CALGARY, Jan. 16, 2020 /PRNewswire/ - TransAlta
Corporation ("TransAlta" or the "Company") (TSX: TA) (NYSE: TAC)
announced today its financial outlook and environmental, social and
governance ("ESG") targets for 2020, highlighted by the
addition of recently commissioned projects and productivity
improvements, which are expected to drive strong comparable EBITDA
and free cash flow ("FCF") performance in 2020. The Company also
announced that the Board of Directors (the "Board") determined that
following the retirement of Ambassador Gordon D. Giffin at the upcoming annual
shareholder meeting, John P.
Dielwart will be appointed Chair of the Board, pending his
re-election to the Board. Lastly, TransAlta declared an increase in
the annualized dividend to $0.17 per
common share, representing a 6.25 per cent increase.
2020 Outlook
Objectives for 2020 include:
- Achieving free cash flow in the range of $325 million to $375
million;
- Delivering a full year of cash flow from Big Level and
Antrim, which reached commercial
operation in December;
- Significantly progressing the construction of the SemCAMS
cogeneration project and Windrise wind facilities for commercial
operation in 2021;
- Completing the Sundance Unit 6 gas conversion in 2020;
- Advancing the Sundance Unit 5 re-powering project for
commercial operation in 2023;
- Preparing Keephills Units 2 and 3 for gas conversions in
2021;
- Repaying the $400 million bond
maturing in November 2020;
- Continuing the share buyback program in an amount up to
$80 million in 2020;
- Achieving commercial operation for the Windcharger battery
project in 2020; and
- Progressing on our ESG targets.
"Confidence in our strategy and our transformation has allowed
the Board to begin the process of restoring a growing dividend at
TransAlta," commented Ambassador Giffin, Chair of the
Board.
ESG Targets
TransAlta has a long history of adopting
leading sustainability practices, including 25 years of ESG
reporting and voluntarily integrating its sustainability report
into its annual report since 2015. TransAlta established its
first ESG goals in 2014 and is proud to announce its 2020 and
longer-term ESG goals, which are aligned with the UN Sustainable
Development Goals.
"We are in the midst of a transformation that will see TransAlta
become a leading Canadian clean electricity company. We have
already reduced our greenhouse gas emissions by approximately 36
per cent over 2015, we direct less than one per cent of our waste
to landfills, and we have industry leading representation of women
in leadership positions and on our Board", commented Dawn Farrell, President and Chief Executive
Officer of the Company. The key components of the Company's
approved 2020 ESG targets include:
- A continued focus on safe operations and environmentally
sustainable practices, including by minimizing environmental
incidents and undertaking significant reclamation work;
- By 2030, achieving a 95% reduction of SO2 emissions and a 50%
reduction of NOx emissions over 2005 levels from TransAlta's coal
facilities, and a Company-wide reduction of greenhouse gases
emissions of 60% below 2015 levels;
- Undertaking initiatives that will enhance the environmental
performance of the Company, including converting coal facilities to
gas and developing new renewable projects that support customer
sustainability goals to achieve both long-term power price
affordability and carbon reductions;
- Supporting equal access to all levels of education for youth
and Indigenous peoples through financial assistance and employment
opportunities;
- Enhancing our commitment to workplace diversity and adopting a
target of 50 per cent female membership on the Board by 2030 and
achieving gender diversity of at least 40 per cent of female
employment for all employees by 2030; and
- Maintaining our commitment to leading ESG disclosure.
The full details of the approved ESG targets are now available
at www.transalta.com/sustainability. More information in
regard to these ESG targets and the Company's ESG performance will
be included in the Company's integrated annual report for the
year-ended December 31, 2019.
Chair of the Board
TransAlta announced today
that the Board has determined to appoint John P. Dielwart as
Chair of the Board, upon his re-election as an independent director
at TransAlta's next annual shareholder meeting and immediately
following Ambassador Giffin's retirement from the Board. As
previously announced, Ambassador Giffin is retiring from the Board
in 2020 after serving as Chair since 2011.
"John has a distinguished reputation as a strategic business
leader who has demonstrated an ability to enhance shareholder value
in public companies, which makes him the ideal Chair," said
Ambassador Giffin. "The Board conducted a thorough and deliberative
succession process leading us to unanimously
endorse John as our next Chair. It has been a
privilege serving alongside such a dedicated Board and executive
team. I wish everyone at TransAlta all the best and look
forward to watching the Company continue to evolve its unique
culture and execute on strategic initiatives that will deliver
strong shareholder returns for years to
come."
