Newly independent Vistra Energy offers first-time guidance

Vistra Energy (OTCQX: VSTE), the parent company for TXU Energy and Luminant out of Texas, on Dec. 6 announced updated expectations for 2016 adjusted EBITDA and adjusted free cash flow and also initiated 2017 guidance for the same metrics. 

Vistra Energy was recently spun out of the bankruptcy case of Energy Future Holdings.

Curt Morgan, Vistra Energy’s chief executive officer, said: “We are moving into 2017 as a newly reorganized entity with our support cost structure competitively aligned, a strong balance sheet, and diversified assets. We believe our unique integrated business model, pairing TXU Energy’s leading retail platform with Luminant’s reliable and efficient generating capabilities, will provide investors with an attractive, stable earnings profile, as is evidenced by our 2017 guidance. We will continue to focus on increasing shareholder value in 2017 as we leverage and expand on our core competencies.”

Vistra Energy anticipates 2016 adjusted EBITDA in the range of $1,550 million to $1,615 million, representing an increase of nearly 4% based on the midpoint as compared to 2016 adjusted EBITDA projected by its predecessor, Texas Competitive Electric Holdings Co. LLC, in connection with its bankruptcy plan of reorganization and its related exit financing. Vistra Energy expects 2016 adjusted free cash flow in the range of $615 million to $680 million.

Vistra Energy is initiating guidance for 2017 with an adjusted EBITDA range of $1,350 million to $1,500 million and an adjusted free cash flow range of $745 million to $925 million. The 2017 adjusted EBITDA guidance reflects a more than 8% increase based on the midpoint as compared to 2017 adjusted EBITDA projected by its predecessor in connection with its bankruptcy plan of reorganization and its related exit financing. The primary drivers of the projected increase are continued outperformance by TXU Energy versus previous projections, as well as enhanced support cost savings realization.

The 2017 guidance ranges reflect the impact of two planned nuclear refueling outages in 2017 versus one refueling outage in each of 2015 and 2016. Excluding the approximately $65 million impact of incremental operating and maintenance expenses related to the additional outage, the 2017 adjusted EBITDA guidance would have reflected a range of $1,415 million to $1,565 million. The 2017 guidance ranges further reflect forward price curves as of Sept. 30, 2016 and assume certain coal units will operate flexibly, depending on market conditions and needs, while anticipating no coal plant retirements. Several of the coal units have operated in recent years as seasonal peakers and not at full-year baseload.

Vistra Energy plans to begin hosting quarterly earnings conference calls in connection with the release of its fourth quarter 2016 financial results in March 2017.

TXU Energy sells retail electricity and value-added services to approximately 1.7 million residential and business customers in Texas. Luminant generates and sells electricity and related products from a diverse fleet of generation facilities totaling approximately 17,000 MW of generation in Texas, including 2,300 MW fueled by nuclear power, 8,000 MW fueled by coal and 6,000 MW fueled by natural gas, and is a large purchaser of wind-generated electricity.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.