TransAlta Reports Strong Second Quarter 2025 Results, Advancement of Strategic Priorities and Reaffirms Guidance
CALGARY, Alberta, Aug. 01, 2025 (GLOBE NEWSWIRE) -- TransAlta Corporation (TransAlta or the Company) (TSX:TA) (NYSE:TAC) today reported its financial results for the second quarter ended June 30, 2025.
"Our strong second quarter results illustrate the value of our diversified fleet and exceptional operational performance. Our Alberta portfolio's hedging strategy and active asset optimization continued to generate realized prices well above spot prices while environmental credits generated by our hydro and wind assets significantly offset our gas fleet's carbon price compliance obligation. While we continue to navigate a challenging Alberta price environment, our assets continue to perform well, and we remain confident in achieving our 2025 Outlook," said John Kousinioris, President and Chief Executive Officer.
"Our team remains focused on advancing our strategic priorities. We are pleased with the progress on our Alberta data centre strategy and the associated negotiations, which now reflect the Alberta Electric System Operator's (AESO) approach to large load integration. The AESO currently expects Demand Transmission Service contracts to be executed in mid-September, which will secure each proponent's access to system capacity. We continue to work closely with our counterparties and are progressing towards the execution of a data centre memorandum of understanding in relation to our system capacity allocation," added Mr. Kousinioris.
"Finally, we continue to progress negotiations on conversion opportunities at Centralia and are working towards executing a definitive agreement later this year with our customer for the full capacity of Centralia Unit 2."
Second Quarter 2025 Highlights
Achieved strong operational availability of 91.6 per cent in 2025, compared to 90.8 per cent in 2024
Adjusted EBITDA(1) of $349 million, compared to $316 million for the same period in 2024
Free Cash Flow (FCF)(1) of $177 million, or $0.60 per share, remained consistent with the same period in 2024
Adjusted earnings before income taxes(1) of $122 million, or $0.41 per share, compared to $112 million, or $0.37 per share, for the same period in 2024
Cash flow from operating activities of $157 million, or $0.53 per share, compared to $108 million, or $0.36 per share, from the same period in 2024
Net loss attributable to common shareholders(1) of $112 million, or $0.38 per share, compared to net earnings attributable to common shareholders of $56 million, or $0.18 per share, for the same period in 2024
Second Quarter 2025 Operational and Financial Highlights
$ millions, unless otherwise stated
Three Months Ended
Six Months Ended
June 30,2025
June 30,2024
June 30,2025
June 30,2024
Operational information
Availability (%)
91.6
90.8
93.3
91.5
Production (GWh)
4,813
4,781
11,645
10,959
Select financial information
Revenues
433
582
1,191
1,529
Adjusted EBITDA(1)
349
316
619
658
Adjusted earnings before income taxes(1)
122
112
150
256
(Loss) earnings before income taxes
(95
)
94
(46
)
361
Adjusted net earnings after taxes attributable to common shareholders(1)
54
70
84
197
Net (loss) earnings attributable to common shareholders
(112
)
56
(66
)
278
Cash flows
Cash flow from operating activities
157
108
164
352
Funds from operations(1)
252
236
431
490
Free cash flow(1)
177
177
316
398
Per share
Adjusted net earnings attributable to common shareholders per share(1)
0.18
0.23
0.28
0.64
Net (loss) earnings per share attributable to common shareholders, basic and diluted
(0.38
)
0.18
(0.22
)
0.91
Cash flow from operating activities per share
0.53
0.36
0.55
1.15
Funds from operations per share(1)
0.85
0.78
1.45
1.60
FCF per share(1)
0.60
0.58
1.06
1.30
Dividends declared per common share
—
0.06
0.07
0.06
Weighted average number of common shares outstanding
297
303
297
306
Segmented Financial Performance
$ millions
Three Months Ended
Six Months Ended
June 30,2025
June 30,2024
June 30,2025
June 30,2024
Hydro
126
83
173
170
Wind and Solar
89
88
191
177
Gas
128
142
232
267
Energy Transition
19
2
56
29
Energy Marketing
26
39
47
78
Corporate
(39
)
(38
)
(80
)
(63
)
Total adjusted EBITDA(1)(2)
349
316
619
658
Adjusted earnings before income taxes(1)
122
112
150
256
(Loss) earnings before income taxes
(95
)
94
(46
)
361
Adjusted net earnings attributable to common shareholders(1)
54
70
84
197
Net (loss) earnings attributable to common shareholders
(112
)
56
(66
)
278
Key Business Developments
Credit Facility Extension
On July 16, 2025, the Company executed agreements to extend committed credit facilities totalling $2.1 billion with a syndicate of lenders. The revised agreements extend the maturity dates of the syndicated credit facility from June 30, 2028 to June 30, 2029 and the bilateral credit facilities from June 30, 2026 to June 30, 2027.
