CALGARY, Feb. 28, 2020 /CNW/ -
Full-Year 2019 Financial Highlights
- Comparable EBITDA(1) of $438 million, two per cent higher than last year;
- Adjusted funds from operations ("AFFO")(1) of $343 million, in-line with 2018; and
- Cash available for distribution ("CAFD")(1) of $293 million or $1.11 per share.
TransAlta Renewables Inc. ("TransAlta Renewables" or the "Company") (TSX: RNW) announced today solid financial results which were at the upper-end of its guidance for the three months and year ended December 31, 2019, along with its 2020 outlook.
Comparable EBITDA decreased by $9 million in the fourth quarter of 2019 compared to the same period in 2018, primarily due to lower revenues from Canadian Wind due to the timing of recognition of environmental attributes and incentives, lower earnings from Canadian Gas due to a one-time positive market pricing event in 2018, lower earnings from Australia due to the weakening of the Australian dollar relative to the Canadian dollar and higher litigation costs. These were partially offset by the receipt of insurance proceeds related to a fire at Summerview.
Full year Comparable EBITDA increased $8 million to $438 million compared to 2018, mainly due to the inclusion of a full year of results from the Lakeswind wind farm and the Mass Solar facility and the receipt of insurance proceeds related to 2018 tower fires at the Summerview and Wyoming wind farms, partially offset by an unfavourable foreign exchange impact on the Australian Gas operations due to the weakening Australian dollar relative to the Canadian dollar.
Higher Comparable EBITDA, lower interest expense and higher interest income contributed positively to higher AFFO and CAFD, but were offset by higher current income tax expense and higher tax equity distributions. Overall, our AFFO of $343 million was consistent with 2018. AFFO for 2018 was positively impacted by the change in long-term receivable in our Australian Gas business segment. CAFD decreased by $2 million year-over-year to $293 million, due to higher principal repayments on the amortizing debt and finance leases.
Net earnings attributable to common shareholders decreased by $57 million. The decrease was attributable to a reduction in finance income of $53 million primarily related to higher return of capital and redemptions compared to 2018, lower interest income of $37 million primarily due to the redemption of the Mandatory Redeemable Preferred Shares ("MRPS"), higher foreign exchange losses of $37 million recorded on the preferred shares tracking the amortizing term loan of TransAlta Energy (Australia) Pty Ltd ("TEA"), an Australian subsidiary of TransAlta, and higher depreciation expense of $14 million mainly due to changes in wind component useful lives, partially offset by an increase in the change in fair value of the preferred shares tracking the amortizing term loan of $50 million and a decrease of interest expense of $6 million.
The Company also declared a monthly dividend of $0.07833 per common share for holders of record on April 15, 2020, May 15, 2020, and June 15, 2020 payable on each of April 30, 2020, May 29, 2020 and June 30, 2020.
Subsequent Events
- On January 7, 2020, it was announced that the Big Level and the Antrim wind farms began commercial operation on December 19, 2019, and December 24, 2019, respectively. In conjunction with the Big Level and Antrim wind farms reaching commercial operation, approximately $166 million (US$126 million) of tax equity financing proceeds were raised by the project entities to partially fund the projects. From the tax equity proceeds, a subsidiary of TransAlta repaid $52 million (US$40 million) of interest-bearing promissory notes issued by the Company to fund the construction of the Big Level and Antrim wind farms. The remaining amount of the tax equity proceeds is held as reserves within the project entity and will be released upon certain conditions being met. Once these conditions are met, the reserves will be released and the subsidiary of TransAlta will repay the remaining outstanding interest-bearing promissory notes to the Company.
"Results for the year demonstrated the strengths and resilience of the diversified TransAlta Renewables platform and highlighted the stability in our cash flows, " said John Kousinioris, President. "With the commissioning of the Big Level and Antrim wind farms late in December of 2019, our focus now turns to the execution of additional drop-downs from TransAlta's Clean Energy Investment Plan and the pursuit of further transactions to expand our fleet."
