Capital Power ((TSE:CPX)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Capital Power was marked by a positive sentiment, underscoring the company’s successful execution of long-term strategies and robust financial performance. The call highlighted the extension of key contracts and completion of strategic projects, which are pivotal to the company’s growth trajectory. Despite these achievements, the company acknowledged challenges such as lower performance from certain assets and rising maintenance costs.
Successful Long-Term Contract Extensions
Capital Power announced the execution of a new long-term contract for the Midland Cogeneration Venture, extending it to 2040. This extension is set to provide 10 years of additional contracted revenue, significantly boosting the company’s annual adjusted EBITDA by approximately USD 100 million, marking an 85% increase over the current contract pricing.
Strategic Battery Storage Projects in Ontario
The company successfully commissioned its first two battery storage projects in Ontario at York and Goreway, adding 170 megawatts of capacity contracted through 2047. These projects were completed on time and under budget, with an excellent safety record, and are expected to contribute approximately $35 million in annual adjusted EBITDA over time.
Record Adjusted EBITDA Growth
Capital Power reported a record adjusted EBITDA of $477 million for the third quarter, reflecting a 20% increase from the same period last year. This growth was primarily driven by strong contributions from the U.S. flexible generation portfolio.
Positive Financial Performance Year-to-Date
For the first nine months of 2025, Capital Power’s adjusted EBITDA totaled $1.166 billion, a 15% increase from the previous year. The company’s AFFO also saw a significant rise, reaching $882 million, up 40% year-over-year.
PJM Assets Performing Above Expectations
The Hummel Station and Rolling Hills facilities exceeded expectations, delivering strong adjusted EBITDA contributions due to higher dispatch rates and favorable pricing conditions.
Lower Results from La Paloma and Decatur
The gains from the U.S. flexible generation portfolio were partially offset by lower results from the La Paloma and Decatur assets, which faced generation issues.
Increased Maintenance and Capital Costs
Capital Power anticipates a 40% increase in outage days for maintenance in 2026 compared to 2025, along with higher capital costs. Sustaining capital costs for U.S. flexible generation assets are expected to range between $30 to $35 per kW of nameplate capacity.
Forward-Looking Guidance
During the earnings call, Capital Power reaffirmed its 2025 guidance, projecting adjusted EBITDA between $1.5 billion and $1.65 billion, and AFFO between $950 million and $1.1 billion. The company emphasized strategic developments such as the long-term contract extension for the Midland Cogeneration Venture and the commissioning of Ontario battery storage projects as key drivers of long-term shareholder value.
In summary, Capital Power’s earnings call conveyed a strong positive sentiment, highlighting the company’s strategic successes and robust financial performance. While challenges remain, particularly with certain assets and rising maintenance costs, the company’s forward-looking guidance and strategic initiatives underscore its commitment to sustained growth and shareholder value.