Divestiture of Poplar Hill
During the second quarter of 2025, the Company signed an agreement for the divestiture of the 48 MW Poplar Hill asset, as required by the consent agreement with the federal Competition Bureau and pursuant to the terms of the acquisition of Heartland Generation. Energy Capital Partners will be entitled to receive the proceeds from the sale of Poplar Hill, net of certain adjustments, following completion of the divestiture.
Recontracting of Ontario Wind Facilities
During the second quarter of 2025, the Company successfully recontracted its Melancthon 1, Melancthon 2 and Wolfe Island wind facilities through the Ontario Independent Electricity System Operator Five-Year Medium-Term 2 Energy Contract (MT2e). MT2e will replace current energy contracts for the three wind facilities when they expire, extending the contract dates until April 30, 2031, for Melancthon 1 and April 30, 2034, for Melancthon 2 and Wolfe Island.
Normal Course Issuer Bid (NCIB)
On May 27, 2025, the Company announced that it had received approval from the Toronto Stock Exchange to repurchase up to a maximum of 14 million common shares during the 12-month period that commenced May 31, 2025 and will terminate on May 30, 2026.
On Feb. 19, 2025, the Company announced it was allocating up to $100 million to be returned to shareholders in the form of share repurchases.
During the six months ended June 30, 2025, the Company purchased and cancelled a total of 1,932,800 common shares at an average price of $12.42 per common share, for a total cost of $24 million, including taxes.
Conference call and webcast
TransAlta will host a conference call and webcast at 9:00 a.m. MST (11:00 a.m. EST) today, August 1, 2025, to discuss our second quarter 2025 results. The call will begin with comments from John Kousinioris, President and Chief Executive Officer, and Joel Hunter, EVP Finance and Chief Financial Officer, followed by a question-and-answer period.
Second Quarter 2025 Conference Call
Webcast link: https://edge.media-server.com/mmc/p/zpy9addj
To access the conference call via telephone, please register ahead of time using the call link here: https://register-conf.media-server.com/register/BI215de673b3704e0da46b2a02e0f35bb0. Once registered, participants will have the option of 1) dialing into the call from their phone (via a personalized PIN); or 2) clicking the "Call Me" option to receive an automated call directly to their phone.
If you are unable to participate in the call, the replay will be accessible at https://edge.media-server.com/mmc/p/zpy9addj. A transcript of the broadcast will be posted on TransAlta's website once it becomes available.
Related Materials
Related materials, including the consolidated financial statements and Management's Discussion and Analysis (MD&A) will be available on the Investor Centre section of TransAlta's website at https://transalta.com/investors/presentations-and-events/ and https://transalta.com/investors/results-reporting/ and have been filed under TransAlta Corporation's profile on SEDAR+ at www.sedarplus.ca and with the U.S. Securities and Exchange Commission on EDGAR at www.sec.gov.
Notes
1. These items (Adjusted EBITDA, adjusted earnings (loss) before income taxes, adjusted net earnings (loss) after income taxes attributable to common shareholders, funds from operations, free cash flow, adjusted net earnings attributable to common shareholders per share, funds from operations (FFO) per share and free cash flow (FCF) per share) are non-IFRS measures, which are not defined, have no standardized meaning under IFRS and may not be comparable to similar measures presented by other issuers. Presenting these items from period to period provides management and investors with the ability to evaluate earnings (loss) trends more readily in comparison with prior periods' results. Please refer to the Non-IFRS financial measures section of this earnings release for further discussion of these items, including, where applicable, reconciliations to measures calculated in accordance with IFRS.2. During the first quarter of 2025, our Adjusted EBITDA composition was amended to exclude the impact of realized gain (loss) on closed exchange positions and Australian interest income. Therefore, the Company has applied this composition to all previously reported periods. Refer to the Additional Non-IFRS and Supplementary Financial Measures section of this earnings release.
Non-IFRS financial measures
We use a number of financial measures to evaluate our performance and the performance of our business segments, including measures and ratios that are presented on a non-IFRS basis, as described below. Unless otherwise indicated, all amounts are in Canadian dollars and have been derived from our consolidated financial statements prepared in accordance with IFRS. We believe that these non-IFRS amounts, measures and ratios, read together with our IFRS amounts, provide readers with a better understanding of how management assesses results.
