TransAlta Releases 2022 Financial Outlook: $1.065 – $1.185 Billion EBITDA

TransAlta Corporation (TSX: TA) released this morning its financial outlook for 2022 which is said to highlight the “continuing strong cash flow expectations.” The report is headlined by an estimated comparable EBITDA in 2022 to land between $1.065-$1.185 billion, lower than its 2021 outlook of $1.2-$1.3 billion.

The energy firm outlined a number of factors that may affect its EBITDA in 2022, including strong merchant pricing levels in Alberta and the Pacific Northwest, outages of Kent Hills 1 and 2, and adjustments on Energy Marketing performance expectations coming from its exceptional 2021 yield.

The company also expects free cash flow next year to be $455-$555 million, excluding the rehabilitation expenditures for the Kent Hill farms. The midpoint of the range is lower than its 2021 outlook of $500-$560 million, largely due to lower Alberta power pricing, normalized Energy Marketing performance, and an increase in mine reclamation expenses.

Sustaining capital expenditures for next year is estimated to be $150-$170 million, also 25% lower from its 2021 outlook. The company said the decrease is driven by fewer planned maintenance outages at the thermal fleet in Alberta.

The expected rehabilitation expenses for the Kent Hill farms have been separated from the sustaining capital outlook due to its due “extraordinary and rare nature.” The firm expects to incur an additional $40-$60 million in 2022 for the rehabilitation.

The company is set to continue its execution of the Clean Electricity Growth Plan for 2022-2025, with plans for an additional 400-500MW of clean energy projects across Canada, the United States, and Australia. These projects are expected to deliver around $50-$70 million incremental EBITDA.

TransAlta last traded at $12.91 on the TSX.

Information for this briefing was found via Sedar and the companies mentioned. Not a recommendation to buy or sell any securities. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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