2020 Outlook
The following table outlines TransAlta Renewables' financial targets for 2020:
|
In $CAD millions
|
2019 Results
|
2019 Outlook
|
2020 Outlook
|
|
Comparable EBITDA
|
438
|
425 - 455
|
445 - 475
|
|
AFFO
|
343
|
320 - 350
|
350 - 380
|
|
CAFD
|
293
|
270 - 300
|
300 - 330
|
We expect renewable energy production from our wind and hydro assets, including those owned through economic interests, in 2020 to be in the range of 4,100 to 4,500 GWh. Our gas-fired generation primarily provides compensation for capacity, and accordingly, production is not a significant performance indicator of that business.
The following table depicts key financial results and statistical operating data:
Fourth Quarter and Year Ended December 31, 2019 Highlights
|
In $CAD millions, unless otherwise stated
|
Three Months Ended
|
Year Ended
|
|
Dec. 31, 2019
|
Dec. 31, 2018
|
Dec. 31, 2019
|
Dec. 31, 2018
|
|
Renewable energy production (GWh)(2)
|
1,173
|
1,107
|
3,747
|
3,652
|
|
Revenues
|
119
|
140
|
446
|
462
|
|
Net earnings attributable to common shareholders
|
48
|
93
|
179
|
236
|
|
Comparable EBITDA(1)(3)
|
125
|
134
|
438
|
430
|
|
Adjusted funds from operations(1)
|
100
|
108
|
343
|
343
|
|
Cash flow from operating activities
|
73
|
103
|
331
|
385
|
|
Cash available for distribution(1)
|
77
|
85
|
293
|
295
|
|
Net earnings per share attributable to common shareholders, basic and diluted
|
0.18
|
0.35
|
0.68
|
0.92
|
|
Adjusted funds from operations per share(1)
|
0.38
|
0.41
|
1.30
|
1.33
|
|
Cash available for distribution per share(1)
|
0.29
|
0.32
|
1.11
|
1.15
|
|
Dividends declared per common share
|
0.23
|
0.23
|
0.94
|
0.94
|
|
Dividends paid per common share(4)
|
0.23
|
0.23
|
0.94
|
0.94
|
The following tables provide further detail on the allocation of the Comparable EBITDA between owned assets and assets in which TransAlta Renewables holds an economic interest; as well as a reconciliation to AFFO.
|
Three Months Ended December 31 ($CAD millions)
|
2019
|
2018
|
|
|
Owned Assets
|
Economic
Interest
|
Total
|
Owned Assets
|
Economic
Interest
|
Total
|
|
|
Comparable EBITDA(1)
|
77
|
48
|
125
|
91
|
43
|
134
|
|
|
Interest expense
|
(11)
|
—
|
(11)
|
(10)
|
—
|
(10)
|
|
|
Change in long-term receivable
|
—
|
—
|
—
|
—
|
5
|
5
|
|
|
Sustaining capital expenditures
|
(8)
|
(2)
|
(10)
|
(14)
|
(3)
|
(17)
|
|
|
Current income tax expense
|
(1)
|
(2)
|
(3)
|
(2)
|
(2)
|
(4)
|
|
|
Tax equity distributions
|
—
|
(2)
|
(2)
|
—
|
(1)
|
(1)
|
|
|
Distributions paid to subsidiaries' non-controlling interest
|
(1)
|
—
|
(1)
|
(1)
|
—
|
(1)
|
|
|
Realized foreign exchange gain
|
3
|
—
|
3
|
—
|
—
|
—
|
|
|
Insurance recovery
|
—
|
(5)
|
(5)
|
—
|
—
|
—
|
|
|
Provisions
|
—
|
—
|
—
|
(2)
|
—
|
(2)
|
|
|
Currency adjustment, reserves, interest income and other
|
2
|
2
|
4
|
—
|
4
|
4
|
|
|
AFFO(1)
|
61
|
39
|
100
|
62
|
46
|
108
|
|
|
Year Ended December 31 ($CAD millions)
|
2019
|
2018
|
|
Owned Assets
|
Economic
Interest
|
Total
|
Owned Assets
|
Economic
Interest
|
Total
|
|
Comparable EBITDA(1)
|
272
|
166
|
438
|
270
|
160
|
430
|
|
Interest expense
|
(41)
|
—
|
(41)
|
(48)
|
—
|
(48)
|
|
Change in long-term receivable
|
—
|
—
|
—
|
—
|
14
|
14
|
|
Sustaining capital expenditures
|
(30)
|
(7)
|
(37)
|
(34)
|
(4)
|
(38)
|
|
Current income tax expense
|
(2)
|
(8)
|
(10)
|
(6)
|
(1)
|
(7)
|
|
Tax equity distributions
|
—
|
(6)
|
(6)
|
—
|
(3)
|
(3)
|
|
Distributions paid to subsidiaries' non-controlling interest
|
(5)
|
—
|
(5)
|
(4)
|
—
|
(4)
|
|
Realized foreign exchange loss
|
(1)
|
—
|
(1)
|
—
|
—
|
—
|
|
Insurance recovery
|
(4)
|
(5)
|
(9)
|
—
|
(6)
|
(6)
|
|
Currency adjustment, reserves, interest income and other
|
8
|
6
|
14
|
3
|
2
|
5
|
|
AFFO(1)
|
197
|
146
|
343
|
181
|
162
|
343
|
TransAlta Renewables is in the process of filing its Annual Information Form, Audited Consolidated Financial Statements and accompanying notes, as well as the associated Management's Discussion and Analysis ("MD&A"). These documents will be available today through TransAlta Renewables' website at www.transaltarenewables.com or through SEDAR at www.sedar.com.