Non-IFRS amounts, measures and ratios do not have standardized meanings under IFRS. They are unlikely to be comparable to similar measures presented by other companies and should not be viewed in isolation from, as an alternative to, or more meaningful than, our IFRS results.
We calculate adjusted measures by adjusting certain IFRS measures for certain items we believe are not reflective of our ongoing operations in the period. Except as otherwise described, these adjusted measures are calculated on a consistent basis from period to period and are adjusted for specific items in each period, unless stated otherwise.
Adjusted EBITDA
Each business segment assumes responsibility for its operating results measured by adjusted EBITDA. Adjusted EBITDA is an important metric for management that represents our core operational results.
During the first quarter of 2025, our adjusted EBITDA composition was amended to remove the impact of realized gain (loss) on closed exchange positions, which was included in adjusted EBITDA composition until the fourth quarter of 2024. The adjustment was intended to explain a timing difference between our internally and externally reported results and was useful at a time when markets were more volatile. The impact of realized gain (loss) on closed exchange positions was removed to simplify our reporting. Accordingly, the Company has applied this composition to all previously reported periods.
During the first quarter of 2025, our adjusted EBITDA composition was amended to remove the impact of Australian interest income, which was included in adjusted EBITDA composition until the fourth quarter of 2024. Initially, on the commissioning of the South Hedland facility in July 2017, we prepaid approximately $74 million of electricity transmission and distribution costs. Interest income, which was recorded on the prepaid funds, was reclassified as a reduction in the transmission and distribution costs expensed each period to reflect the net cost to the business. The impact of Australian interest income was removed to simplify our reporting since the amounts were not material. Accordingly, the Company has applied this composition to all previously reported periods.
Interest, taxes, depreciation and amortization are not included, as differences in accounting treatment may distort our core business results. In addition, certain reclassifications and adjustments are made to better assess results, excluding those items that may not be reflective of ongoing business performance. This presentation may facilitate the readers' analysis of trends. The most directly comparable IFRS measure is earnings before income taxes.
Adjusted Revenue
Adjusted Revenues is Revenues (the most directly comparable IFRS measure) adjusted to exclude:
The impact of unrealized mark-to-market gains or losses and unrealized foreign exchange gains or losses on commodity transactions.
Certain assets that we own in Canada and Western Australia are fully contracted and recorded as finance leases under IFRS. We believe that it is more appropriate to reflect the payments we receive under the contracts as a capacity payment in our revenues instead of as finance lease income and a decrease in finance lease receivables.
Revenues from the Planned Divestitures as they do not reflect ongoing business performance.
Adjusted Fuel and Purchased Power
Adjusted Fuel and Purchased Power is Fuel and Purchased Power (the most directly comparable IFRS measure) adjusted to exclude fuel and purchased power from the Planned Divestitures as it does not reflect ongoing business performance.
Adjusted Gross Margin
Adjusted gross margin is calculated as adjusted revenues less adjusted fuel and purchased power and carbon compliance costs, where adjustments to revenue or fuel and purchased power were applied as stated above. The Skookumchuck wind facility has been included on a proportionate basis in the Wind and Solar segment. The most directly comparable IFRS measure is gross margin in the consolidated statement of earnings.
Adjusted OM&A
Adjusted OM&A is OM&A (the most directly comparable IFRS measure) adjusted to exclude:
Acquisition-related transaction and restructuring costs, mainly comprised of severance, legal and consultant fees as these do not reflect ongoing business performance.
ERP integration costs representing planning, design and integration costs of upgrades to the existing ERP system as they represent project costs that do not occur on a regular basis, and therefore do not reflect ongoing performance.
OM&A from the Planned Divestitures as it does not reflect ongoing business performance.
Adjusted Net Other Operating Income
Adjusted Net Other Operating Income is Net Other Operating Income (the most directly comparable IFRS measure) adjusted to exclude insurance recoveries related to the Kent Hills replacement costs of the tower collapse as these relate to investing activities and are not reflective of ongoing business performance.
Adjustments to Earnings (Loss) in Addition to Interest, Taxes, Depreciation and Amortization
Fair value change in contingent consideration payable is not included as it is not reflective of ongoing business performance.
Asset impairment charges and reversals are not included as these are accounting adjustments that impact depreciation and amortization and do not reflect ongoing business performance.
Any gains or losses on asset sales or foreign exchange gains or losses are not included as these are not part of operating income.
