Bilanol/iStock via Getty Images Note: All amounts are in Canadian Dollars On our previous coverage of Capital Power Corporation ( OTCPK:CPXWF ) ( TSX: CPX:CA ), we gave it a buy rating and suggested investors would do well to enter it using the exchangeable units, which were trading at a 1% discount. Since then, CPX has done modestly well with a total return of 8.38%.
Data by YCharts The convertible units got converted into CPX in a timely fashion and your total return on those was about 9.5%. While the story has gone well for us, the company itself has had to deal with significantly more challenges than what we anticipated at the time of our coverage.
We review these and tell you how we played it to reduce our risks. Q1-2024 CPX's Q1-2024 results were fairly weak. The company had telegraphed the issues to analysts, and that group was fairly busy lowering the bar right into Q1-2024.
Yet, there was a big miss across all relevant metrics. CPX Q1-2024 Presentation The big culprit was Alberta where the adjusted EBITDA collapsed down 43%. The US side protected the company to some extent, but it is still Alberta that drives the numbers and the overall weakness showed in EBITDA and cash flow.
CPX Q1-2024 Presentation The actual adjusted funds from operations (AFFO) came in at $1.15 per share. Estimates were generally over $1.
25 per share. CPX compared the AFFO numbers relative to their targets for 2024, and we (and even they) think they will come up short now. CPX Q1-2024 Presentati.
