Capital Power readies for 2017
Capital Power released it's third quarter results on October24.It showed increases over the same quarter of 2015.The CEO said that "Capital Power's financial results for the third quarter of 2016 were modestly ahead of management's expectations".
By the Numbers
This quarter showed better performance than then same quarter in 2015,for example, net income was $66 million or $.63 per share compared to $49 million or $.44 per share in 2015.Funds from operations (ffo) was $94 million compared to $97 million in 2015. FFO for 9 months was $309 million versus $275 million in 2015 and it is on track to hit $400 million for the year.In addition, for 9 months net income was $83 million compared to $55 million for 2015.While net cash flows were constant at $305 million for 9 months for both years. CPX was able to hedge a substantial amount of power at $70 per MWH compared to about $20 per MWH for the spot price.That allowed CPX to raise almost $400 million-$160 million of 10 year debt to Prudential Capital and $200 million of preferred shares.In addition, they got an extension of their $1 billion credit facilities.
Capital Power and Enmax will decide on whether to proceed with their Genesee 4 and 5 projects in the first quarter of 2017.This will partly depend on favourable conditions in the Alberta electricity market.The Bloom Wind project (in Kansas) has started construction in the third quarter of 2016 and is scheduled to finish in the third quarter of 2017.When finished this will add 178 MW of power to CPX's power generation capability.
The Fourth Quarter
2017 should be a good time to own CPX shares;it's dividend will be 7% higher and new revenues are coming in from a sizeable wind project plus from Genesee 4 and 5.But the fourth quarter of 2016 should be positive also.Last year in December Capital Power was trading around $22 a share.In comparison,the price in the first two quarters was about $18 a share.CPX had a rough time in the first two quarters;revenues were down and so were earnings.The spot price of electricity was low and remains so.But hedged prices have climbed and are now at about $70 per MWH.Look for the stock price to climb back to the $22 level where it was last December.Earnings have risen since the first two quarters and so has the dividend.
This quarter showed better performance than then same quarter in 2015,for example, net income was $66 million or $.63 per share compared to $49 million or $.44 per share in 2015.Funds from operations (ffo) was $94 million compared to $97 million in 2015. FFO for 9 months was $309 million versus $275 million in 2015 and it is on track to hit $400 million for the year.In addition, for 9 months net income was $83 million compared to $55 million for 2015.While net cash flows were constant at $305 million for 9 months for both years. CPX was able to hedge a substantial amount of power at $70 per MWH compared to about $20 per MWH for the spot price.That allowed CPX to raise almost $400 million-$160 million of 10 year debt to Prudential Capital and $200 million of preferred shares.In addition, they got an extension of their $1 billion credit facilities.
Capital Power and Enmax will decide on whether to proceed with their Genesee 4 and 5 projects in the first quarter of 2017.This will partly depend on favourable conditions in the Alberta electricity market.The Bloom Wind project (in Kansas) has started construction in the third quarter of 2016 and is scheduled to finish in the third quarter of 2017.When finished this will add 178 MW of power to CPX's power generation capability.
The Fourth Quarter
2017 should be a good time to own CPX shares;it's dividend will be 7% higher and new revenues are coming in from a sizeable wind project plus from Genesee 4 and 5.But the fourth quarter of 2016 should be positive also.Last year in December Capital Power was trading around $22 a share.In comparison,the price in the first two quarters was about $18 a share.CPX had a rough time in the first two quarters;revenues were down and so were earnings.The spot price of electricity was low and remains so.But hedged prices have climbed and are now at about $70 per MWH.Look for the stock price to climb back to the $22 level where it was last December.Earnings have risen since the first two quarters and so has the dividend.
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