Capital Power (CPX) Q2 2024 earnings summary

Executive summary

• Delivered 9 TWh of power in Q2 2024, with new U.S. asset acquisitions enhancing fleet diversification and performance, and asset maintenance progressing as planned.

• Achieved 100% off-coal status at Genesee Generating Station five years ahead of mandate, with Units 1 and 2 reaching simple cycle commercial operation.

• U.S. business now comprises over 50% of total capacity and contributed 43% of Q2 adjusted EBITDA, up from 26% in Q2 2023, driven by new acquisitions.

• Entered 25-year PPAs for North Carolina solar projects with Duke Energy, expanding the U.S. renewables portfolio.

• Discontinued the $2.4 billion Genesee CCS project due to economic infeasibility, incurring an $18 million pre-tax cost.

Financial highlights

• Q2 2024 adjusted EBITDA was CAD 323 million, down CAD 4 million year-over-year, mainly due to lower Alberta generation and prices.

• AFFO for Q2 was CAD 178 million, up CAD 27 million from last year, driven by lower income tax and higher JV contributions.

• Q2 2024 revenues and other income totaled $774 million, down from $881 million in Q2 2023, mainly due to lower Alberta power prices and generation.

• Dividend increased for the eleventh consecutive year, with a CAGR of 7% since 2013 and a 6% increase to $2.61 per share effective Q3 2024.

• Net cash flows from operating activities were $136 million, up from $11 million in Q2 2023.

Outlook and guidance

• 2024 sustaining CapEx on track at CAD 180–200 million; half of scheduled outage days completed.

• Full-year 2024 AFFO expected at midpoint of CAD 770–870 million guidance; adjusted EBITDA guidance revised to CAD 1,310–1,410 million due to lower Alberta prices and Genesee outages.

• Dividend growth guidance of 6% through 2025, with a long-term target of 2–4% post-2025.

• Facility availability averaged 91–92% in H1, just below the 93% target.