Second Quarter 2020 Highlights
- Comparable EBITDA(1) of
$115 million , a$4 million or 4% improvement to the same period in 2019 - Adjusted funds from operations ("AFFO")(1) of
$90 million , a$10 million or 13% improvement to the same period last year - Cash available for distribution ("CAFD")(1) of
$67 million or$0.25 per share in the second quarter, an increase of 14% on a per share basis as compared to the same period in 2019
Year-to-Date 2020 Highlights
- Comparable EBITDA(1) of
$233 million , a$6 million increase over the same period last year - Adjusted funds from operations ("AFFO")(1) of
$184 million , a$10 million improvement to the same period in 2019 - Cash available for distribution ("CAFD")(1) of
$158 million or$0.59 per share in the quarter, an increase of 5% as compared to the same period last year
"Results for the quarter were solid and we are proud to be generating renewable power seamlessly for our customers throughout our regions during this unparalleled time. We were also able to continue to advance our discussions with TransAlta on dropdown opportunities in order to deliver our growth objectives," said
Comparable EBITDA for the three and six months ended
AFFO for the three and six months ended
Net earnings attributable to common shareholders for the three months ended
Net earnings attributable to common shareholders for the six months ended
COVID-19 Response Update
TransAlta Corporation ("TransAlta"), as the manager and operator of the Company's business and assets, formally implemented its business continuity plan on
All of our facilities, including those which we have economic interests through TransAlta, continue to remain fully operational and capable of meeting our customers' needs. We have modified our operating procedures and TransAlta has implemented safety protocols that are allowing all its office employees to now return to sites across the fleet by the end of July. The Company continues to work and serve all of our customers and counterparties under the terms of their contracts. We have not experienced interruptions to service requirements. Electricity and steam supply continue to remain a critical service requirement to all of our customers and have been deemed an essential service in our jurisdictions.
Although these are unprecedented times, the Company remains highly diversified with facilities that are highly contracted and located in various geographies. Our cash flows have been relatively unaffected in the quarter due to the high contractedness of our asset portfolio and financial strength of our customers. We continue to have a strong balance sheet with ample liquidity to provide added flexibility during this time.
The Company continues to maintain a strong financial position in part due to its long-term contracts. The Company currently has access to
Second Quarter Ended
In $CAD millions, unless otherwise stated | 3 Months Ended | 6 Months Ended | ||
Renewable energy production (GWh)(2) | 1,098 | 867 | 2,271 | 1,868 |
Revenues | 103 | 111 | 213 | 238 |
Net earnings attributable to common shareholders | 30 | 31 | 33 | 107 |
Comparable EBITDA(1) | 115 | 111 | 233 | 227 |
Adjusted funds from operations | 90 | 80 | 184 | 174 |
Cash flow from operating activities | 71 | 52 | 153 | 183 |
Cash available for distribution | 67 | 57 | 158 | 149 |
Net earnings per share attributable to common | 0.11 | 0.12 | 0.12 | 0.41 |
Adjusted funds from operations per share(1) | 0.34 | 0.30 | 0.69 | 0.66 |
Cash available for distribution per share(1) | 0.25 | 0.22 | 0.59 | 0.56 |
Dividends declared per common share | 0.23 | 0.23 | 0.47 | 0.47 |
Dividends paid per common share(3) | 0.23 | 0.23 | 0.47 | 0.47 |
The following tables provide further detail on the allocation of the Comparable EBITDA between owned assets and assets in which
3 Months Ended | 2020 | 2019 | |||||
Owned Assets | Economic | Total | Owned Assets | Economic | Total | ||
Comparable EBITDA | 64 | 51 | 115 | 71 | 40 | 111 | |
Interest expense | (10) | — | (10) | (10) | — | (10) | |
Sustaining capital | (4) | — | (4) | (10) | (2) | (12) | |
Current income tax | (1) | (6) | (7) | — | (2) | (2) | |
Tax equity distributions | — | (6) | (6) | — | (2) | (2) | |
Distributions paid to | (3) | — | (3) | (4) | — | (4) | |
Realized foreign exchange | — | — | — | (2) | — | (2) | |
Insurance recovery | — | — | — | (4) | — | (4) | |
Currency adjustment, | 2 | 3 | 5 | 3 | 2 | 5 | |
