbitrage opportunities in the markets in which we trade without
materially changing the risk profile of the business unit.
- Corporate: Corporate overhead costs for the three months ended
Sept. 30, 2021, increased by
$8 million compared to the same
period in 2020, primarily due to higher incentive payments, higher
staffing costs, increases in insurance costs and realized losses
from the total return swap. Corporate costs for the nine months
ended Sept. 30, 2021 decreased by
$3 million, compared to the same
period in 2020, primarily due to the receipt of CEWS funding and
realized gains from the total return swap, partially offset by
higher incentive payments and legal dispute settlement costs. A
portion of the settlement costs of our employee share-based payment
plans is hedged by entering into total return swaps, which are cash
settled every quarter.
Conference call
TransAlta will hold a conference call
and webcast at 9:00 a.m. MT
(11:00 a.m. ET) today, Nov. 9, 2021, to discuss third quarter 2021
results. The call will begin with a short address by John Kousinioris, President and Chief Executive
Officer, and Todd Stack, Executive
Vice President, Finance and Chief Financial
Officer, followed by a question and answer period for
investment analysts and investors. A question and answer period for
the media will immediately follow.
Third Quarter 2021 Conference
Call:
Toll-free North American participants call:
1-888-664-6392
Webcast link:
https://produceredition.webcasts.com/starthere.jsp?ei=1503090&tp_key=b23b82c0c5
Related materials will be available on the Investor Centre
section of TransAlta's website at
http://www.transalta.com/investors/events-and-presentations. If you
are unable to participate in the call, the instant replay is
accessible at 1-888-390-0541 (Canada and USA toll free) with TransAlta passcode
481434 followed by the # sign. A transcript of the
broadcast will be posted on TransAlta's website once it becomes
available.
TransAlta is in the process of filing its unaudited interim
Consolidated Financial Statements and accompanying notes, as well
as the associated Management's Discussion & Analysis
("MD&A"). These documents will be available Nov. 9, 2021 on the Investor Centre of
TransAlta's website at www.transalta.com or through SEDAR at
www.sedar.com and EDGAR at www.sec.gov/edgar.shtml.
About TransAlta Corporation:
TransAlta owns, operates and develops a diverse fleet of
electrical power generation assets in Canada, the United
States and Australia with a
focus on long-term shareholder value. TransAlta provides
municipalities, medium and large industries, businesses and utility
customers with clean, affordable, energy efficient and reliable
power. Today, TransAlta is one of Canada's largest producers of wind power and
Alberta's largest producer of
hydroelectric power. For over 100 years, TransAlta has been a
responsible operator and a proud community-member where its
employees work and live. TransAlta aligns its corporate goals with
the UN Sustainable Development Goals and has been recognized by CDP
(formerly Climate Disclosure Project) as an industry leader on
Climate Change Management, having recently achieved an A-
score.
For more information about TransAlta, visit our web site at
transalta.com.
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 "expects", "plans", "will",
"develop", "continue", and similar expressions suggesting future
events or future performance. In particular, this news release
contains forward-looking statements, pertaining to, without
limitation, the following: the potential impact of COVID-19 on the
Company and the actions to be undertaken by the Company in response
to the COVID-19 pandemic; the Company's Clean Electricity Growth
Plan, including delivering 2 GW of incremental renewables capacity
with investment of $3 billion
by 2025; the conversion of Keephills Unit 3 and the timing thereof;
the suspension of the Sundance Unit 5 repowering project; the
Windrise wind project and the timing for commercial operation; the
status of the Company's other growth projects, including the
Northern Goldfields Solar Project, the North Carolina Solar
portfolio and the Garden Plain wind project, including the timing
and cost thereof and expected contributions to EBITDA; the
retirements of Keephills Unit 1 at the end of 2021 and Sundance
Unit 4 in 2022; the incident at the Kent Hills wind facility and
the extent of remediation that may be required, including the
timing and associated cost; financial outlooks, including the
revised outlook for Comparable EBITDA, FCF and Energy Marketing's
contributions to gross margin; sustaining capital spend in 2021;
the recontracting of the Sarnia
facility; and the optimization of the Alberta fleet, including as it pertains to
maintaining flexibility and high availability. The forward-looking
statements contained in this news release are based on many
assumptions, including, but not limited to, an Alberta spot price of $95 to $105/MWh and
Mid-C pricing of between $50 and
$60/MWh. The forward-looking
statements are also subject to a number of significant risks and
uncertainties that could cause actual plans, performance, results
or outcomes to differ materially from current expectation. Factors
that may adversely impact what is expressed or implied by the
forward-looking statements contained in this news release include
risks relating to: the impact of COVID-19, such as more restrictive
directives of government and public health authorities; reduced
labour availability; ;inability to staff the Company's construction
and operating activities; disruptions to the Company's supply
chain; impairments and/or write-downs of assets; adverse impacts on
the Company's information technology systems and the Company's
internal control systems; the price of electricity in Alberta or Mid-C differing significantly from
those assumptions noted above; operational risks involving the
Company's facilities, including unplanned outages at such
facilities; losses from Energy Marketing; the remediation at the
Kent Hills wind facility being more extensive or costly than
currently expected; adverse regulatory developments; disruptions in
the transmission and distribution of electricity; the effects of
weather and other climate-related risks; disruptions in the source
of water, wind, solar, or gas resources required to operate
our facilities; natural disasters; equipment failure and our
ability to carry out repairs in a cost-effective or timely manner;
decreases to the Company's relative efficiency and capacity
factors; and greater competition and other industry risks.
The foregoing risk factors, among others, are described in further
detail in the Company's Management's Discussion and Analysis and
Annual Information Form for the year ended Dec. 31, 2020, which are available on SEDAR at
www.sedar.com. 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 are 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
otherwise indicated.
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SOURCE TransAlta Corporation