Capital Power Corporation · TSX:CPX
Capital Power — Q2 2023 Earnings Presentation
19 slides from Capital Power's earnings presentation, Aug 2, 2023
Slide 1: Q2/23 Analyst Conference Call
Q2/23 Analyst Conference Call Avik Dey, President & CEO Sandra Haskins, SVP Finance & CFO August 2, 2023
Slide 2: Forward-looking information
Forward-looking information Cautionary statement Certain information in this presentation and responses to questions contains forward-looking information. Actual results could differ materially from conclusions, forecasts or projections in the forward-looking information as a result of certain mater
Slide 3: Non-GAAP financial measures and ratios
Non-GAAP financial measures and ratios The Company uses (i) earnings before net finance expense, income tax expense, depreciation and amortization, impairments, foreign exchange gains or losses, finance expense and depreciation expense from its joint venture interests, gains or losses on disposals a
Slide 4: Leading the energy transition to net zero
Leading the energy transition to net zero Delivering on Genesee 1&2 Repowering Project • Improved performance • Reduced emissions • Alternate solution to Battery Energy Storage System (BESS) Continued execution of our proven midlife natural gas strategy • Capacity additions or extensions secured for
Slide 5: Genesee 1&2 Repowering Project
Genesee 1&2 Repowering Project Project delivers long term value Project schedule • Extension of asset useful life and deliver • Revised commissioning timelines due to long-term cash flow growth construction delays • Improved performance and competitiveness Start of Start of SIMPLE CYCLE COMBINED CYC
Slide 6: Genesee 1&2 Repowering Project
Genesee 1&2 Repowering Project ($M) Project cost revised to $1.35B, $2,000 a net increase of $73M since 2022 Investor Day $268 • Received conditional AESO $1,500 $1,350 approval of alternate solution $1,277 Costs Increase ($195) to meet MSSC(1) limit without to Switchyard $85 the need for BESS $1,00
Slide 7: 5 successful Ontario projects adding ~350 MW
5 successful Ontario projects adding ~350 MW Contracts executed for all projects with Ontario IESO; COD targeted in 2025 Expedited Long-Term RFP ($655M cost) Project Contracted Term Capacity York Energy East Windsor Expansion (106 MW) 81 MW summer To 2040 (~15 years) Centre 100 MW winter 228 MW York
Slide 8: U.S. solar growth
U.S. solar growth North Carolina • Maple Leaf Solar – executed 25-year, fixed price renewable PPA with Duke Energy Progress for 100% of output • 73 MWac (92 MWdc) capacity with a cost of $219M and Hornet Solar (75 MW) expected COD in Q4/26 • 3 well-positioned solar projects (160 MW total) being bid
Slide 9: Genesee Carbon Capture Project
Genesee Carbon Capture Project Positive technical assessment complete • Pre-final investment decision (FID) work finalized with positive results including FEED study Commercial and financing progress • Productive discussions with government entities ongoing • Strong support for project to advance Al
Slide 10: Delivering a decade of dividend growth
Delivering a decade of dividend growth Annual dividend guidance of 6% per year to 2025 6% per year ~7% CAGR $2.46 $1.26 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024E 2025E 1) Subject to market conditions, economic outlook, cash flow forecast, and Board approval at the time. 2) 2013 to
Slide 11: Q2/23 results impacted by untimely outages
Q2/23 results impacted by untimely outages $869M $327M $11M $151M +25% yoy +3% yoy -90% yoy -16% yoy Revenues and other Adjusted EBITDA Net cash flows from AFFO income(1) operating activities • Q2/23 financial results benefitted from a full quarter from Midland Cogen (acquired Sep/22) partially offs
Slide 12: Rare culmination of events led to shortfall in Q2
Rare culmination of events led to shortfall in Q2 $20M to $25M impact Genesee 1&2 Generation vs Pool Price (June 2023) 900 1000 1) Genesee 1&2 unplanned outages 800 900 2) Clover Bar 1&3 800 700 unavailable Alberta Pool Price ($/MWh) 600 700 3) Record high G1&2 Output (MW) 600 temperatures 500 500 4
Slide 13: 6-month financial performance in-line with expectations
6-month financial performance in-line with expectations $1,865M $728M $360M $361M +29% yoy +9% yoy -31% yoy -5% yoy Revenues and other Adjusted EBITDA Net cash flows from AFFO income(1) operating activities • 6-month results reflect strong AB Commercial segment results • Average realized AB power pr
Slide 14: Alberta commercial portfolio
Alberta commercial portfolio Reducing volatility and risk through hedging Power Hedged Volume GWh 2024 2025 2026 10,000 9,000 Power 8,000 Hedged volume (GWh) (3) 8,500 7,000 5,500 7,000 6,000 Weighted average hedged prices(1) ($/MWh) (3) Mid-$70s Low-$70s Low-$70s 5,000 4,000 Forward Alberta power p
Slide 15: Financing new growth projects
Financing new growth projects Dividend Reinvestment Program (DRIP) activated with Q3/23 dividend Inflationary pressures Ongoing • Proceeds to fund equity requirements for the Ontario supply growth projects chain • Expect to raise ~$75M to $80M per annum based on issues participation level of past DR
Slide 16: 2023 targets
2023 targets Exceeded committed capital for growth target Facility availability Sustaining capex ($M) Adjusted EBITDA ($M) AFFO ($M) 94% 94% $135 to $145 $1,455 to $1,515 $805 to $865 $73 $728 $361 Q2/23 YTD 2023T Q2/23 YTD 2023T Q2/23 YTD 2023T Q2/23 YTD 2023T Trending to be above the midpoints of
Slide 17: Question and Answer Period
Question and Answer Period 17
Slide 18: Forward-looking information
Forward-looking information Forward-looking information or statements included in this presentation are provided to inform our electricity and other energy and carbon prices; shareholders and potential investors about management’s assessment of Capital Power’s future plans and performance; opera
Slide 19: Investor Relations
Investor Relations Randy Mah Director, Investor Relations (780) 392-5305 rmah@capitalpower.com 10423 101 Street NW 11th Floor Edmonton, Alberta Canada T5H 0E9 capitalpower.com 19