AFFO | 48 | 42 | 90 | 44 | 36 | 80 | |
6 Months Ended | 2020 | 2019 | |||||
Owned Assets | Economic | Total | Owned Assets | Economic | Total | ||
Comparable EBITDA | 131 | 102 | 233 | 145 | 82 | 227 | |
Interest expense | (20) | — | (20) | (20) | — | (20) | |
Sustaining capital | (6) | (3) | (9) | (17) | (3) | (20) | |
Current income tax | (1) | (7) | (8) | (1) | (4) | (5) | |
Tax equity distributions | — | (12) | (12) | — | (3) | (3) | |
Distributions paid to | (3) | — | (3) | (4) | — | (4) | |
Realized foreign exchange | (3) | — | (3) | (1) | — | (1) | |
Insurance recovery | — | — | — | (4) | — | (4) | |
Currency adjustment, | 4 | 2 | 6 | 3 | 1 | 4 | |
AFFO | 102 | 82 | 184 | 101 | 73 | 174 |
A complete copy of
Notes
(1) Comparable EBITDA refers to earnings before interest, taxes, depreciation and amortization including finance lease income and adjusted for certain other items. AFFO includes the deduction of sustaining capital expenditures and distributions to non-controlling interests and excludes the effects of timing and working capital on distributions from subsidiaries of TransAlta in which the Company holds an economic interest. CAFD refers to adjusted funds from operations less principal repayments of amortizing debt. These items are not defined under International Financial Reporting Standards ("IFRS"). Presenting these items 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 and Reconciliation of Non-IFRS Measures sections of the MD&A for further discussion of these items, including, where applicable, reconciliations to measures calculated in accordance with IFRS. |
(2) Includes production from Canadian Wind, Canadian Hydro and US Wind and Solar and excludes Canadian and Australian gas-fired generation. Production is not a key revenue driver for gas-fired facilities as most of their revenues are capacity-based. |
(3) Includes DRIP payments. |
About
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 "plans", "expects", "proposed", "will", "anticipates", "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 or TransAlta in response to the COVID-19 pandemic; the electricity and steam that is being provided by the Company continuing to be an essential service in the jurisdictions in which we operate; and access to liquidity. Forward-looking statements are subject to a number of significant risks, uncertainties and assumptions that could cause actual plans, performance, results or outcomes to differ materially from current expectations. Factors that may adversely impact what is expressed or implied by forward-looking statements contained in this news release include risks relating to the impact of COVID-19 and the associated general economic downturn, the impact of which will largely depend on the overall severity and duration of COVID-19 and the general economic downturn, which cannot currently be predicted, and which present risks including, but not limited to: more restrictive directives of government and public health authorities; reduced labour availability impacting our ability to continue to staff the Company's operations and facilities; impacts on the Company's ability to realize its growth goals, including acquiring assets from TransAlta; decreases in short-term and/or long-term electricity demand; increased costs resulting from the Company's efforts to mitigate the impact of COVID-19; deterioration of worldwide credit and financial markets that could limit the Company's ability to obtain external financing to fund its operations and growth expenditures; a higher rate of losses on accounts receivables due to credit defaults; further disruptions to the Company's supply chain; impairments and/or write-downs of assets; and adverse impacts on the Company's information technology systems and the Company's internal control systems as a result of the need to increase remote work arrangements, including increased cybersecurity threats. Other factors that may adversely impact the Company's forward-looking statements include, but are not limited to, risks relating to: operational risks involving the Company's facilities, including unplanned outages at such facilities; 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; and industry risks and competition. 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
Note: All financial figures are in Canadian dollars unless noted otherwise.
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