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 section 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 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) During the first quarter of 2019, we revised Comparable EBITDA to remove the unrealized mark-to-market (gains) losses.
|
|
|
(4) Includes DRIP payments.
|
About TransAlta Renewables Inc.
TransAlta Renewables is among the largest of any publicly traded renewable independent power producers ("IPP") in Canada. Our asset platform and economic interests are diversified in terms of geography, generation and counterparties and consist of interests in 23 wind facilities, 13 hydroelectric facilities, seven natural gas generation facilities, one solar facility and one natural gas pipeline, representing an ownership interest of 2,527 megawatts of owned generating capacity, located in the provinces of British Columbia, Alberta, Ontario, Québec, New Brunswick, the States of Wyoming, Massachusetts, Minnesota and the State of Western Australia. Our objectives are to (i) provide stable, consistent returns for investors through the ownership of, and investment in, highly contracted renewable and natural gas power generation and other infrastructure assets that provide stable cash flow primarily through long-term contracts with strong counterparties; (ii) pursue and capitalize on strategic growth opportunities in the renewable and natural gas power generation and other infrastructure sectors; (iii) maintain diversity in terms of geography, generation and counterparties; and (iv) pay out 80 to 85 per cent of cash available for distribution to the shareholders of the Company on an annual basis.
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: our strategy and growth plans; ability to provide stable, consistent returns for investors through the ownership of, and investment in, highly contracted renewable and natural gas power generation and other infrastructure assets; ability to capitalize on strategic growth opportunities in the renewable and natural gas power generation and other infrastructure sectors, including through drop-downs from TransAlta; the continued stability of our cash flows; the Company's financial targets for 2020, including Comparable EBITDA, AFFO and CAFD, and renewable energy production; maintaining diversity in terms of geography, generation and counterparties; and paying out 80 to 85 per cent of cash available for distribution to the shareholders of the Company on an annual basis. The forward-looking statements contained in this news release are based on current expectations, estimates, projections and assumptions, having regard to the Corporation's experience and its perception of historical trends, and includes, but is not limited to, expectations, estimates, projections and assumptions relating to: foreign exchange rates; global economic growth; electricity load growth; interest rates; sufficiency of our budgeted capital expenditures in carrying out our business plan; applicable laws, regulations and government policies; the availability and cost of labour, services and infrastructure; and the satisfaction by third parties of their obligations, including under power purchase agreements. 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: competitive factors in the renewable power industry; operational breakdowns, failures, or other disruptions; changes in economic and market conditions; continued access to debt, tax equity, and capital markets; changes in tax, environmental, and other laws and regulations; adverse weather impacts; 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 Annual Information Form for the year ended December 31, 2019. 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.
SOURCE TransAlta Renewables Inc
View original content: http://www.newswire.ca/en/releases/archive/February2020/28/c1758.html
Investor Inquiries: Phone: 1-800-387-3598 in Canada and U.S., Email: investor_relations@transalta.com; Media Inquiries: Phone: Toll-free media number: 1-855-255-9184, Email: ta_media_relations@transalta.comCopyright CNW Group 2020
