- Electrical utilities company TransAlta Corporation (TSX:TA) has released a steady first quarter report for 2020
- First quarter EBITDA was C$220 million, only marginally lower than the $221 the company reported in 2019’s first quarter
- TransAlta did see a drop in its Canadian coal and Energy Marketing sectors, when compared to 2019’s same quarter
- However, this was offset by stronger performances in its US Coal and Wind and Solar sectors, which increased by $43 million and $5 million, respectively
- TransAlta Corporation (TA) is up 1.29 per cent, with shares trading for $8.28 and a market cap of $2.32 billion
Electrical utilities company TransAlta Corporation (TSX:TA) has released a steady first quarter report, despite a challenging few months for the industry.
Earlier this year, the energy industry was hit significantly by an unexpected drop in oil price benchmarks. More recently, the ongoing COVID-19 pandemic has further depressed the market, driving the oil price down further and reducing demand.
However, TransAlta’s energy generation facilities operate mainly on coal, natural gas and renewable power, thus insulating the company from the pricing challenges facing the industry.
First quarter EBITDA was C$220 million, only marginally lower than the $221 million the company reported in 2019’s first quarter.
TransAlta did see a drop in some segments of its business. Specifically, the company saw a $19 million drop in its Canadian coal earnings due to lower merchant output. EBITDA from TransAlta’s Energy Marketing sector also decreased by $6 million to $13 million.
However, these reductions were offset by the company’s US Coal and Wind and Solar sectors, which increased by $43 million and $5 million, respectively.
Dawn Farrell, President and CEO of TransAlta, is pleased with the steady results given the challenges facing the industry.
“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,” she said.
TransAlta Corporation (TA) is up 1.29 per cent, with shares trading for $8.28 at 10:20am EDT.
