TransAlta announces strong comparable first quarter earnings
April 21 2008 - 8:55AM
Marketwired
CALGARY, ALBERTA (TSX: TA) (NYSE: TAC) today reported comparable
earnings for the first quarter 2008 of $99 million ($0.50 per
share) versus $56 million ($0.28 per share) for the same period in
2007. Net earnings for the first quarter 2008 were $33 million
($0.17) compared to $56 million ($0.28 per share) in the first
quarter 2007.
"TransAlta's first quarter results reflect overall solid
performance across our assets and good market conditions coupled
with strong operations at Centralia Thermal," said Steve Snyder,
President and CEO. "They position us to deliver on our goal of
achieving low double digit comparable earnings per share growth for
the year."
In the quarter, TransAlta advanced key initiatives related to
its balanced capital allocation plan including portfolio
optimization and returning capital to shareholders through
dividends and share repurchases. In February, the company announced
an agreement for the sale of its Mexico business to InterGen for
$304 million cash and its plan to use a significant portion of the
proceeds to repurchase shares. Also in February, TransAlta's Board
announced an eight per cent increase to its annual dividend, and
subsequently in March, established a formal dividend policy with a
target payout ratio of 60 to 70 per cent of comparable
earnings.
Consistent with its commitment to disciplined growth, TransAlta
also announced today it is proceeding with a 53 MW efficiency
uprate at its Sundance plant in Alberta. The total capital cost of
the project is estimated at $75 million with commercial operations
expected to commence by the end of 2009. This is in addition to the
$115 million, 66 MW Blue Trail wind facility in Alberta announced
in the first quarter.
Comparable results in the quarter were driven by a $51 million
increase in gross margin, due to higher availability across the
fleet, greater production at Centralia Thermal, and stronger
pricing in TransAlta's core regions of Alberta and the Pacific
Northwest. Net earnings were lower year-over-year primarily due to
the after-tax equity loss of $65 million related to the write-down
of TransAlta's Mexico business.
Fleet availability for the three months ended March 31, 2008
increased to 91.8 per cent compared to 88.2 per cent in the same
period last year primarily due to lower derates at Centralia
Thermal. In the first quarter 2007 availability at Centralia
Thermal was negatively impacted as TransAlta conducted test burns
of Powder River Basin coal.
Cash flow from operations was $237 million compared to $331
million for the first quarter of 2007. First quarter 2008 cash flow
from operations includes $116 million of contractually scheduled
payments for 2007 that were collected Jan. 2, 2008. Cash flow in
the quarter was lower than the previous year due to higher
contractually scheduled PPA revenues of $185 million from 2006
being carried into the first quarter of 2007. Cash flow in the
first quarter of 2008 was also impacted by higher cash taxes paid
and timing of other working capital items.
(x) Presenting comparable earnings and gross margin from period
to period is provided to help management and shareholders evaluate
earnings trends more readily in comparison with prior periods'
results. An explanation and reconciliation of these non-GAAP
financial measures can be found beginning on page 16 of the
MD&A.
First Quarter 2008 Highlights:
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In millions, unless otherwise stated 3 months ended 3 months ended
March 31, 2008 March 31, 2007
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Availability (%) 91.8 88.2
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Production (GWh) 13,226 12,697
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Revenue $ 803 $ 669
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Gross margin(1) $ 433 $ 378
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Operating income (1) $ 189 $ 138
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Net earnings $ 33 $ 56
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Comparable earnings(1) $ 99 $ 56
----------------------------------------------------------------------------
Basic and diluted earnings per share $ 0.17 $ 0.28
----------------------------------------------------------------------------
Comparable earnings per share $ 0.50 $ 0.28
----------------------------------------------------------------------------
Cash flow from operations $ 237 $ 331
----------------------------------------------------------------------------
(1) Gross margin, operating income, and comparable earnings are not defined
under Canadian GAAP. Refer to the non-GAAP financial measures section
beginning on page 16 of the MD&A.
The complete first quarter report for 2008, including
Management's Discussion and Analysis and unaudited financial
statements, is available on the Investors section of our website:
www.transalta.com.
TransAlta will hold a conference call and webcast at 9 a.m.
Mountain (11 a.m. Eastern) today to discuss first quarter 2008
results. The call will begin with a short address by Steve Snyder,
President and CEO and Brian Burden, Executive Vice-President and
CFO, followed by a question and answer period for investment
analysts, investors, and other interested parties. A question and
answer period for the media will immediately follow.
Please contact the conference operator five minutes prior to the
call, noting "TransAlta Corporation" as the company and "Jennifer
Pierce" as moderator.
Dial-in numbers:
For local Calgary participants - (403)-232-6311
For local Toronto participants - (416)-883-0139
Toll-free North American participants - 1-888-458-1598
Participant pass code - 26326#
A link to the live webcast will be available via TransAlta's
website, www.transalta.com, under Web Casts in the Investor
Relations section. If you are unable to participate in the call,
the instant replay is accessible at 1-877-653-0545 with TransAlta
pass code 616429#. A transcript of the broadcast will be posted on
TransAlta's website once it becomes available.
Note: If using a hands-free phone, lift the handset and press
one to ask a question.
TransAlta is a power generation and wholesale marketing company
focused on creating long-term shareholder value. We maintain a
low-risk profile by operating a highly contracted portfolio of
assets in Canada, the United States, Mexico and Australia. Our
focus is to efficiently operate our coal-fired, gas-fired, hydro
and renewable facilities in order to provide our customers with a
reliable, low-cost source of power. For nearly 100 years, we've
been a responsible operator and a proud contributor to the
communities where we work and live.
This news release may contain forward-looking statements,
including statements regarding the business and anticipated
financial performance of TransAlta Corporation. These statements
are based on TransAlta Corporation's belief and assumptions based
on information available at the time the assumption was made. These
statements are subject to a number of risks and uncertainties that
may cause actual results to differ materially from those
contemplated by the forward-looking statements. Some of the factors
that could cause such differences include legislative or regulatory
developments, competition, global capital markets activity, changes
in prevailing interest rates, currency exchange rates, inflation
levels and general economic conditions in geographic areas where
TransAlta Corporation operates.
Note: All financial figures are in Canadian dollars unless noted
otherwise.
Contacts: TransAlta Corporation - Media inquiries Michael
Lawrence Senior Advisor, Media Relations Phone: (403) 267-7330
Email: michael_lawrence@transalta.com TransAlta Corporation -
Investor inquiries Jennifer Pierce Director, Investor Relations
Phone: (403) 267-7622 or 1-800-387-3598 in Canada and U.S. Email:
investor_relations@transalta.com TransAlta Corporation - Investor
inquiries Jess Nieukerk Senior Analyst, Investor Relations Phone:
(403) 267-3607 Email: investor_relations@transalta.com Website:
www.transalta.com
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