Transalta Power is on a plateau until second half

       Like these mesas above Transalta Power has changed dramatically from 2015.It had much more assets and a bigger dividend and it traded around $12.00 to $13.00 per share.In 2016 it downloaded a bunch of assets to it's subsidiary Transalta Renewables which is itself a substantial sized utility.Downloading transfers the assets but gives it cash and a controlling share in the subsidiary.But investors didn't buy it and the stock plummeted to a low of $4.00 in 2016.It climbed back to $5.50 in 2016 and then into the $7.50 to $8.00 area now.
      Downloading to Transalta Renewables
    Transalta reported it's first quarter results and they were roughly equal to the first quarter of 2016.Revenues were up but comparable EBITDA was the same as was funds from operations (FFO).The 2017 results included a settlement from OEFC (Ontario government)of almost $35 million.They also sold 51% of their new wind facility called Wintering Hills for $61 million.This money was mostly used to reduce their debt. But Transalta has new facilities coming onstream in the latter part of the second half of 2017.
  First there will be new revenues and earnings still coming in from Wintering Hills.And increased revenues from their Australian assets.Their  main Australian asset is called South Hedland and it continues to progress.It should be fully commissioned by the end of the third quarter.TA counts on it to contribute about $80 million in comparable EBITDA annually.It has also accelerated the transition of it's coal-fired facilities to gas-fired.And it is getting a settlement for the transition of it's coal-fired facilities.And not to be forgotten is their substantial share of earnings from Transalta Renewables.
     The Second Half             

This blog expects that there will be an increase in comparable EBITDA in the second half,chiefly from the Australian assets.This will move the price of the shares up slightly.But Transalta will not likely get close to it's 2015 price levels without an increase in the dividend.Still it's flow of funds is almost $825 million on an annual basis and it's cash flow will be greater than $400 million.This will include annually $140 to $150 million of dividends from Transalta Renewables and a share of  RNW earnings.This means that a new acquisition and another site under construction is likely in 2017.This blog does not see further downloading of assets in 2017 or 2018.Transalta and it's subsidiary RNW generate enough cash to steadily march towards $8.25 to $8.40 by late 2017.    

www.albertacanada.com/business.aspx; use Blogdaleupsome for business forecasts  comments are welcome on this blog