TransAlta Announces Outlook and Continuing Strong Cash Flow for 2022
CALGARY, AB, Jan. 18, 2022 /CNW/ - TransAlta Corporation ("TransAlta" or the "Company") (TSX: TA) (NYSE: TAC) announced today its financial outlook for 2022.
"We are pleased to announce that our annual outlook highlights continuing strong cash flow expectations for 2022. Our fleet remains well positioned to capture the ongoing strength we see in the Alberta merchant market. We also remain focused on growth that creates value for our shareholders as we work to deliver on our 2 GW renewables growth target by 2025. In 2021, our team secured 600 MW of new renewables projects demonstrating our competitiveness and capability to deliver our growth strategy across all our geographies," said John Kousinioris, President and Chief Executive Officer of TransAlta.
"2022 marks our transition off coal in Canada. With the completion of all our coal-to-gas conversions, and with our renewables growth plan well underway, we have adopted a more ambitious target of 75 per cent emissions reduction over 2015 levels by 2026. We are also proud to be the first publicly-traded electricity company in Canada to commit to setting a science-based emissions reduction target. We are excited for another great year of execution and ESG performance for TransAlta," added Mr. Kousinioris.
2022 Strategic Priorities
2022 Financial Outlook
The Company expects sustaining capital to be in the range of $150 million to $170 million. The midpoint for the range represents a 25 per cent decrease from the midpoint of the 2021 outlook. This is driven by fewer planned maintenance outages at the thermal fleet in Alberta due to completion of gas conversions that occurred in 2021, partially offset by increased sustaining capital expenditures at Sarnia for a planned major maintenance, as well as increased dam safety and major maintenance across our Hydro fleet. The Kent Hills foundation rehabilitation capital expenditure has been segregated from our sustaining capital range due to the extraordinary and rare nature of this expenditure. The initial estimate range for the rehabilitation at Kent Hills is between $75 million to $100 million with approximately $40 million to $60 million estimated to be incurred in 2022.
FCF is expected to be between $455 million and $555 million and excludes impact of rehabilitation capital expenditures required at Kent Hills. The midpoint of the range represents a 5 per cent decrease from the 2021 outlook midpoint largely driven by lower Alberta power pricing, a return to normal performance from Energy Marketing, and a step-up in mine reclamation expenditures, partially offset by the contribution from new assets and lower expected sustaining capital.
The following table summarizes and provides additional details pertaining to our 2022 outlook:
Range of key power price assumptions:
Alberta spot price sensitivity: a +/- $1/MWh change in spot price is expected to have a +/- $10 million annualized impact on Comparable EBITDA.
Other assumptions relevant to 2022 financial outlook (millions):
Alberta Hedging – assumptions full year 2022:
Segmented Financial Reporting
The new segments to be reported in our year-end financial report are summarized as follows: Hydro, Wind and Solar, Gas, Energy Transition, Energy Marketing, and Corporate.
The full details of the approved ESG targets are now available at www.transalta.com/sustainability. More information in regard to ESG targets and the Company's ESG performance will be included in the Company's integrated annual report for the year-ended December 31, 2021.
About TransAlta Corporation:
TransAlta owns, operates and develops a diverse fleet of electrical power generation assets in Canada, the United States and Australia with a focus on long-term shareholder value. TransAlta provides municipalities, medium and large industries, businesses and utility customers with clean, affordable, energy-efficient and reliable power. Today, TransAlta is one of Canada's largest producers of wind power and Alberta's largest producer of hydroelectric power. For over 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals.
For more information about TransAlta, visit our web site at transalta.com.
Cautionary Statement Regarding Forward-looking Information
Note: All financial figures are in Canadian dollars unless otherwise indicated.
SOURCE TransAlta Corporation
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