EDMONTON, Alberta – Capital Power Corporation (Capital Power, or the Company) (TSX: CPX) today released financial results for the third quarter ended September 30, 2015.
Net income attributable to shareholders in the third quarter of 2015 was $49 million and basic earnings per share attributable to common shareholders was $0.44 per share compared with a net loss of $45 million and basic loss per share of $0.62 in the comparable period of 2014. Net cash flows from operating activities were $184 million in the third quarter of 2015 compared with $102 million in the third quarter of 2014.
Normalized earnings attributable to common shareholders in the third quarter of 2015, after adjusting for one-time items and fair value adjustments, were $33 million or $0.33 per share compared with $10 million or $0.12 per share in the third quarter of 2014. Funds from operations were $97 million in the third quarter of 2015, up 17 per cent from $83 million in the third quarter of 2014.
For the nine months ended September 30, 2015, net income attributable to shareholders was $55 million and basic earnings per share attributable to common shareholders was $0.40 per share compared with net income of $7 million and basic loss per share of $0.12 for the nine months ended September 30, 2014. Net cash flows from operating activities were $303 million for the nine months ended September 30, 2015 compared with $284 million for the nine months ended September 30, 2014.
For the nine months ended September 30, 2015, normalized earnings attributable to common shareholders were $70 million, or $0.73 per share, compared with $42 million, or $0.51 per share, in the first nine months of 2014. Funds from operations totaled $275 million compared with $260 million in the comparable nine-month period last year.
“The third quarter was highlighted by a 95 per cent average plant availability and financial results that exceeded management’s expectations,” said Brian Vaasjo, President and CEO of Capital Power. “We continue to see the benefits of strong portfolio optimization activities that captured an average realized Alberta power price of $61 per megawatt hour (MWh) in the third quarter, well above the average spot price of $26 per MWh that reflected excess supply from minimal plant outages and lower market volatility.”
“With $275 million in funds from operations generated in the first nine months of the year and based on our outlook for the balance of the year, we are now increasing our expectation from the low end of our $365 to $415 million funds from operations annual target range to the mid-point of the range,” said Mr. Vaasjo.
|Operational and Financial Highlights 1
|Three months ended September 30||Nine months ended September 30|
|(millions of dollars except per share and operational amounts)||2015||2014||2015||2014|
|Electricity generation (excluding Sundance power purchase arrangement PPA)) (GWh)||3,687||3,220||10,638||9,714|
|Generation plant availability (excluding Sundance PPA) (%)||95%||97%||94%||95%|
|Adjusted EBITDA 2||$148||$91||$340||$282|
|Net income (loss)||$50||$(57)||$52||$2|
|Net income (loss) attributable to shareholders of the Company||$49||$(45)||$55||$7|
|Basic and diluted earnings (loss) per share||$0.44||$(0.62)||$0.40||$(0.12)|
|Normalized earnings attributable to common shareholders 2||$33||$10||$70||$42|
|Normalized earnings per share 2||$0.33||$0.12||$0.73||$0.51|
|Net cash flows from operating activities||$184||$102||$305||$284|
|Funds from operations 2||$97||$83||$275||$260|
|Purchase of property, plant and equipment and other assets||$36||$25||$123||$163|
|Dividends per common share, declared||$0.3650||$0.3400||$1.0450||$0.9700|
1 The operational and financial highlights in this press release should be read in conjunction with Management’s Discussion and Analysis and the unaudited condensed interim consolidated financial statements for the nine months ended September 30, 2015.
2 Earnings before finance expense, income tax expense, depreciation and amortization, impairments, foreign exchange losses, and gains on disposals (adjusted EBITDA), normalized earnings attributable to common shareholders, normalized earnings per share and funds from operations are non-GAAP financial measures and do not have standardized meanings under GAAP and are, therefore, unlikely to be comparable to similar measures used by other enterprises. See Non-GAAP Financial Measures.
