Newalta Corporation
TSX : NAL

Newalta Corporation

January 19, 2009 08:00 ET

Newalta Provides Update on Capital Expenditures

CALGARY, ALBERTA--(Marketwire – January 19, 2009) - Newalta Inc. ("Newalta") (TSX:NAL) today provided an update on its capital expenditures for 2008 and 2009.

Management remains very disciplined in committing to capital investments in these times of market turmoil. A broad range of initiatives are underway to maximize performance of the business as well as improve financial flexibility.

Management deferred orders on long-delivery equipment and as a result, outstanding commitments are very modest. Total capital expenditures in 2008 are expected to be $125 million, comprised of growth capital expenditures of approximately $105 million, and maintenance capital of approximately $20 million. Capital investments in the first half of 2009 will be tightly controlled and are expected to total approximately $15 million, comprised of growth capital expenditures of $10 million, and maintenance capital of $5 million. The capital program for the remainder of 2009 will be established in the second quarter based on the performance of the business and the outlook for the market.

Actions to control costs and reduce debt including the control of all discretionary spending, travel and hiring restrictions, and the suspension of salary increases are expected to have a positive impact in the first quarter. As certain areas of Newalta's business are continuing to grow while others are facing weakened demand, management will reallocate people to retain the talent developed throughout the company, wherever possible.

Funded debt at the end of 2008 is expected to be substantially unchanged from the third quarter of 2008 at approximately $315 million. Newalta's funded debt consists of approximately $265 million of senior long term debt and $50 million of Letters of Credit which have been provided as security to certain environmental regulatory authorities to satisfy asset retirement obligations. Management is working with these authorities to provide alternative security arrangements to eliminate the need for the majority of the Letters of Credit. In addition, management is taking steps to improve working capital management, sell redundant assets, and tightly control capital investments. These initiatives are intended to reduce funded debt throughout 2009.

"Our priorities include driving performance from 2008 investments, controlling variable costs, minimizing capital investments and reducing funded debt," said Al Cadotte, President and CEO of Newalta. "We will remain disciplined in assessing investment opportunities in the current uncertain environment. Our focus is on strengthening our business as we deal with market challenges in the short term and position Newalta for improved markets in the future."

Newalta Inc. is Canada's largest industrial waste management and environmental services provider and focuses on maximizing the value inherent in industrial waste through the recovery of saleable products and recycling. It also provides environmentally sound disposal of solid, non-hazardous industrial waste. With talented people and a national network of facilities, Newalta serves customers in the automotive, forestry, lead, manufacturing, mining, oil and gas, petrochemical, pulp and paper, refining, steel and transportation service industries. Providing solid investor returns, exceptional customer service, safe operations and environmental stewardship has enabled Newalta to expand into new service sectors and geographic markets. Newalta trades on the TSX as NAL. For more information, visit www.newalta.com.

This news release contains statements that may constitute "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, among others, statements regarding business strategy, capital expenditures, funded debt levels and other expectations, beliefs, goals, objectives, information and statements about possible future events. Readers are cautioned not to place undue reliance on such forward-looking information. Forward-looking information is based on current expectations, estimates and assumptions that involve a number of risks, which could cause actual results to vary and in some instances to differ materially from those anticipated by Newalta and described in the forward-looking information contained in this news release. Among the various factors that could cause results to vary materially from those indicated in the forward-looking information include, but are not limited to, variations in operating results, successful implementation of growth opportunities, the aggregate funded debt levels of Newalta including the return of Letters of Credit and the timing thereof, industry conditions, fluctuations in commodity prices, the availability of financing alternatives, debt service and future capital needs. Readers should also be aware that the forward-looking information is also affected by the risk factors described in Newalta's Annual Information Form and those set forth from time to time in Newalta's continuous disclosure filings with Canadian securities regulatory authorities, which are available through Newalta's website at www.newalta.com and on the SEDAR website at www.sedar.com. No assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur or, if any of them do so, what benefits Newalta will derive therefrom.

Contact Information

  • Anne M. MacMicken
    Executive Director, Investor Relations
    Phone: (403) 806-7019