Northland Power Inc (NPIFF) Q1 2025 Earnings Call Highlights: Navigating Challenges with ...
Free Cash Flow: $157 million, 30% lower than Q1 2024.
Free Cash Flow Per Share: $0.60 compared to $0.88 in Q1 2024.
Commercial Availability: 95% in the offshore wind business.
Onshore Fleet Availability: 97%.
Construction Spending: $8 billion spent on Hai Long and Baltic Power projects, with $7 billion remaining.
Corporate Liquidity: $1.1 billion available.
Warning! GuruFocus has detected 7 Warning Signs with NPIFF.
Release Date: May 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Northland Power Inc (NPIFF) successfully completed the Oneida battery storage project ahead of schedule and under budget, marking it as Canada's largest energy storage project.
The company has made significant progress on its offshore wind projects, Hai Long and Baltic Power, with substantial investments and construction milestones achieved.
Northland Power Inc (NPIFF) maintains a strong commitment to safety, evidenced by the Honoris CCS Award for innovation and safety received by its EBSA utility in Colombia.
The company has a diversified portfolio across geographies and technologies, which helps mitigate risks associated with localized issues such as low wind resources.
Northland Power Inc (NPIFF) has a strong balance sheet with $1.1 billion of available corporate liquidity, positioning it well for future growth and development projects.
The company's Q1 2025 adjusted EBITDA decreased by 20% compared to the same quarter in 2024, primarily due to historically low offshore wind resources in the North Sea.
Free cash flow for the first quarter was 30% lower than the same period last year, reflecting the impact of weak wind conditions.
Despite the completion of the Oneida project, the reduction in costs does not directly translate to a one-to-one reduction in equity funding requirements.
The company faces challenges in advancing future offshore wind projects due to higher costs and execution risks, as seen in the industry.
Northland Power Inc (NPIFF) is experiencing a competitive environment for capital allocation, requiring careful evaluation of growth opportunities to ensure optimal deployment.
Q: Can you clarify if the $100 million cost savings on the Oneida project directly reduces the equity funding requirement? A: Jeff Hart, Chief Financial Officer: It's not a one-to-one reduction. Various factors, including debt service and ITCs, influence the equity funding requirement.
Q: Has there been any change in the EBITDA cash flow outlook for the Oneida project since its inception? A: Jeff Hart, Chief Financial Officer: We expect the economics to remain within the promised range, with 60% of revenues from capacity payments, aligning with our initial expectations.
Q: What are Northland Power's future growth opportunities, particularly in wind or solar projects in regions like Quebec or the UK? A: Christine Healy, President and CEO: We are exploring a variety of opportunities across markets, both organic and inorganic. Each opportunity must compete for capital to ensure the best deployment for shareholder value.
Q: How does Northland Power plan to manage the cadence of advancing growth opportunities while focusing on lowering the payout ratio? A: Christine Healy, President and CEO: We are evaluating our pipeline and capital allocation to balance growth with financial discipline. More details will be shared at our upcoming Investor Day.
Q: What is Northland Power's perspective on the growth potential for gas-fired power, considering supply chain challenges and cost inflation? A: Christine Healy, President and CEO: We see gas-fired power as crucial for a reliable energy mix. We have good supply chain relationships and options, allowing us to proceed with projects without current constraints.
Q: Are there any impacts from the recent grid outage in Spain on Northland Power's operations? A: Christine Healy, President and CEO: There were no negative impacts on our operations in Spain. The team handled the situation well, ensuring safety and operational integrity.
Q: What is the expected timeline for generating first power at the Hai Long project, and are there any turbine installation requirements? A: Christine Healy, President and CEO: We expect first power in the back half of this year. There is no minimum number of turbines required for initial power generation, and installation is progressing well.
Q: How is Northland Power addressing supply chain challenges for the Hai Long and Baltic projects? A: Christine Healy, President and CEO: We maintain constant vigilance over our supply chain, ensuring delivery on schedule and cost. Our supply chain is currently delivering well, with a strong emphasis on safety.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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Northland Power Inc (NPIFF) Q2 2025 Earnings Call Highlights: Navigating Challenges and Seizing ...