Adjustments for Equity-Accounted Investments
During the fourth quarter of 2020, we acquired a 49 per cent interest in the Skookumchuck wind facility, which is treated as an equity investment under IFRS and our proportionate share of the net earnings is reflected as equity income on the statement of earnings under IFRS. As this investment is part of our regular power-generating operations, we have included our proportionate share of adjusted EBITDA for the Skookumchuck wind facility in our total adjusted EBITDA. In addition, in the Wind and Solar adjusted results, we have included our proportionate share of revenues and expenses to reflect the full operational results of this investment. We have not included adjusted EBITDA of other equity-accounted investments in our total adjusted EBITDA as it does not represent our regular power-generating operations.
Adjusted Earnings (Loss) before income taxes
Adjusted earnings (loss) before income taxes represents segmented earnings (loss) adjusted for certain items that we believe do not reflect ongoing business performance and is an important metric for evaluating performance trends in each segment.
For details of the adjustments made to earnings (loss) before income taxes (the most directly comparable IFRS measure) to calculate adjusted earnings (loss) before income taxes, refer to the Reconciliation of Non-IFRS Measures on a Consolidated Basis by Segment section of the MD&A.
Adjusted Net Earnings (Loss) attributable to common shareholders
Adjusted net earnings (loss) attributable to common shareholders represents net earnings (loss) attributable to common shareholders adjusted for specific reclassifications and adjustments and their tax impact, and is an important metric for evaluating performance. For details of the reclassifications and adjustments made to net earnings (loss) attributable to common shareholders (the most directly comparable IFRS measure), please refer to the reconciliation of net earnings (loss) to adjusted net earnings (loss) attributable to common shareholders in the Reconciliation of Non-IFRS Measures on a Consolidated Basis by Segment section of the MD&A.
Adjusted Net Earnings (Loss) per common share attributable to common shareholders
Adjusted net earning (loss) per common share attributable to common shareholders is calculated as adjusted net earnings (loss) attributable to common shareholders divided by a weighted average number of common shares outstanding during the period. The measure is useful in showing the earnings per common share for our core operational results as it excludes the impact of items that do not reflect an ongoing business performance. Adjusted net earnings (loss) attributable per common share is a non-IFRS ratio and the most directly comparable IFRS measure is net income (loss) per common share attributable to common shareholders. Refer to the reconciliation of earnings (loss) before income taxes to adjusted net earnings (loss) attributable to common shareholders in the Reconciliation of Non-IFRS Measures on a Consolidated Basis by Segment section of the MD&A.
Funds From Operations (FFO)
Represents a proxy for cash generated from operating activities before changes in working capital and provides the ability to evaluate cash flow trends in comparison with results from prior periods. FFO is calculated as cash flow from operating activities before changes in working capital and is adjusted for transactions and amounts that the Company believes are not representative of ongoing cash flows from operations.
Free Cash Flow (FCF)
Represents the amount of cash that is available to invest in growth initiatives, make scheduled principal debt repayments, repay maturing debt, pay common share dividends or repurchase common shares and provides the ability to evaluate cash flow trends in comparison with the results from prior periods. Changes in working capital are excluded so that FFO and FCF are not distorted by changes that we consider temporary in nature, reflecting, among other things, the impact of seasonal factors and timing of receipts and payments.
Non-IFRS Ratios
FFO per share, FCF per share and adjusted net debt to adjusted EBITDA are non-IFRS ratios that are presented in the MD&A. Refer to the Reconciliation of Cash Flow from Operations to FFO and FCF and Key Non-IFRS Financial Ratios sections of the MD&A for additional information.
Net Interest Expense
Net interest expense is calculated as total interest expense less total interest income and non-cash items. For detailed calculation refer to the table in the Reconciliation of Adjusted EBITDA to FFO and FCF section of this MD&A. Net Interest expense is a proxy for the actual cash interest paid that approximates the cash outflow in the FFO and FCF calculation. The most directly comparable IFRS measure is total interest expense.
FFO per share and FCF per share
FFO per share and FCF per share are calculated using the weighted average number of common shares outstanding during the period. FFO per share and FCF per share are non-IFRS ratios.
Supplementary financial measures include available liquidity, carbon compliance per MWh, fuel cost per MWh, hedged power price average per MWh, realized foreign exchange loss, sustaining capital expenditures, the Alberta electricity portfolio metrics and unrealized foreign exchange loss (gain).
Reconciliation of these non-IFRS financial measures to the most comparable IFRS measure are provided below.
