TransAlta also reported comparable earnings for the first quarter of 2009 of CAD36 million (CAD0.18 per share) versus CAD99 million (CAD0.50 per share) for the same period in 2008.
Comparable earnings were lower in the quarter due to around 1,000 gigawatt hours (GWh) of lower production resulting primarily from planned major maintenance activities and the unplanned derate of TransAlta’s Sundance 4 unit. Net earnings for the quarter were higher primarily due to the after-tax equity loss recorded in the first quarter of 2008 of CAD65 million related to the write-down of TransAlta’s Mexico business and to lower income taxes relative to the same period last year.
Cash flow from operations for the quarter was CAD83 million compared to CAD237 million a year ago. The decline in cash flow from operations was primarily related to the receipt of a CAD116 million extra PPA payment in the first quarter of 2008 and lower earnings in the quarter due to an increase in planned and unplanned outages. For the full year, TransAlta expects to achieve CAD750 to CAD850 million in cash flow from operations.
TransAlta’s balance sheet, liquidity and financial ratios remain strong. The company has CAD2.2 billion of committed credit facilities and as of March 31, 2009, CAD1.5 billion remained available.
Fleet availability for the first quarter decreased to 86.4% compared to 91.8% in the first quarter of 2008 due to higher planned and unplanned outages. For the year, TransAlta expects total fleet availability to be in the range of 88 to 89%. In the first half of 2009, TransAlta now expects availability for Alberta Thermal of 78 to 80%, and 88 to 90% in the second half.
TransAlta’s accelerated major maintenance plan for the year includes more than 3,000 GWh of planned major maintenance outages. In the first quarter, over 700 GWh were taken primarily related to work on the Alberta Thermal units. In the second quarter, around 1,800 GWh is scheduled to complete boiler tube maintenance at Alberta Thermal and finalize the transition to Power River Basin coal at Centralia Thermal. As a result, the third quarter is currently scheduled to have only 500 GWh of planned down time including implementation of the efficiency uprate at Sundance 5 and productivity investments on Ontario co-generation plants. No major maintenance activities are planned in the fourth quarter.
“With around 95% of our portfolio contracted for the year, we expect to achieve single-digit comparable earnings growth in 2009 despite deteriorating market drivers for electricity,” said Steve Snyder, TransAlta’s President and CEO. “We are taking advantage of these conditions to accelerate our major maintenance plans into the first half of the year. We are already seeing positive results from these plans on our Alberta Thermal units and expect availability to return to higher historic levels in the second half of the year.”
