CPX reported adj. EBITDA of $222M (Q4/19 of $230M), below consensus of $241M
and our $244M estimate (mainly Alberta facilities). AFFO of $86M was spot on with
management's guidance of $500-550M). Looking forward, CPX reiterated it can achieve
its previously noted 2021E $500-550M AFFO range (and adj. EBITDA of $975-1,025M).
Conference call today at 11:00 a.m. ET. Tel: (800) 319-4610.
Key Points
Alberta commercial. Alberta Commercial delivered adj. EBITDA of $53M, well below
our $73M and $80M in Q4/19, mainly due to higher emissions costs with the company
deferring carbon credits into 2021 (no change in this year's guidance). The good news
is that CPX was able to achieve an average realized Alberta power price of $56, above
spot of $46, reflecting strong portfolio optimization/hedging activities.
Alberta contracted. The segment’s EBITDA of $55M (Q4/19 of $57M) was short our
$63M estimate, but fleet availability was strong at 97%.
Ontario and B.C. contracted. EBITDA of $83M ($77M in Q4/19) was a few million above
our $79M estimate given favorable renewable resource conditions.
U.S. contracted. U.S. contracted came in at $47M vs. our estimate of $50M (Q4/19 of
$40M) mainly on lower-than-expected production at Bloom wind in Kansas.
Corporate. -$16M vs. our -$20M. In passing, CPX noted that it has exercised its option
to increase its equity interest in C2CNT to 40% from 25% in 2021 for $13M (expected)
- the Genesee Carbon Conversion Centre is advancing to in-service 1H/22 (2,500 tonne
carbon nanotubes)
Hedged positions. CPX is now 29% hedged for 2021 in the Low-60's (vs. 21% in the
High-50's), 27% for 2022 in the Mid-$50's (vs. 25% in the Mid-50's), and 21% for 2023 in
the Mid-$50's (vs. 17% in the Low-50's).