Dawn Farrell commented, "It has
been my pleasure to have worked closely with Gordon over the past
number of years. His insight, judgment and dedication to the
development of our strategy will be greatly missed by
management. On behalf of all of TransAlta, I would like to
thank him for his leadership and dedication."
Mr. Dielwart has served as independent director on the Board
since 2014, and currently serves as the Chair of the Governance,
Safety and Sustainability Committee. He is also on the
Investment Performance Committee of the Board and has previously
served on the Audit, Finance and Risk Committee. Mr. Dielwart
is a founder and Director of ARC Resources Ltd. from 1996 to
present and served as Chief Executive Officer of ARC Resources Ltd.
from 2001 to 2013. Mr. Dielwart earned a Bachelor of Science
(Distinction) in Civil Engineering from the University of Calgary, is a member of the
Association of Professional Engineers and Geoscientists of
Alberta (APEGA) and a
Past-Chairman of the Board of Governors of the Canadian Association
of Petroleum Producers (CAPP). Mr. Dielwart is also a
director and former Co-Chair of the Calgary and Area Child Advocacy Centre.
In 2015, Mr. Dielwart was inducted into the Calgary Business
Hall of Fame.
"I am honoured to have the confidence of the Board as we
continue our transformation into a leading clean electricity
company," said Mr. Dielwart. "I offer Gordon thanks for
expertly guiding us through a period of unprecedented regulatory
change and doing so in a manner that established a clear path
towards growth and clean electricity. I am also confident in
our executive team's ability to execute on our strategy in order to
realize continued success."
Financial Outlook and Assumptions
The following table
provides additional details pertaining to our 2020 outlook:
Measure
|
Target
|
Comparable
EBITDA(1)
|
$925 million to
$1,000 million
|
FCF (1)
|
$325 million to $375
million
|
Range of key power price assumptions:
Market
|
Power Prices
($/MWh)
|
Alberta
Spot
|
$53 to $63
|
Mid-C Spot
(US$)
|
$25 to $35
|
Other assumptions relevant to 2020 financial outlook:
Sustaining
Capital(2)
|
$170 million to $200
million
|
(1)
|
These items are not
defined under IFRS. Presenting these items provides management and
investors with the ability to evaluate earnings trends more readily
in comparison with prior periods' results. Refer to the Free Cash
Flow, Discussion of Segmented Comparable Results, and Earnings and
Other Measures on a Comparable Basis sections of TransAlta's 2019
third quarter management discussion and analysis for additional
information.
|
(2)
|
Excludes payments
associated with finance leases.
|
Dividend Declaration
The Board today declared a
quarterly dividend of $0.0425 per
common share payable on April 1, 2020
to shareholders of record at the close of business on March 2, 2020, which represents a 6.25 per cent
increase in our dividend level.
"We are committed to returning capital to shareholders,
including through our normal course issuer bid and our dividend.
The dividend increase demonstrates our confidence in our strategy
and our commitment to the recently announced dividend policy of
returning between 10% to 15% of deconsolidated funds from
operations to shareholder", remarked Dawn
Farrell.
The Board also declared the following quarterly dividend on its
Cumulative Redeemable Rate Reset First Preferred Shares for the
period starting from and including December 31, 2019 up
to but excluding March 31, 2020:
Preferred
Shares
|
TSX Stock
Symbol
|
Dividend
Rate
|
Dividend
Per Share
|
Record
Date
|
Payment
Date
|
Series A
|
TA.PR.D
|
2.709%
|
$0.16931
|
March 2,
2020
|
March 31,
2020
|
Series
B*
|
TA.PR.E
|
3.682%
|
$0.22949
|
March 2,
2020
|
March 31,
2020
|
Series C
|
TA.PR.F
|
4.027%
|
$0.25169
|
March 2,
2020
|
March 31,
2020
|
Series E
|
TA.PR.H
|
5.194%
|
$0.32463
|
March 2,
2020
|
March 31,
2020
|
Series G
|
TA.PR.J
|
4.988%
|
$0.31175
|
March 2,
2020
|
March 31,
2020
|
*Please note the quarterly floating rate on the Series B
Preferred Shares will be reset every quarter.