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Northland Power Reports Second Quarter 2025 Results
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This decrease was partially offset by the contribution from the Oneida energy storage facility commencing operations this quarter and high wind conditions at the New York and Canadian onshore wind production for the three months ended June 30, 2025 decreased 19% or 174 GWh compared to the same quarter of 2024, primarily due to lower wind resource across all offshore wind facilities and higher unpaid curtailments related to negative prices at German offshore wind facilities, partially offset by lower unpaid curtailments related to grid outages at German facilities. Commercial availability for the three months ended June 30, 2025 was on plan at 95%. Revenue from energy sales of $213 million for the three months ended June 30, 2025 decreased 12% or $28 million, compared to the same quarter of 2024, primarily due to the lower production across all offshore wind facilities. Adjusted EBITDA of $108 million for the three months ended June 30, 2025 decreased 17% or $23 million compared to the same quarter of 2024, primarily due to the same factors noted production at the onshore renewable and energy storage facilities for the three months ended June 30, 2025 was 7% or 45 GWh higher than the same quarter of 2024, primarily due to high wind conditions at the New York and Canadian onshore wind facilities, partially offset by low wind conditions at the Spanish wind facilities. Commercial availability for the three months ended June 30, 2025 was on plan at 97%. Revenue from energy sales of $130 million for the three months ended June 30, 2025 increased 15% or $17 million compared to the same quarter of 2024, primarily due to the contribution from the Oneida energy storage facility commencing operations this quarter, as well as the higher production from New York and Canadian onshore wind facilities, partially offset by lower production from Spanish wind facilities. Please refer to the Management's Discussion and Analysis for the six months ended June 30, 2025, dated August 13, 2025 ('MD&A') for a further breakdown of the Spanish portfolio revenue by component. Adjusted EBITDA of $87 million was 11% or $9 million higher than the same quarter of 2024, primarily due to the same factors noted production of 672 GWh for the three months ended June 30, 2025 decreased 26% or 241 GWh compared to the same quarter of 2024, primarily due to lower operating availability resulting from a planned maintenance outage at North Battleford. Commercial availability for the three months ended June 30, 2025 was on plan at 98%. Revenue from energy sales of $75 million for the three months ended June 30, 2025 was largely in line with the same quarter of 2024. Adjusted EBITDA of $42 million for the three months ended June 30, 2025 decreased 15% or $8 million as compared to the same quarter of 2024, primarily due to lower operating availability because of planned outages at the natural gas from energy sales of $89 million for the three months ended June 30, 2025 was largely in line with the same quarter of 2024. Adjusted EBITDA $40 million for the three months ended June 30, 2025 was largely in line with the same quarter of and administrative () costs of $28 million in the second quarter increased $3 million compared to the same quarter of 2024, primarily due to higher long-term incentive plan costs. Development costs of $13 million decreased $4 million compared to the same quarter of 2024, primarily due to a more focused market strategy. Finance costs of $97 million were largely in line with the same quarter of 2024. Fair value loss on financial instruments was $144 million, primarily due to net movement in the fair value of derivatives related to foreign exchange and interest rate contracts. Foreign exchange gain of $14 million was primarily due to fluctuations in foreign exchange rates. Share of loss from joint ventures of $22 million was primarily due to losses on the fair value of derivatives. Net loss of $53 million in the second quarter of 2025 compared to net income of $262 million in the same quarter of 2024, primarily as a result of the factors described following table reconciles net income (loss) to Adjusted EBITDA: Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Net income (loss) $ (53,149 ) $ 262,356 $ 57,668 $ 411,653 Adjustments: Finance costs, net 82,737 76,585 153,276 149,024 Provision for (recovery of) income taxes (65,147 ) 51,070 (9,814 ) 131,617 Depreciation of property, plant and equipment 166,082 155,967 323,335 310,028 Amortization of contracts and intangible assets 15,651 14,496 30,498 28,827 Fair value (gain) loss on financial instruments 144,433 (83,962 ) 287,923 (8 ) Foreign exchange (gain) loss (13,792 ) 5,549 (44,261 ) 1,665 Fair value adjustment relating to the disposal group held for sale — — — 43,884 Elimination of non-controlling interests (55,186 ) (53,719 ) (134,306 ) (163,914 ) Share of (profit) loss from joint ventures 22,315 (94,644 ) (53,039 ) (133,452 ) Others (1) 1,381 (65,508 ) (4,770 ) (57,268 ) Adjusted EBITDA (2) $ 245,325 $ 268,190 $ 606,510 $ 722,056 (1) Others primarily include Northland's share of Adjusted EBITDA from equity accounted investees, Gemini interest income, finance lease (lessor) and other expenses (income). (2) See Forward-Looking Statements and Non-IFRS Financial