Capital Power Corporation · TSX:CPX
Capital Power — Q2 2019 Earnings Presentation
18 slides from Capital Power's earnings presentation, Jul 29, 2019
Slide 1: Q2 2019 Analyst Conference Call
Q2 2019 Analyst Conference Call Brian Vaasjo, President & CEO Bryan DeNeve, SVP Finance & CFO July 29, 2019 1
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
Non-GAAP financial measures 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 and unrealiz
Slide 4: Alberta power market design
Alberta power market design Following a consultation with both AESO and stakeholders on whether to retain the existing energy-only market or create a capacity market, the Alberta government concluded its electricity market review and on July 24th announced its decision to stay on the existing ener
Slide 5: Ontario power market
Ontario Portfolio Ontario 1159 Ontario power market Natural Gas Portfolio MW In July 2019, Ontario IESO announced they were cancelling further work on a capacity market • Decision took into account stakeholder feedback and concerns Ontario IESO reviewed their long-term planning outlook and over
Slide 6: Q2/19 highlights
Q2/19 highlights Acquired Goreway facility, 875 MW natural gas facility in Ontario that is contracted until 2029 • Successful integration of asset to date Increased the common share dividend by 7.3% to $1.92 per year representing the 6th consecutive annual increase • Guidance for 7% annual incre
Slide 7: Genesee dual-fuel capability
Genesee dual-fuel capability Dual-fuel optionality expected to significantly increase cash flow and further reduce emissions Accelerated plans to increase natural gas capability at the Genesee facility and transform Genesee 1 and 2 to 100% dual-fuel optionality Transformation of the units to 100
Slide 8: Positive outlook in Alberta power prices
Positive outlook in Alberta power prices $/MWh Positive outlook with 2019-2021 80 Average power price Q2/19 average power forward prices averaging $60/MWh in first half of the price consistent with year up 37% 70 Q2/18 $63 60 $56 $57 50 $46 40 30 20 10 0 (1) (1) (1) (1) Q2/18 Q2/19 Q2/18 YTD Q2/19 Y
Slide 9: Financial performance – Q2/19
Financial performance – Q2/19 $M, except per share Q2/19 Q2/18 Change amounts Revenues and other income $366 $369 -1% Adjusted EBITDA $191 $207 -8% Replace Image Basic earnings per share $0.93 $0.55 69% Normalized EPS $0.14 $0.20 -30% Adjusted funds from $85 $76 12% operations (AFFO) AFFO per share
Slide 10: Financial performance – Q2/19 YTD
Financial performance – Q2/19 YTD $M, except per share Q2/19 YTD Q2/18 YTD Change amounts Revenues and other income $763 $682 12% Adjusted EBITDA $393 $386 2% Basic earnings per share $1.42 $0.85 67% Normalized EPS $0.44 $0.48 -8% Adjusted funds from $202 $161 25% operations (AFFO) AFFO per share $1
Slide 11: Portfolio optimization
Portfolio optimization Alberta commercial portfolio positions 2020 2021 2022 % sold forward(1) 41% 4% 9% Contracted prices(1) ($/MWh) Mid-$50 Low-$60 Low-$50 Current average forward prices(2) ($/MWh) $58 $60 $55 2020-22 forward prices have trended upwards since the end of Q1/19; up $7 to $12 in 20
Slide 12: 6-month performance versus 2019 annual targets
6-month performance versus 2019 annual targets 2019 AFFO expected to be at the top end of the range Facility availability Sustaining capex Adjusted EBITDA AFFO $485 to $535M $80 to $90M $870 to $920M 95% 94% $40 $393 $202 Q2/19 YTD Revised Q2/19 YTD Revised Q2/19 YTD Revised Q2/19 YTD Revised Target
Slide 13: 2019 development & construction targets
2019 development & construction targets Construction Whitla Wind Cardinal Point Wind (Alberta) (Illinois) • 201.6 MW (Phase 1) • 150 MW • 20-year PPA • 12-year PPA • $315 - $325M(1) • $289 - $301M • COD in Q4/19 • COD in Mar/20 Other contracted growth Exceeded $500M of committed capital target wit
Slide 14: Sustainability – creating responsible energy for tomorrow
Sustainability – creating responsible energy for tomorrow 2018 Corporate Sustainability Report (CSR) released today • CSR continues to be fully compliant with the internationally recognized Global Reporting Initiative (GRI) Standards Outlines our sustainability targets • Constructing all new nat
Slide 15: Sustainability reporting
Sustainability reporting Feb 2019 – Release of inaugural Climate Change Disclosure based on TCFD(1) recommendations Jul 2019 – Release of 2018 CSR on-line version that is fully compliant with the internationally recognized GRI Standards Feb 2020 – Release of first integrated report, combining
Slide 16: Questions?
Capital¢S apital RESPONSIBLE ENERGY FOR TOMORROW Questions?
Slide 17: Forward-looking information
Forward-looking information Forward-looking information or statements included in this presentation are provided to These statements are based on certain assumptions and analyses made by the Company in light of its inform the Company’s shareholders and potential investors about management’s experien
Slide 18: 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 18