The Company appointed Mark Zimmerman to the position of Senior Vice President, Corporate Development and Commercial Services, effective November 2, 2015.
Mr. Zimmerman has more than 25 years of experience in the energy infrastructure and petroleum industries, with leadership roles focusing on finance, valuation, corporate strategy, business development, and mergers and acquisitions. He served as President of TC Pipelines LP from 2007 to 2010, and has worked for TransCanada Pipelines Ltd. from 1997 to 2015, most recently as Vice President Corporate Development & Strategy.
Mr. Zimmerman is a Chartered Accountant, Chartered Business Valuator and a member of the Institute of Corporate Directors. He holds a Bachelor of Commerce (1989) from the University of Alberta.
Analyst Conference Call and Webcast
Capital Power will be hosting a conference call and live webcast with analysts on October 26, 2015 at 11:00 AM (ET) to discuss its third quarter financial results. The conference call dial-in numbers are:
(604) 681-8564 (Vancouver)
(403) 532-5601 (Calgary)
(416) 623-0333 (Toronto)
(514) 687-4017 (Montreal)
(855) 353-9183 (toll-free from Canada and USA)
Participant access code for the call: 21543#
A replay of the conference call will be available following the call at: (855) 201-2300 (toll-free) and entering conference reference number 1186355# followed by participant code 21543#. The replay will be available until January 24, 2016. Interested parties may also access the live webcast at www.capitalpower.com with an archive of the webcast available following the conclusion of the call.
Non-GAAP Financial Measures
The Company uses (i) adjusted EBITDA, (ii) funds from operations, (iii) normalized earnings attributable to common shareholders, and (iv) normalized earnings per share as financial performance measures. These terms are not defined financial measures according to GAAP and do not have standardized meanings prescribed by GAAP, and, therefore, are unlikely to be comparable to similar measures used by other enterprises. These measures should not be considered alternatives to net income, net income attributable to shareholders of the Company, net cash flows from operating activities or other measures of financial performance calculated in accordance with GAAP. Rather, these measures are provided to complement GAAP measures in the analysis of the Company’s results of operations from management’s perspective. Reconciliations of adjusted EBITDA to net income, funds from operations to net cash flows from operating activities and normalized earnings attributable to common shareholders to net income attributable to shareholders of the Company are contained in the Company’s Management’s Discussion and Analysis, prepared as of October 23, 2015, for the nine months ended September 30, 2015 which is available under the Company’s profile on SEDAR at www.SEDAR.com.
Forward-looking information or statements included in this press release are provided to inform the Company’s shareholders and potential investors about management’s assessment of Capital Power’s future plans and operations. This information may not be appropriate for other purposes. The forward-looking information in this press release is generally identified by words such as will, anticipate, believe, plan, intend, target, and expect or similar words that suggest future outcomes.
Material forward-looking information in this press release includes expectations regarding: (i) funds from operations, (ii) consistent growth of dividends, and (iii) the impact of environmental regulations including emissions compliance costs.
These statements are based on certain assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate. The material factors and assumptions used to develop these forward-looking statements relate to: (i) electricity and other energy prices, (ii) performance, (iii) business prospects and opportunities including expected growth and capital projects, (iv) status and impact of policy, legislation and regulation, and (v) effective tax rates.
Whether actual results, performance or achievements will conform to the Company’s expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results and experience to differ materially from the Company’s expectations. Such material risks and uncertainties are: (i) changes in electricity prices in markets in which the Company operates, (ii) changes in energy commodity market prices and use of derivatives, (iii) regulatory and political environments including changes to environmental, financial reporting and tax legislation, (iv) power plant availability and performance including maintenance of equipment, (v) ability to fund current and future capital and working capital needs, (vi) acquisitions and developments including timing and costs of regulatory approvals and construction, (vii) changes in market prices and availability of fuel, and (viii) changes in general economic and competitive conditions. See Risks and Risk Management in the Company’s Management’s Discussion and Analysis, prepared as of February 20, 2015, for further discussion of these and other risks.