Transalta shows consistency
Transalta is a wholesale power seller.It sells power to utilities.On October30,2015 it released it's third quarter results;it was basically consistent with the third quarter of 2014.This is a good result because power prices were lower than in 2014.It appears as if Transalta is riding out the storm of low power prices in Alberta although it is not over yet.Transalta's consistent power availability and earnings is largely due to their long term contracts and their hedging.75% of TA''s capacity is under contract until 2020.Consequently comparable EBITDA was $219 million or $7 million more than in Q3 2014.Funds from operations (FFO) was $126 million or $19 million lower than in Q3 2014.Their hedged contracts helped to reduce the difference from the higher spot prices in 2014.
Highlights of the Quarter
Transalta restructured their contractual agreements at their Poplar Creek facility.And the contract was extended from 2023 to 2030.As a result Transalta made a gain of $263 million.They also acquired two wind facilities with 65MW of power generation and a solar facility with 71 MW of power generation.Theses facilities were acquired in Massachusetts and Minnesota.In addition,they reduced corporate overhead by $25 million and made total cost savings of $47 million.And lastly they raised $442 million in long term financing for Transalta Renewables.The creation of Transalta Renewables(RNW) has allowed them to reduce debt and drop assets into this subsidiary.TA still owns 78 to 80 % of RNW.Transalta expects to drop more assets down in 2016;they might drop some Poplar Creek assets and their solar assets down.
Financial Statistics
The year to date comparable EBITDA was $677 million and comparable funds from operations was $497 million.This is a small reduction from$735 million and $537 million in 2014.The annual EBITDA is expected to be $980 million to $1010 in 2015.TA expects comparable EBITDA for 2016 to be in the range of $990 to $1010 million.This in spite of the lower spot prices for power.The two new wind farms were acquired for $138 million which can easily be covered by the gain on the Poplar Creek facilities.
There were quarterly gains in earnings in the Canadian coal facilities and the natural gas operations over the results in 2014.And reductions in earnings in the hydro operations from 2014.The gas operations got a contribution from the Australian operation that are in commission now.There will be no more shutdowns in the coal operations for maintenance updating.There are no results yet from their new power facility in South Hedland in Australia.
Summary of the Quarter
On balance, the results could have been much worse with the low power prices experienced in Alberta,it's major market.But the long term contracts and hedging kept their Q3 results roughly consistent with 2014.Transalta will have net gains with the creative financial lease at Poplar Creek.The proceeds can be used to acquire the new wind and solar faciliites.TA says that comparable funds from operations(FFO) were $1.78 per share for 9 months and should be about $2.25 for the year.Also they say that net earnings per share are $.55 per share.This puts their price/ earnings ratio at one of the lowest for an utility on the TSX index.However Transalta would like to see their share price to be consistent with that in Q3 of 2014 as then their share price would be around $12 to $14 .
see Blogdaleup for analysis of utilities;use Blogdaleup for analysis of utilities
Highlights of the Quarter
Transalta restructured their contractual agreements at their Poplar Creek facility.And the contract was extended from 2023 to 2030.As a result Transalta made a gain of $263 million.They also acquired two wind facilities with 65MW of power generation and a solar facility with 71 MW of power generation.Theses facilities were acquired in Massachusetts and Minnesota.In addition,they reduced corporate overhead by $25 million and made total cost savings of $47 million.And lastly they raised $442 million in long term financing for Transalta Renewables.The creation of Transalta Renewables(RNW) has allowed them to reduce debt and drop assets into this subsidiary.TA still owns 78 to 80 % of RNW.Transalta expects to drop more assets down in 2016;they might drop some Poplar Creek assets and their solar assets down.
Financial Statistics
The year to date comparable EBITDA was $677 million and comparable funds from operations was $497 million.This is a small reduction from$735 million and $537 million in 2014.The annual EBITDA is expected to be $980 million to $1010 in 2015.TA expects comparable EBITDA for 2016 to be in the range of $990 to $1010 million.This in spite of the lower spot prices for power.The two new wind farms were acquired for $138 million which can easily be covered by the gain on the Poplar Creek facilities.
There were quarterly gains in earnings in the Canadian coal facilities and the natural gas operations over the results in 2014.And reductions in earnings in the hydro operations from 2014.The gas operations got a contribution from the Australian operation that are in commission now.There will be no more shutdowns in the coal operations for maintenance updating.There are no results yet from their new power facility in South Hedland in Australia.
Summary of the Quarter
On balance, the results could have been much worse with the low power prices experienced in Alberta,it's major market.But the long term contracts and hedging kept their Q3 results roughly consistent with 2014.Transalta will have net gains with the creative financial lease at Poplar Creek.The proceeds can be used to acquire the new wind and solar faciliites.TA says that comparable funds from operations(FFO) were $1.78 per share for 9 months and should be about $2.25 for the year.Also they say that net earnings per share are $.55 per share.This puts their price/ earnings ratio at one of the lowest for an utility on the TSX index.However Transalta would like to see their share price to be consistent with that in Q3 of 2014 as then their share price would be around $12 to $14 .
see Blogdaleup for analysis of utilities;use Blogdaleup for analysis of utilities
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