By Michael Brooks
Talen Energy released its first earnings report as an independent company last week, reporting net income of $26 million ($0.26/share) for the second quarter of 2015.
That’s based mostly on “legacy” data from the company’s plants, which were owned by PPL and Riverstone Holdings before Talen’s formation on June 1. Collectively, these plants’ profits doubled from $13 million ($0.13/share) in the second quarter of 2014. The company’s operating revenue stayed consistent for both periods, at $1.07 billion.
“Strong operational performance from our nuclear and gas generation assets led to improved financial results in the quarter,” CEO Paul Farr said in a statement.
During a conference call with investors, Farr said the Susquehanna nuclear plant performed well in spite of Unit 2’s cracked turbine blades, which have now been repaired. Talen will replace the blades for both Units 1 and 2 during the plant’s next scheduled fuel outage.
Farr also said that Talen will announce by the fourth quarter what assets it will be divesting to meet FERC’s conditions for approval of the company’s creation.
Despite the company’s optimism, Talen’s stock price remains low, closing at $15.95 last week. That’s well below the $20/share when the company went public.
“We do not believe our current share price reflects the underlying value of our business, and capital discipline will remain our top priority,” Farr told investors.
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Talen reported adjusted EBITDA of $171 million for the quarter, a 35% increase over the same period last year.
Talen predicts EBITDA of $990 million for 2016 based on two deals expected to close by the end of the year.
One is the acquisition of three plants from MACH Gen that will see the company enter the NYISO market. (See Talen Entering NYISO in $1.2B Deal.)
The other is the sale of its renewable energy business to California-based Energy Power Partners. The deal was announced in June, and Talen filed for FERC approval earlier this month (EC15-182).
The $116 million sale ($1,785/kW) includes 25 wind, solar and biofuel facilities totaling 65 MW in PJM and ISO-NE.
