TransAlta Renewables Inc.
TSX : RNW

TransAlta Renewables Inc.

July 31, 2015 09:07 ET

TransAlta Renewables Reports Second Quarter 2015 Results

CALGARY, ALBERTA--(Marketwired - July 31, 2015) - TransAlta Renewables Inc. ("TransAlta Renewables" or the "Company") (TSX:RNW) today reported second quarter comparable EBITDA(1) of $51.7 million and FFO(1) of $43.4 million. Comparable EBITDA and FFO both increased $16.5 million in the quarter compared to the same period last year, primarily due to the contribution from the Company's investment in TransAlta's Australian assets which closed on May 7th, 2015. Comparable net earnings for the second quarter were $22.2 million ($0.14 per share), an increase of $16.3 million compared to $5.9 million ($0.05 per share) in the same period last year.

In May, the Company completed the $1.78 billion investment in an economic interest of TransAlta's 425 MW Australian gas-fired generation assets which are operational and contracted under long-term contracts, the 150 MW South Hedland Power Station, currently under construction, and the recently commissioned 270 kilometre gas pipeline, as well as committing to fund the remaining project costs for the South Hedland project.

"TransAlta Renewables continued to deliver solid operational performance in the second quarter," said Brett Gellner, President. "We continue to deliver on our strategy of diversifying and increasing the scale of the Company and growing the dividend. With the closing of the Australian transaction, we were able to increase the annual dividend by 9% and are targeting another 6-7% increase in 2017 once the South Hedland project is completed."

The South Hedland Power Station is currently under construction and tracking to plan. The power station is fully contracted and is expected to be commissioned in mid-2017. Bulk earthworks and soil remediation work is complete and civil work is now underway. All long lead equipment has been ordered and manufacturing is underway with no reported delays in delivery. The remaining project costs are estimated at $491 million and will be funded by TransAlta Renewables through a combination of internally generated cash flow and borrowings under a credit facility.

(1) Comparable EBITDA refers to Earnings before interest, taxes, depreciation and amortization and adjusted for certain other items. FFO refers to Funds from Operations. Cash available for distribution represents the amount the cash generated from operations, before changes in working capital and after sustaining and productivity capital, distributions to non-controlling interest and scheduled principal repayments of debts. Comparable EBITDA, funds from operations, cash available for distribution, comparable earnings, comparable earnings per share, funds from operations per share and cash available for distribution per share are not defined under International Financial Reporting Standards ("IFRS"). Presenting these measures 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 Management's Discussion and Analysis ("MD&A") for the quarter for further discussion of these items.

Summary of Results

Q2 2015 compared to Q2 2014

  • Comparable EBITDA of $51.7 million compared to $35.2 million for the same period last year
  • Funds from operations of $43.4 million compared to $26.9 million for the same period last year
  • Renewable energy production(2) of 698 GWh, compared to 743 GWh for the same period last year

Year-to-Date 2015

  • Comparable EBITDA of $105.5 million compared to $90.9 million for the same period last year
  • Funds from operations of $88.0 million compared to $73.3 million for the same period last year
  • Renewable energy production(2) of 1,656 GWh compared to 1,724 GWh for the same period last year

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

Second Quarter 2015 Highlights

In $CAD thousands, unless otherwise stated 3 months ended
June 30, 2015
3 months ended
June 30, 2014
6 months ended
June 30, 2015
6 months ended
June 30, 2014
Renewable energy production (GWh) 698 743 1,656 1,724
Revenue 51,277 50,013 119,433 117,978
Net earnings attributable to common shareholders 7,167 5,890 26,817 27,024
Comparable net earnings attributable to common shareholders 22,217 5,890 42,093 27,024
Comparable EBITDA 51,680 35,194 105,520 90,856
Funds from operations 43,402 26,950 88,001 73,304
Cash flow from operating activities 48,854 35,782 89,937 80,992
Cash available for distribution 38,983 22,936 69,266 39,771
Net earnings per share attributable to common shareholders, basic and diluted 0.04 0.05 0.19 0.24
Comparable earnings per share 0.14 0.05 0.31 0.24
Funds from operations per share 0.27 0.23 0.64 0.64
Cash available for distribution per share 0.24 0.20 0.50 0.35
Dividends paid per common share 0.20 0.19 0.39 0.38
(2) Includes production from our economic interest in the Wyoming Wind Farm and excludes Australian gas-fired generation

A complete copy of TransAlta Renewables' second quarter report including MD&A and unaudited financial statements is available through TransAlta Renewables' website at www.transaltarenewables.com or through SEDAR at www.sedar.com.

About TransAlta Renewables Inc.

TransAlta Renewables owns 16 wind and 12 hydroelectric power generation facilities, and holds economic interests in TransAlta's Wyoming Wind Farm and Australian Assets, having an aggregate installed generating capacity of 1,856 MW, in which it holds a net ownership interest of approximately 1,680 MW. TransAlta Renewables' economic interest in Australian assets consisting of 425 MW of power generation from six operating assets, which are operational and contracted under long-term contracts, and the 150 MW South Hedland project that is currently under construction, as well as the recently commissioned 270 km gas pipeline. TransAlta Renewables' power generating capacity is among the largest of any publicly-traded renewable independent power producer ("IPP") in Canada, with more wind power generating capacity than any other Canadian publicly-traded IPP. TransAlta Renewables' strategy is focused on the efficient operation of its portfolio of assets and expanding its asset base through the acquisition of high-quality contracted renewable and natural gas power generation facilities and other infrastructure assets. Our objectives are to (i) create stable, consistent returns for investors through the ownership of contracted renewable and, potentially, natural gas power generation and other infrastructure assets that provide stable cash flow through long-term contracts with creditworthy counterparties, including TransAlta Corporation; (ii) pursue and capitalize on strategic growth opportunities in the renewable and, natural gas power generation and other infrastructure sectors; and (iii) pay out a portion of cash available for distribution to the shareholders of the Company on a monthly basis.

Cautionary Statement Regarding Forward-Looking Information

This news release may contain forward-looking statements, including statements regarding the business and anticipated financial performance of the Company. 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, changes in tax, environmental, and other laws and regulations; competitive factors in the renewable power industry; operational breakdowns, failures, or other disruptions; changes in economic and market conditions; the effect, results and perceived benefits of the Australian investment, including forecasts of CAFD and expected CAFD per share accretion; the timing and completion and commissioning of projects under development, including the South Hedland project and the costs thereof; 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 and 2015 Annual Information Form for the year ended Dec. 31, 2014. 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 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.

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