Transalta Corp. (TAC) Tops Q1 EPS by 10c, Revenues Beat

Transalta Corp. (NYSE: TAC) reported Q1 EPS of $0.10, $0.10 better than the analyst estimate of $0.00. Revenue for the quarter came in at $606 million versus the consensus estimate of $506.52 million.

"First quarter results were strong amidst an unprecedented pandemic in which the company reacted quickly and efficiently to ensure the essential power demands of our communities and customers were uninterrupted and everyone remained healthy," said Dawn Farrell, President and Chief Executive Officer. "Our results demonstrate the strength of our operations, our contractedness and our portfolio diversification, giving us confidence to reaffirm our free cash flow outlook for the year. Although the longer-term effect of the pandemic and global crude oil prices on power prices is uncertain, our cash flow generation is highly diversified across regions outside of Alberta with a majority contracted or hedged. Based on our forecast, we are on-track to be at the mid-point of our free cash flow outlook range."

"Thank you to all employees, contractors and their families whose exceptional efforts ensure the continued strong operational performance of the company," added Mrs. Farrell.

COVID-19 ResponseThe Company formally implemented its business continuity plan on March 9, 2020, which is focused on ensuring that: (i) employees that can work remotely do so; and (ii) employees operating and maintaining our facilities, and who are not able to work remotely, are able to work safely and in a manner that ensures they remain healthy. This plan includes health screening, enhanced cleaning arrangements, travel bans, revised work schedules, contingent work teams and the reorganization of processes and procedures to limit contact with other employees and contractors on-site.

Currently, all of our facilities remain fully operational and capable of meeting our customers' needs. We have modified our operating procedures and implemented restrictions to non-essential access to our facilities to support continued operations through the pandemic. The Corporation continues to work and serve all of our customers and counterparties under the terms of their contracts. We have not experienced interruptions to service requirements. Electricity and steam supply continue to remain a critical service requirement to all of our customers and have been deemed an essential service in our jurisdictions.

Our growth construction programs are underway and progressing forward under our business continuity health measures. We are on-track to complete the conversion of Sundance Unit 6 during the second half of 2020. The Company continues to advance conversion of its Keephills Unit 2 and Unit 3 in 2021, but these projects could be delayed by two to three months due to delays in procuring certain equipment as a result of COVID-19.

The Company continues to maintain a strong financial position in part due to our long-term contracts and hedged positions. The Company is scheduled to receive $400 million from the second tranche of financing from the Brookfield investment in the fourth quarter of 2020 and has access to additional capital through potential project financing of existing assets that are currently unencumbered. We currently have access to $1.7 billion in liquidity including $338 million in cash and have sufficient liquidity to meet the upcoming debt maturity due November 2020 and growth construction requirements. The next major debt repayment is scheduled for November 2022.

For earnings history and earnings-related data on Transalta Corp. (TAC) click here.

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