TransAlta (TA) Q2 2024 earnings summary

Executive summary

• Delivered strong operational and financial results in Q2 2024, with adjusted EBITDA of $312 million, 55% from renewables, and average fleet availability of 90.8%.

• Major wind projects in Oklahoma and solar facilities in Australia were commissioned, expected to contribute over $100 million in annual EBITDA.

• Returned $89 million to shareholders via buybacks, representing 59% of the 2024 repurchase program.

• Appointed new CFO, Joel Hunter, effective July 1, 2024.

• Actively engaged in regulatory review for the Heartland Generation transaction, with timing and outcome uncertain.

Financial highlights

• Q2 2024 adjusted EBITDA was $312 million, down 19% year-over-year; FCF was $172 million ($0.57/share), down 38% year-over-year.

• Net earnings attributable to common shareholders were $56 million ($0.18/share), compared to $62 million ($0.23/share) in Q2 2023.

• Year-to-date free cash flow was $381 million ($1.25/share), representing 73% of annual guidance midpoint.

• Maintained over $1.7 billion in available liquidity, including $350 million in cash.

• Adjusted net debt to adjusted EBITDA increased to 3.0x from 2.5x at year-end.

Outlook and guidance

• 2024 guidance reaffirmed: Adjusted EBITDA of $1,150–$1,300 million, FCF of $450–$600 million ($1.47–$1.96/share), and annualized dividend of $0.24/share.

• Tracking to the upper end of 2024 adjusted EBITDA and FCF guidance ranges.

• High hedge positions for 2024–2026 at prices above current forward curves, supporting earnings and cash flow stability.

• Up to 42% of 2024 FCF guidance to be returned to shareholders via buybacks and dividends.

• Confident 2025 EBITDA and FCF will be in line with 2024, supported by hedge positions and fleet opportunities.