Capital Power announces strong first quarter 2025 results
Press Release
April 30, 2025
EDMONTON, Alberta – Capital Power Corporation (TSX: CPX) today released financial results for the quarter ended March 31, 2025.
Highlights
- Entered into a definitive agreement to acquire two natural gas-fired power generation facilities located in the PJM1 market for ~$3.0 billion (US $2.2 billion), adding ~2.2 GW of capacity to our U.S. flexible generation2 portfolio
- Continued progressing five Ontario growth projects to add ~350 MW of long-term contracted capacity
- Commenced construction of the Hornet Solar project in North Carolina
- Generated adjusted funds from operations (AFFO) of $218 million and net cash flows from operating activities of $210 million
- Generated adjusted EBITDA of $367 million and a net income of $150 million
- Pennsylvania-New Jersey-Maryland Interconnection.
- Flexible generation is defined as natural gas generation assets and energy storage business.
“By adding the Hummel and Rolling Hills generating assets and expanding into PJM, we are driving long-term cash flow per share growth, superior diversification of our portfolio and enhanced our positioning for the future. Our existing assets continue to see strong generation driven by long-term fundamentals that underpin our strategy. This supports our thesis that natural gas-fired assets are critical to reliability, provide opportunity for growth and creation of shareholder value in various market conditions,” said Avik Dey, President and CEO of Capital Power.
“Our financial results and portfolio growth demonstrate the prudence of our strategy. We continue to grow our portfolio with a focus on geographic diversification, and pro-active risk management and maintenance of our investment grade credit rating. These efforts stabilize our cash flows through market cycles and, along with the dividend, continue to offer a compelling total return for our shareholders,” stated Sandra Haskins, SVP Finance and CFO of Capital Power.
Operational and Financial Highlights1
| ($ millions, except per share amounts) | Three months ended March 31 |
|
| 2025 | 2024 | |
| ($ millions, except per share amounts) |
Three months ended
March 31 |
|
| 2025 | 2024 | |
| Electricity generation (Gigawatt hours) | 9,555 | 8,809 |
| Generation facility availability | 90% | 94% |
| Revenues and other income | $988 | $1,119 |
| Adjusted EBITDA 2 | $367 | $279 |
| Net income 3 | $150 | $205 |
| Net income attributable to shareholders of the Company | $151 | $205 |
| Basic earnings per share | $1.03 | $1.58 |
| Diluted earnings per share | $1.03 | $1.57 |
| Net cash flows from operating activities | $210 | $334 |
| AFFO 2 | $218 | $142 |
| AFFO per share 2 | $1.57 | $1.15 |
| Purchase of property, plant and equipment and other assets, net | $288 | $218 |
| Dividends per common share, declared | $0.6519 | $0.6150 |
- The operational and financial highlights in this press release should be read in conjunction with the Management’s Discussion and Analysis and the audited condensed interim financial statements for the three months ended March 31, 2025.
- Earnings before net finance expense, income tax expense, depreciation and amortization, impairments, foreign exchange gains or losses, finance expense and depreciation expense from joint venture interests, gains or losses on disposals and other transactions and unrealized changes in fair value of commodity derivatives and emissions credits and other items that are not reflective of the long-term performance of the Company’s underlying business (adjusted EBITDA) and AFFO are used as non-GAAP financial measures by the Company. The Company also uses AFFO per share which is a non-GAAP ratio. These measures and ratios 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 and Ratios.
- Includes depreciation and amortization for the three months ended March 31, 2025 and 2024 of $126 million and $122 million, respectively. Forecasted depreciation and amortization for the remainder of 2025 is $129 million per quarter.
Subsequent Events
Acquisition of Hummel Station Intermediate Holdings III, LLC and Rolling Hills Generating Holdings, LLC
Consistent with the Company’s strategy to acquire flexible generation assets in the U.S, on April 14, 2025, Capital Power entered into a definitive agreement with Hummel Station Intermediate Holdings III, LLC and Rolling Hills Generating Holdings, LLC, each a subsidiary of LS Power Equity Advisors, LLC, to acquire 100% of the equity interests in:
- Hummel Station, LLC, which owns the 1,124 MW Hummel Station, a combined-cycle natural gas facility in Shamokin Dam, Pennsylvania (Hummel Acquisition), and
- Rolling Hills Generating, L.L.C., which owns the 1,023 MW Rolling Hills plant, a combustion turbine natural gas facility in Wilkesville, Ohio (Rolling Hills Acquisition and together with the Hummel Acquisition, the Acquisition).
The total purchase price of the Acquisition is expected to be approximately ~$3.0 billion (US $2.2 billion), subject to customary post-closing adjustments, including working capital and estimated transaction expenses. The Acquisition is expected to close in the third quarter of 2025, subject to regulatory approvals and other customary closing conditions.
Capital Power will finance the Acquisition using the net proceeds from its concurrent common share offering, outlined in further detail below, and a combination of some or all of the following (i) cash on hand from a prior equity issuance and asset divestitures; (ii) longer term debt financing; (iii) other immediately available funds, including potential draws under Capital Power’s existing credit facilities; and (iv) funding provided under Acquisition Term Loan Facilities, described in further detail below. This funding plan maintains Capital Power’s investment grade credit rating and preserves its strong balance sheet and financial flexibility.
Common share offering
On April 22, 2025, the Company completed a public offering of 11,902,500 common shares, which included 1,552,500 common shares issued pursuant to the full exercise of the over-allotment option, at $43.45 per common share (Offering Price) for total gross proceeds of approximately $517 million. The Company also issued 3,455,000 common shares at the Offering Price on a private placement basis, for gross proceeds of $150 million, subject to a statutory hold period of 4 months and one day from the closing date of the private placement.
Acquisition Term Loan Facilities
For purposes of financing the Acquisition, the Company entered into an agreement with a lender on April 14, 2025, whereby the lender has agreed to provide, on a fully underwritten basis, senior unsecured term loan facilities in the aggregate principal amount of up to $2 billion (Acquisition Term Loan Facilities). The Acquisition Term Loan Facilities are comprised of two tranches of $1 billion non-extendible, non-revolving, syndicated term credit facilities, with the first tranche maturing in 2028 and the second tranche maturing in 2027.
Analyst conference call and webcast
Capital Power will be hosting a conference call and live webcast with analysts on April 30, 2025 at 9:00 am (MT) to discuss the first quarter financial results.
Conference call details will be sent directly to analysts.
An archive of the webcast will be available on our website following the conclusion of the analyst conference call.
Non-GAAP Financial Measures and Ratios
Capital Power uses (i) earnings before net finance expense, income tax expense, depreciation and amortization, impairments, foreign exchange gains or losses, finance expense and depreciation expense from our joint venture interests, gains or losses on disposals and other transactions and unrealized changes in fair value of commodity derivatives and emission credits (adjusted EBITDA), and (ii) AFFO as specified financial measures. Adjusted EBITDA and AFFO are both non-GAAP financial measures.
Capital Power also uses AFFO per share as a specified performance measure. This measure is a non-GAAP ratio determined by applying AFFO to the weighted average number of common shares used in the calculation of basic and diluted earnings per share.
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 Capital Power, 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 our results of operations from management’s perspective.
Contact
Media Relations
Katherine Perron
(780) 392-5335
kperron@capitalpower.com
Investor Relations
Roy Arthur
(403) 736-3315
investor@capitalpower.com
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