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    TA TransAlta earns $186-million in Q1


    May 6, 2022 - Canada StockWatch

     

      TransAlta Corp (TSX:TA)

      Shares Issued 270,603,347

      Last Close 5/5/2022 $13.77

      Friday May 06 2022 - News Release

      Mr. John Kousinioris reports

      TRANSALTA REPORTS FIRST QUARTER 2022 RESULTS AND REACHES 40% OF RENEWABLES GROWTH TARGET

      TransAlta Corp. has released its financial results for the first quarter ended March 31, 2022.

      "TransAlta delivered solid first quarter results for 2022 with contributions from our new contracted assets at Windrise and North Carolina Solar which diversified our portfolio. I am also pleased to confirm that we are on track to deliver our objectives under our Clean Electricity Growth Plan," said John Kousinioris, President and Chief Executive Officer.

      "We delivered growth in renewable energy to new and existing customers in all three core geographies of our operations. We reached final investment decision on our 200 MW Horizon Hill project in Oklahoma by signing a long-term PPA with Meta. We fully contracted our Garden Plain facility by adding another long-term PPA for the remaining 30 MW of capacity with an investment-grade globally recognized customer. And in Western Australia, we reached final investment decision on the Mount Keith transmission expansion project which will enable the connection of additional generating capacity to our network and will support BHP's operations and increase their competitiveness as a supplier of low-carbon nickel."

      Alberta Electricity Portfolio

      The Alberta electricity portfolio generated gross margin of $161 million, a decrease of $19 million compared to the same period in 2021. Gross margin was impacted mainly as a result of weaker market conditions in February as compared to the same period in 2021. Ancillary services revenue from the Hydro segment was also lower in February as a result of these market conditions. In addition, the Gas and Energy Transition segment results were impacted by lower production due to higher dispatch optimization in response to market conditions, and higher gas costs, which was partially offset by our gas hedge positions, lower carbon costs, and higher realized prices in Alberta. The decrease in gross margins were partially offset by higher gross margins in the Wind and Solar segment mainly due to higher production and higher realized prices.

      The average pool price decreased from $95/MWh for the three months ending March 31, 2021 to $90/MWh for the same period in 2022. Pool prices were lower on average for the quarter compared to 2021, mainly as a result of fewer heating degree days as well as fewer planned and unplanned outages across the provincial gas assets.

      Hedged production for the balance of 2022 is 4,890 GWh at an average price of $73 per MWh.

      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 first quarter, TransAlta had access to $2.4 billion in liquidity, including $1.2 billion in cash and cash equivalents.

      Accelerated Clean Electricity Growth Plan

      On Sept 28, 2021, the Company announced the strategic targets associated with its Clean Electricity Growth Plan.

      As of May 5, 2022, we have made significant progress in achieving our growth goals. Refer to the Strategy and Capability to Deliver Results in the MD&A for further details.

      First Quarter Financial Results Summary

      Adjusted EBITDA(1) for the three months ended March 31, 2022 was $266 million, a decrease of $44 million, or 14% per cent compared to the same period in 2021, largely due to lower adjusted EBITDA at our Gas, Energy Transition, Hydro, and Energy Marketing segments and higher corporate costs. This was partially offset by higher adjusted EBITDA at our Wind and Solar segment.

      Earnings before income taxes for the three months ended March 31, 2022 increased by $221 million compared to the same period in 2021. Net earnings attributable to common shareholders for the three months ended March 31, 2022 was $186 million compared to a net loss of $30 million in the same period of 2021, an improvement of $216 million. The increase in earnings before income taxes and net earnings attributable to common shareholders in 2022 was largely driven by higher revenues from the Alberta Electricity Portfolio, lower carbon compliance costs and lower depreciation, mainly as a result of the completion of our coal-to-gas conversions and retirement of our coal assets compared to the same period in 2021. In addition, an asset impairment reversal driven by discount rate changes was recognized in 2022 compared to impairment charges in 2021. The higher net earnings attributable to common shareholders was also impacted by higher income tax recoveries in 2022.

      Cash flow from operating activities for the three months ended March 31, 2022 was $451 million, an increase of $194 million compared with the same period of 2021, primarily due to favourable changes in non-cash working capital and higher revenue attributable to the North American Gas assets, converted gas units and higher revenues in the Wind and Solar segment as well as lower fuel and purchased power and carbon compliance costs as the Company transitioned its units to natural gas.

      FCF(1) for the three months ended March 31, 2022, was $115 million, a decrease of $14 million compared with the same period of 2021, driven primarily by lower adjusted EBITDA, higher distributions paid to subsidiaries' non-controlling interests, partially offset by a decrease in sustaining capital spending related to lower planned maintenance turnarounds.

      Conference call

      TransAlta will hold a conference call and webcast at 9:00 a.m. MST (11:00 a.m. EST) today, May 6, 2022, to discuss our first quarter 2022 results. The call will begin with a short address by John Kousinioris, President and CEO, and Todd Stack, EVP 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.

      Dial-in numbers - First Quarter 2022 Results:

      Toll-free North American participants call: 1-888-664-6392

      A link to the live webcast will be available on the Investor Centre section of TransAlta's website. 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 pass code 261631 followed by the # sign. A transcript of the broadcast will be posted on TransAlta's website once it becomes available.

      About TransAlta Corp.

      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.

      We seek Safe Harbor.

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