Measures below. Adjusted EBITDA of $245 million for the three months ended June 30, 2025 decreased 9% or $23 million compared to the same quarter of 2024. The significant factors decreasing Adjusted EBITDA include: $23 million decrease in operating results at the offshore wind facilities, primarily due to lower production, as described above; and $8 million decrease in operating results from natural gas facilities, primarily due to a planned outage at North Battleford, as described above. The factor partially offsetting the decrease in the Adjusted EBITDA was: $12 million increase due to the contribution from the Oneida energy storage facility commencing operations this quarter and high wind conditions at the New York and Canadian onshore wind facilities, as described following table reconciles cash flow from operations to Free Cash Flow: Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Cash provided by operating activities $ 451,077 $ 170,998 $ 873,885 $ 473,414 Adjustments: Net change in non-cash working capital balances related to operations (134,572 ) 114,124 (174,399 ) 298,975 Non-expansionary capital expenditures (835 ) (1,326 ) (892 ) (1,639 ) Restricted funding for major maintenance, debt and decommissioning reserves 15,882 (7,677 ) 13,819 (12,165 ) Interest (73,078 ) (82,366 ) (137,224 ) (144,415 ) Scheduled principal repayments on facility debt (416,824 ) (270,503 ) (478,002 ) (329,062 ) Funds set aside (utilized) for scheduled principal repayments 207,983 102,073 96,680 (7,874 ) Preferred share dividends (1,388 ) (1,553 ) (2,820 ) (3,111 ) Consolidation of non-controlling interests (14,576 ) (15,741 ) (50,730 ) (83,591 ) Others (1) 10,679 43,360 46,784 78,264 Growth expenditures 14,096 17,205 28,617 25,529 Free Cash Flow (2) $ 58,444 $ 68,594 $ 215,718 $ 294,325 (1) Others mainly include the effect of foreign exchange rates and hedges, interest rate hedge, Nordsee One interest on shareholder loans, acquisition costs, lease payments, interest income, Northland's share of Free Cash Flow from equity accounted investees, investment income, and other non-cash expenses adjusted in working capital excluded from Free Cash Flow in the period. (2) See Forward-Looking Statements and Non-IFRS Financial Measures below. Free Cash Flow of $58 million for the three months ended June 30, 2025 was 15% or $10 million lower than the same quarter of 2024. The significant factors decreasing Free Cash Flow were: $26 million decrease in Adjusted EBITDA (gross of growth expenditures) due to the factors described above; and $12 million increase in scheduled debt repayments on facility-level loans and net movement in funds set aside for maintenance and decommissioning reserves. The factor offsetting the decrease in Free Cash Flow was: $31 million as a result of German trade tax refund receivable. The following table reconciles Adjusted EBITDA to Free Cash Flow: Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Adjusted EBITDA (2) $ 245,325 $ 268,190 $ 606,510 $ 722,056 Adjustments: Scheduled debt repayments (170,131 ) (137,551 ) (310,022 ) (276,803 ) Interest expense (55,974 ) (57,844 ) (104,195 ) (96,788 ) Current taxes 13,073 (36,368 ) (38,561 ) (106,120 ) Non-expansionary capital expenditure (581 ) (1,189 ) (603 ) (1,461 ) Utilization (funding) of maintenance and decommissioning reserves 12,849 (7,302 ) 10,786 (10,979 ) Lease payments, including principal and interest (2,804 ) (317 ) (6,726 ) (3,381 ) Preferred dividends (1,388 ) (1,553 ) (2,820 ) (3,111 ) Foreign exchange hedge gain (loss) (3,030 ) (3,086 ) 18,322 12,891 Others (1) 7,009 28,409 14,410 32,492 Growth expenditures 14,096 17,205 28,617 25,529 Free Cash Flow (2) $ 58,444 $ 68,594 $ 215,718 $ 294,325 (1) Others mainly include repayment of Gemini subordinated debt, and interest rate and foreign currency hedge settlements. (2) See Forward-Looking Statements and Non-IFRS Financial Measures below. Outlook In 2025, Northland continues to deliver key milestones across its construction portfolio. Upon reaching commercial operations, these projects will expand Northland's operations into new jurisdictions, including the Taiwan Strait and Baltic Sea, and are expected to enhance production capacity and reduce portfolio volatility. Northland continues to pursue its development pipeline to further enhance its cash flow profile. To capitalize on the market opportunity presented by growing demand for electricity and energy security, Northland is pursuing opportunities in offshore wind, onshore renewables, battery storage, and natural gas. Primarily driven by lower-than-expected wind resource in our offshore wind facilities to date, management anticipates Adjusted EBITDA to be in the range of $1.2 billion to $1.3 billion, compared to the previous guidance of $1.3 billion to $1.4 billion. Free Cash Flow is now projected to be between $1.15 and $1.35 per share, compared to $1.30 to $1.50 per share previously projected. This revision reflects similar assumptions for the remainder of 2025 consistent with the original financial guidance. Free Cash Flow per share guidance includes the favourable impact from a recent tax ruling in Germany, which contributed to the operating results from our German facilities. The information in this Outlook constitutes forward-looking information within the meaning of applicable Canadian securities laws, is based on several assumptions and is subject to risks and uncertainties. See