By Robb M. Stewart

TransAlta is sticking with its earnings target for the full year after it logged a sharp drop in earnings and revenue for the latest quarter.

The Calgary, Alberta, utility on Wednesday said it recorded first-quarter earnings of 46 million Canadian dollars ($33.4 million), or C$0.15 a share, against C$222 million, or C$0.72, a year earlier.

Earnings before interest, taxes, depreciation and amortization fell to C$270 million from C$342 million in the prior year, adjusted to exclude certain items the company doesn't believe reflect ongoing business performance. Ebitda for the company's wind-and-solar and energy-transition operations rose, but this was offset by declines for its hydro-electric and its natural-gas businesses.

TransAlta's production in the January-to-March period increased to 6,832 gigawatt hours from 6,178 the year before, but revenue for the period dropped 20% to C$758 million.

The company said its hydro earnings were dented by lower spot-power prices and services prices in the Alberta market, and that gas-segment earnings were squeezed by lower volumes with a drop in prices thanks to milder weather.

The company, which owns a fleet of electrical-power generation assets in Canada, the U.S. and Australia, late last year targeted investment of C$3.5 billion by 2028 in an effort to add up to 1.75 gigawatts of new capacity through the construction or acquisition of assets.

The company added 2.2 gigawatts of generation to its fleet last year, with three contracted wind facilities reaching commercial operation in addition to the C$542 million acquisition of Heartland Generation, which brought 1.7 gigawatts of gross installed capacity. Production in the latest quarter was boosted by the Heartland facilities, as well as higher output from new wind and solar facilities, though production in Australia was lower due to a fall in customer demand.

TransAlta said it remains confident in its ability to achieve its earlier guidance for the year, including targeting adjusted Ebitda of between C$1.15 billion and C$1.25 billion and free cash flow of C$450 million to C$550 million, given additional capacity and Heartland.

Adjusted Ebitda fell to C$1.25 billion in 2024, but came in toward the higher end of the company's forecast for up to C$1.3 billion, while full-year free cash flow of C$569 million was below TransAlta's earlier guidance for as much as C$600 million.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

May 07, 2025 07:54 ET (11:54 GMT)

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