Capital Power reports first quarter results and appoints Avik Dey as President and Chief Executive Officer
Press Release
May 01, 2023
EDMONTON, Alberta – Capital Power Corporation (TSX: CPX) today released financial results for the quarter ended March 31, 2023.
Financial highlights
- Generated net cash flows from operating activities of $349 million and adjusted funds from operations (AFFO) of $210 million
- Generated net income of $285 million and adjusted EBITDA of $401 million
- Full-year AFFO and adjusted EBITDA trending to the upper end of annual guidance ranges for 2023
Strategic highlights
- Appointment of Avik Dey as President and Chief Executive Officer
- Executed a 6-year contract extension for Goreway with Ontario IESO
- Positive general developments for Genesee CCS project announced in the Federal Budget 2023 notably reaffirmation of the role and mandate for the Canada Growth Fund to support de-risking of large scale decarbonization
- Announced a 23-year clean electricity supply agreement for Halkirk 2 Wind
“Financial results were strong for the first quarter despite unseasonably warm temperatures,” said Brian Vaasjo, President and CEO of Capital Power. “This included warm temperatures in Alberta for most of the quarter that resulted in an average power price of $142 per megawatt hour which was well below our expectations of $208 per megawatt hour. Our financial forecast and outlook for Alberta power prices and fleetwide performance continues to be positive for the remainder of the year. We expect financial results to be trending to the upper end of the adjusted EBITDA and AFFO guidance ranges of $1,455 million to $1,515 million and $805 million to $865 million, respectively.”
“The Ontario IESO capacity procurement confirms our natural gas strategy and is a good investment opportunity for Capital Power,” stated Mr. Vaasjo. “We were awarded a 6-year IESO contract extension associated with our 40 megawatt efficiency upgrade bid for Goreway, which applies to the new combined contracted capacity of 880 megawatts and extends the current contract from 2029 to 2035. We continue discussions with the IESO on a similar contract award for York Energy Centre and look forward to the results on our competitive bids relating to a gas turbine expansion at East Windsor and battery projects at Goreway and York Energy.”
“On behalf of all of Capital Power, I would like to welcome Avik Dey to the Company. Avik will be a tremendous catalyst for the team and as he noted in the April 19th press release, he is looking forward to accelerating the company’s existing strategic plan. I would also like to congratulate Kate Chisholm, Senior Vice President and Chief Strategy and Sustainability Officer on her retirement. Kate has been an integral part of the executive team with outstanding service and valuable contributions since the inception of Capital Power. We wish Kate the very best in retirement,” added Mr. Vaasjo.
“Capital Power has been very fortunate to have Brian as our inaugural President & CEO,” said Board Chair, Jill Gardiner. “On behalf of the Board of Directors and the Company, I want to thank him for his tremendous leadership and bringing Capital Power to the strong position it is in today.”
Operational and Financial Highlights1
| (unaudited, millions of dollars except per share and operational amounts) | Three months ended March 31 | |
| 2023 | 2022 | |
| Electricity generation (Gigawatt hours) | 7,417 | 6,893 |
| Generation facility availability | 94% | 95% |
| Revenues and other income | $1,267 | $501 |
| Adjusted EBITDA 2 | $401 | $348 |
| Net income 3 | $285 | $119 |
| Net income attributable to shareholders of the Company | $286 | $122 |
| Basic earnings per share | $2.39 | $0.96 |
| Diluted earnings per share | $2.38 | $0.96 |
| Net cash flows from operating activities | $349 | $415 |
| Adjusted funds from operations 2 | $210 | $200 |
| Adjusted funds from operations per share 2 | $1.80 | $1.72 |
| Purchase of property, plant and equipment and other assets, net | $86 | $132 |
| Dividends per common share, declared | $0.5800 | $0.5475 |
- The operational and financial highlights in this press release should be read in conjunction with the Management’s Discussion and Analysis and the unaudited condensed interim financial statements for the three months ended March 31, 2023.
- 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 unrealized changes in fair value of commodity derivatives and emissions credits (adjusted EBITDA) and adjusted funds from operations (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, 2023 and 2022 of $141 million and $142 million, respectively. Forecasted depreciation and amortization for the remainder of 2023 is $137 million per quarter.
Significant Events
Approval of normal course issuer bid
During the first quarter of 2023, the Toronto Stock Exchange approved Capital Power’s normal course issuer bid to purchase and cancel up to 5.8 million of its outstanding common shares during the one-year period from March 3, 2023 to March 2, 2024.
Executed 23-year clean electricity supply agreement for Halkirk 2 Wind
On February 3, 2023, we announced a 23-year clean electricity supply agreement with Public Services and Procurement Canada. The Agreement will provide approximately 250,000 MWh of clean electricity per year initially through Canada-sourced renewable energy credits until Capital Power’s proposed Alberta-based Halkirk 2 Wind project is completed, which is expected to be operational by January 1, 2025 (subject to regulatory approval). The 151 MW Halkirk 2 Wind project will provide renewable energy for the remainder of the term – representing approximately 49% of the facility’s output. As part of the transaction, Capital Power committed to securing an equity partnership with local Indigenous communities related to the proposed project.
Subsequent Events
Goreway awarded 6-year contract extension by Ontario IESO
On April 25, 2023, Capital Power and the Ontario Independent Electric System Operator (IESO) executed a 6-year contract extension for Goreway associated with its successful efficiency upgrade bid of approximately 40 megawatts (MW) in IESO’s competitive capacity procurement process. The uprate will increase Goreway’s current combined contracted capacity from 840 MW to 880 MW. The IESO contract extension applies to the new combined contracted capacity of 880 MW and extends the current Clean Energy Supply Contract from 2029 to 2035. The upgrade is expected to be completed in 2025. Goreway is a natural gas-fired combined cycle facility located in Brampton, Ontario.
Avik Dey appointed of as President and Chief Executive Officer, Brian Vaasjo to Retire
On April 19, 2023, the Company’s Board of Directors announced that it unanimously selected Avik Dey to be its next President and Chief Executive Officer and become a member of the Board of Directors, effective May 8, 2023. The appointment follows the planned retirement of Brian Vaasjo who will support Mr. Dey in an advisory role for six months to ensure a seamless transition.
Retirement announced for Kate Chisholm, Senior Vice President and Chief Strategy and Sustainability Officer
On April 13, 2023, the Company announced internally that Kate Chisholm, our Senior Vice President and Chief Strategy and Sustainability Officer has advised of her intention to retire effective July 4, 2023. Kate has been an integral part of the Executive Team with outstanding service and valuable contributions since the inception of Capital Power. Announcement for Kate’s replacement will occur in due course.
Analyst conference call and webcast
Capital Power will be hosting a conference call and live webcast with analysts on May 1, 2023 at 9:00 am (MT) to discuss the first quarter financial results. The conference call dial-in number is:
(800) 319-4610 (toll-free from Canada and USA)
Interested parties may also access the live webcast on the Company’s website at www.capitalpower.com with an archive of the webcast available following the conclusion of the analyst conference call.
Supporting Document
Contact
Media Relations
Katherine Perron
Media Relations & Communications Manager
Email: [email protected]
Phone: 1-780-392-5335
After-hours contact: 1-780-392-5234
Investor Relations
Randy Mah
Director, Investor Relations
Email: [email protected]
Phone: 780-392-5305
Toll Free: 1-866-896-4636
IBF4
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