Forward-Looking Statements in this release as well as the Risk Factors in the 2024 AIF. Second-Quarter Earnings Conference Call Northland will hold an earnings conference call on August 14, 2025, to discuss its second quarter 2025 results. The call will be hosted by Northland's Senior Management, who will discuss the Company's financial results and developments as well as answering questions from analysts. Conference call details are as follows: Thursday, August 14, 2025, 10:00 a.m. ET Participants wishing to join the call and ask questions must register using the following URL below: For all other attendees, the call will be broadcast live on the internet, in listen-only mode and can be accessed using the following link: Webcast URL: For those unable to attend the live call, an audio recording will be available on on Friday, August 15, 2025. Northland's unaudited interim condensed consolidated financial statements for the six months ended June 30, 2025, and related MD&A can be found on SEDAR+ at under Northland's profile and on ABOUT NORTHLAND POWER Northland Power is a Canadian-owned global power producer dedicated to accelerating the global energy transition. Founded in 1987, with almost four decades of experience, Northland has a long history of developing, owning and operating a diversified mix of energy infrastructure assets including offshore and onshore wind, solar, battery energy storage, and natural gas. Northland also supplies energy through a regulated utility. Headquartered in Toronto, Canada, with global offices in seven countries, Northland owns or has an economic interest in 3.5 GW of gross operating generating capacity, 2.2 GW under construction and a significant inventory of early to mid-stage development opportunities encompassing approximately 9 GW of potential capacity. Publicly traded since 1997, Northland's Common Shares, and Series 1 and Series 2 Preferred Shares trade on the Toronto Stock Exchange under the symbols NPI, and respectively. NON-IFRS FINANCIAL MEASURES This press release includes references to the Company's adjusted earnings before interest, income taxes, depreciation and amortization (), Free Cash Flow and applicable payout ratios and per share amounts, which are measures not prescribed by International Financial Reporting Standards (), and therefore do not have any standardized meaning under IFRS and may not be comparable to similar measures presented by other companies. Non-IFRS financial measures are presented at Northland's share of underlying operations. These measures should not be considered alternatives to net income (loss), cash flow from operating activities or other measures of financial performance calculated in accordance with IFRS. Instead, these measures are provided to complement IFRS measures in the analysis of Northland's results of operations from management's perspective. Management believes that Northland's non-IFRS financial measures and applicable payout ratio and per share amounts are widely accepted and understood financial indicators used by investors and securities analysts to assess the performance of a company, including its ability to generate cash through operations. FORWARD-LOOKING STATEMENTS This press release contains statements that constitute forward-looking information within the meaning of applicable securities laws ('forward-looking statements') that are provided for the purpose of presenting information about management's current expectations and plans. Readers are cautioned that such statements may not be appropriate for other purposes. Northland's actual results could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, the events anticipated by the forward-looking statements may or may not transpire or occur. Forward-looking statements include statements that are not historical facts and are predictive in nature, depend upon or refer to future events or conditions, or include words such as 'expects,' 'anticipates,' 'plans,' 'predicts,' 'believes,' 'estimates,' 'intends,' 'targets,' 'projects,' 'forecasts' or negative versions thereof and other similar expressions or future or conditional verbs such as 'may,' 'will,' 'should,' 'would' and 'could'. These statements may include, without limitation, statements regarding future Adjusted EBITDA and Free Cash Flow, including respective per share amounts, dividend payments and dividend payout ratios, the timing for and attainment of the Hai Long and Baltic Power offshore wind, Jurassic BESS battery energy storage project and other growth activity and the anticipated contributions therefrom to Adjusted EBITDA and Free Cash Flow, the expected generating capacity of certain projects, guidance, anticipated dates of full commercial operations, forecasts as to overall project costs, the completion of construction, acquisitions, dispositions, whether partial or full, investments or financings and the timing thereof, the timing for and attainment of financial close and commercial operations for each project, the potential for future production from project pipelines, cost and output of development projects, the all-in interest cost for debt financing, the impact of currency and interest rate hedges, litigation claims, future funding requirements, and the future operations, business, financial condition, financial results, priorities, ongoing objectives, strategies and the outlook of Northland, its subsidiaries and joint