Reconciliation of Non-IFRS Measures on a Consolidated Basis by Segment
The following table reflects adjusted EBITDA and adjusted earnings (loss) before income taxes by segment and provides reconciliation to earnings (loss) before income taxes for the three months ended June 30, 2025:
Hydro
Wind &Solar(1)
Gas
EnergyTransition
EnergyMarketing
Corporate
Total
Equity-accounted investments(1)
Reclassadjustments
IFRSfinancials
Revenues
129
59
204
73
38
(67
)
436
(3
)
—
433
Reclassifications and adjustments:
Unrealized mark-to-market (gain) loss
18
68
71
15
(2
)
—
170
—
(170
)
—
Decrease in finance lease receivable
—
—
7
—
—
—
7
—
(7
)
—
Finance lease income
—
2
3
—
—
—
5
—
(5
)
—
Revenues from Planned Divestitures
—
—
(3
)
—
—
—
(3
)
—
3
—
Unrealized foreign exchange gain on commodity
—
—
—
—
(2
)
—
(2
)
—
2
—
Adjusted revenue
147
129
282
88
34
(67
)
613
(3
)
(177
)
433
Fuel and purchased power
7
9
106
51
—
—
173
—
—
173
Reclassifications and adjustments:
Fuel and purchased power related to Planned Divestitures
—
—
(1
)
—
—
—
(1
)
—
1
—
Adjusted fuel and purchased power
7
9
105
51
—
—
172
—
1
173
Carbon compliance costs (recovery)
—
1
(8
)
—
—
(67
)
(74
)
—
—
(74
)
Adjusted gross margin
140
119
185
37
34
—
515
(3
)
(178
)
334
OM&A
13
25
65
18
8
45
174
(1
)
—
173
Reclassifications and adjustments:
OM&A related to Planned Divestitures
—
—
(1
)
—
—
—
(1
)
—
1
—
ERP integration costs
—
—
—
—
—
(6
)
(6
)
—
6
—
Acquisition-related transaction and restructuring costs
—
—
—
—
—
(1
)
(1
)
—
1
—
Adjusted OM&A
13
25
64
18
8
38
166
(1
)
8
173
Taxes, other than income taxes
1
5
5
—
—
1
12
—
—
12
Net other operating income
—
—
(12
)
—
—
—
(12
)
—
—
(12
)
Adjusted EBITDA(2)
126
89
128
19
26
(39
)
349
Depreciation and amortization
(8
)
(52
)
(74
)
(13
)
—
(4
)
(151
)
1
—
(150
)
Equity income
—
—
—
—
—
—
—
—
1
1
Interest income
—
—
—
—
—
7
7
(1
)
—
6
Interest expense
—
—
—
—
—
(89
)
(89
)
1
—
(88
)
Realized foreign exchange gain
—
—
—
—
—
6
6
—
—
6
Adjusted earnings (loss) before income taxes(2)
118
37
54
6
26
(119
)
122
Reclassifications and adjustments above
(18
)
(70
)
(80
)
(15
)
4
(7
)
(186
)
Finance lease income
—
2
3
—
—
—
5
—
—
5
Skookumchuk earnings reclass to Equity income(1)
—
(1
)
—
—
—
1
—
—
—
—
Asset impairment charges
—
—
—
(11
)
—
(2
)
(13
)
—
—
(13
)
Unrealized foreign exchange loss
—
—
—
—
—
(23
)
(23
)
—
—
(23
)
Earnings (loss) before income taxes
100
(32
)
(23
)
(20
)
30
(150
)
(95
)
—
—
(95
)
The Skookumchuck wind facility has been included on a proportionate basis in the Wind and Solar segment.
Adjusted EBITDA, adjusted earnings (loss) before income taxes are non-IFRS measures, are not defined, have no standardized meaning under IFRS and may not be comparable to similar measures presented by other issuers. Refer to the Additional Non-IFRS and Supplementary Financial Measures section of this earnings release.
The following table reflects adjusted EBITDA and adjusted earnings (loss) before income taxes by segment and provides reconciliation to earnings (loss) before income taxes for the three months ended June 30, 2024:
Hydro
Wind &Solar(1)
Gas
EnergyTransition
EnergyMarketing
Corporate
Total
Equity-accounted investments(1)
Reclassadjustments
IFRSfinancials
Revenues
99
112
284
79
47
(34
)
587
(5
)
—
582
Reclassifications and adjustments:
Unrealized mark-to-market (gain) loss
1
8
10
(14
)
1
—
6
