TransAlta Reports Quarterly Loss on Hedging Contracts

TransAlta Corp. (TA), Canada’s largest publicly traded power generator, reported a first-quarter loss on hedging contracts.

The net loss was C$11 million ($11 million), or 4 cents a share, compared with net income of C$88 million, or 39 cents, a year earlier, the Calgary-based company said in a statement on Marketwired today. Excluding one-time items, the company earned 12 cents a share, less than the 20-cent average of 10 analysts’ estimates compiled by Bloomberg.

Off-peak power prices in Washington state, where TransAlta operates the Centralia coal plant, have fallen from a high of more than $80 a megawatt-hour five years ago to $13 on April 17, according to ICE pricing on Bloomberg. TransAlta also faces lower prices in Alberta, analysts for Toronto-based credit rating company DBRS wrote in a March 12 note.

“The challenging merchant power market environment continues to be a concern for the company, particularly with the weak spark spreads in the Pacific Northwest and lower power prices in Alberta expected over the short term,” Andy Thi, Chenny Long and James Jung wrote.

TransAlta fell 2 cents to C$14.06 yesterday in Toronto. The stock has two buy, four holds and six sell recommendations from analysts.

To contact the reporters on this story: Rebecca Penty in Calgary at rpenty@bloomberg.net; Jeremy van Loon in Calgary at jvanloon@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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