About TransAlta:
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 and has been recognized by CDP (formerly Climate
Disclosure Project) as an industry leader on Climate Change
Management. TransAlta is proud to have achieved the Silver level
PAR (Progressive Aboriginal Relations) designation by the Canadian
Council for Aboriginal Business.
For more information about TransAlta, visit its web site
at transalta.com.
Forward Looking Statements and Non-GAAP
measures:
This news release contains forward looking
statements within the meaning of applicable securities
laws. The use of any of the words "expect",
"anticipate", "continue", "may", "will", "should", "plans",
"intends" and similar expressions are intended to identify forward
looking information or statements. More particularly, and without
limitation, this news release contains forward looking statements
and information relating to: delivering a full
year of cash flow from Big Level and Antrim; declaring commercial operation for the
Windcharger battery project in 2020; significantly progressing the
construction of the SemCAMS cogeneration project and Windrise wind
facilities for commercial operation in 2021; completing Sundance
Unit 6 gas conversion in 2020; achieving the Sundance Unit 5
re-powering project in 2023; the Keephills Unit 2 and 3 gas
conversion being completed in 2021; repaying the $400 million bond maturing in November 2020; continuing share buyback program
in an amount up to $80 million;
progressing on our ESG Targets to achieve top performance in
safety; expected 2020 financial results, including free cash
flow ("FCF"), Comparable EBITDA, sustaining capital and
productivity capital; the appointment of Mr. Dielwart
as Chair of the Board; and amount of any future dividends that may
be declared by the Board. These forward looking
statements are based on a number of assumptions considered by the
Company to be reasonable as of the date of this news release,
including, but not limited to, the following: the Alberta spot power pricing of $53/MWh to $63/MWh
and Mid-C spot pricing of US$25/MWh
to US$35/MWh; no significant
changes to applicable laws and regulations in the markets in which
the Company operates, and assumptions regarding expected
financial results from projects; and other assumptions noted in
the 2020 financial outlook. The forward looking
statements are subject to a number of risks and uncertainties that
may cause actual performance, events or results to differ
materially from those contemplated by the forward looking
statements, which include: operational risks involving our
facilities; debt obligations, working capital requirements or
future capital requirements being greater than anticipated;
environmental requirements and changes in, or liabilities under,
these requirements; changes in market prices where we operate; our
ability to carry out planned outages and repairs in a cost
effective and timely manner; energy trading risks; legislative or
regulatory developments and their impacts; general economic
conditions in the geographic areas where TransAlta
operates and other risk factors contained in the
Company's Management Proxy Circular dated March 26, 2019 and its Annual Information Form
and Management's Discussion and Analysis for the year ended
December 31, 2018, filed under the
Company's profile with the Canadian securities regulators on
www.sedar.com and the U.S. Securities and Exchange Commission on
www.sec.gov. The purpose of the financial outlooks contained in
this news release are to give the reader information about
management's current expectations and plans and readers are
cautioned that such information may not be appropriate for other
purposes and is given as of the date of this news release. The
Company undertakes no obligation to update or revise any forward
looking information except as required by law. For additional
information on the assumptions made, and the risks and
uncertainties which could cause actual results to differ from those
in the forward looking information, refer to the Company's Annual
Report and Management's Discussion and Analysis filed under the
Company's profile on SEDAR at www.sedar.com and with the U.S.
Securities and Exchange Commission at www.sec.gov.
The Company evaluates its performance and the performance of
its business segments using a variety of measures. Certain of the
financial measures discussed in this press release, include
Comparable EBITDA and FCF, which are not defined under
International Financial Reporting Standards (IFRS) and, therefore,
should not be considered in isolation or as an alternative to IFRS
measures when assessing the financial performance or liquidity of
the Company. These non-IFRS measures have no standardized meaning
under IFRS, may not be comparable to similar measures presented by
other issuers and should not be considered in isolation or as a
substitute for measures prepared in accordance with IFRS. Non-IFRS
measures are presented to provide management and investors with a
proxy for the amount of cash generated from operating and trading
activities. Please refer to the Company's MD&A, which is
available on the Company's website or under the Company's profile
on www.sedar.com for further discussion of these items, including,
where applicable, reconciliations to measures calculated in
accordance with IFRS.
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SOURCE TransAlta Corporation