10-QPeriod: Q1 FY2020

Vistra Corp. Quarterly Report for Q1 Ended Mar 31, 2020

Filed May 5, 2020For Securities:VST

Summary

Vistra Corp. reported net income of $45 million for the first quarter of 2020, a decrease from $224 million in the same period of 2019. This decline was primarily attributed to an $84 million impairment of long-lived assets related to the Joppa/EEI coal generation facility and a $28 million loss on the disposal of an investment in Northeast Energy, LP (NELP). Despite the decrease in net income, the company's operational performance remained strong, with cash from operating activities increasing to $552 million. The company also highlighted the continued integration of its acquisitions (Ambit and Crius) and a stable liquidity position. Management emphasized its focus on maintaining critical infrastructure services amidst the evolving COVID-19 pandemic, with no material adverse impact reported on Q1 2020 results, though potential future impacts remain a concern.

Financial Highlights

49 data points
Beta

Revenue

$2.86B

Net Income

$56.00M

2.0% Net Margin

EPS (Diluted)

$0.11

Total Assets

$26.67B

Cash & Equivalents

$717.00M

Free Cash Flow

$291.00M

Financial Statements
Beta
Revenue$2.86B
SG&A Expenses$252.00M
Operating Income$391.00M
Interest Expense$300.00M
Net Income$56.00M
EPS (Basic)$0.11
EPS (Diluted)$0.11
Shares Outstanding (Basic)487.94M
Shares Outstanding (Diluted)490.64M

Key Highlights

  • 1Net income decreased significantly to $45 million in Q1 2020 from $224 million in Q1 2019, primarily due to an $84 million impairment charge and a $28 million investment loss.
  • 2Cash provided by operating activities increased by $164 million year-over-year to $552 million, indicating strong underlying operational cash generation.
  • 3The company experienced a $70 million increase in Selling, General & Administrative (SG&A) expenses, largely due to the integration of recent acquisitions (Crius and Ambit).
  • 4Interest expense and related charges rose by $78 million, mainly driven by a $94 million increase in unrealized mark-to-market losses on interest rate swaps.
  • 5Vistra Corp. maintained a strong liquidity position, with total available liquidity of $1.834 billion as of March 31, 2020.
  • 6The company noted no material adverse impact from COVID-19 on its first quarter 2020 results but cautioned about potential future impacts due to the fluid nature of the pandemic and its economic effects.
  • 7Capital expenditures increased to $261 million in Q1 2020 from $153 million in Q1 2019, reflecting investments in plant upgrades and development projects.

Frequently Asked Questions

The primary reasons for the decrease in net income from $224 million in Q1 2019 to $45 million in Q1 2020 were an $84 million impairment of long-lived assets related to the Joppa/EEI coal generation facility and a $28 million loss on the disposal of an investment in Northeast Energy, LP (NELP). Additionally, unrealized hedging gains decreased by $61 million.

Vistra reported no material adverse impact from COVID-19 on its first quarter 2020 results. The company, deemed a critical infrastructure provider, focused on business continuity and employee safety. However, management acknowledged that the situation is fluid and the pandemic could have a material impact on future results, particularly due to potential changes in customer demand and increased late or uncollectible payments.

As of March 31, 2020, Vistra Corp. reported total available liquidity of $1.834 billion, consisting of $717 million in cash and cash equivalents and $1.117 billion in available capacity under its Revolving Credit Facility. This represents an increase from the previous quarter.

The acquisitions of Ambit and Crius have contributed to an increase in revenue and retail sales volumes. However, they also led to higher Selling, General & Administrative (SG&A) expenses due to integration costs, as well as increased depreciation and amortization related to acquired intangible assets.