ventures. These statements are based upon certain material factors or assumptions that were applied in developing the forward-looking statements, including the design specifications of development projects, the provisions of contracts to which Northland or a subsidiary is a party, management's current plans and its perception of historical trends, current conditions and expected future developments, the ability to obtain necessary approvals, satisfy any closing conditions, satisfy any project finance lender conditions to closing sell-downs or obtain adequate financing regarding contemplated construction, acquisitions, dispositions, investments or financings, as well as other factors, estimates and assumptions that are believed to be appropriate in the circumstances. Although these forward-looking statements are based upon management's current reasonable expectations and assumptions, they are subject to numerous risks and uncertainties. Some of the factors that could cause results or events to differ from current expectations include, but are not limited to, risks associated with further regulatory and policy changes which could impair current guidance and expected returns, risks associated with merchant pool pricing and revenues, risks associated with sales contracts, the emergence of widespread health emergencies or pandemics, Northland's reliance on the performance of its offshore wind facilities at Gemini, Nordsee One and Deutsche Bucht for over 50% of its Adjusted EBITDA, counterparty and joint venture risks, contractual operating performance, variability of sales from generating facilities powered by intermittent renewable resources, wind and solar resource risk, unplanned maintenance risk, offshore wind concentration, natural gas and power market risks, commodity price risks, operational risks, recovery of utility operating costs, Northland's ability to resolve issues/delays with the relevant regulatory and/or government authorities, permitting, construction risks, project development risks, integration and acquisition risks, procurement and supply chain risks, financing risks, disposition and joint-venture risks, competition risks, interest rate and refinancing risks, liquidity risk, inflation risks, commodity availability and cost risk, construction material cost risks, impacts of regional or global conflicts, credit rating risk, currency fluctuation risk, variability of cash flow and potential impact on dividends, taxation, natural events, environmental risks, climate change, health and worker safety risks, market compliance risk, government regulations and policy risks, utility rate regulation risks, international activities, cybersecurity, data protection and reliance on information technology, labour relations, labour shortage risk, management transition risk, geopolitical risk in and around the regions Northland operates in, large project risk, reputational risk, insurance risk, risks relating to co-ownership, bribery and corruption risk, terrorism and security, litigation risk and legal contingencies, and the other factors described in the 'Risks Factors' section of Northland's MD&A and 2024 AIF, which can be found at under Northland's profile and on Northland's website at Northland has attempted to identify important factors that could cause actual results to materially differ from current expectations; however, there may be other factors that cause actual results to differ materially from such expectations. Northland's actual results could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, and Northland cautions you not to place undue reliance upon any such forward-looking statements. The forward-looking statements contained in this release are, unless otherwise indicated, stated as of the date hereof and are based on assumptions that were considered reasonable as of the date hereof. Other than as specifically required by law, Northland undertakes no obligation to update any forward-looking statements to reflect events or circumstances after such date or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise. Certain forward-looking information in this release and the MD&A may also constitute a 'financial outlook' within the meaning of applicable securities laws. Financial outlook involves statements about Northland's prospective financial performance, financial position or cash flows and is based on and subject to the assumptions about future economic conditions and courses of action and the risk factors described above in respect of forward-looking information generally, as well as any other specific assumptions and risk factors in relation to such financial outlook noted in this release and the MD&A. Such assumptions are based on management's assessment of the relevant information currently available and any financial outlook included in this release and the MD&A is provided for the purpose of helping readers understand Northland's current expectations and plans. Readers are cautioned that reliance on any financial outlook may not be appropriate for other purposes or in other circumstances and that the risk factors described above or other factors may cause actual results to differ materially from any financial outlook. The actual results of Northland's operations will likely vary from the amounts set forth in any financial outlook and such variances may be material. For further information, please contact:Adam Beaumont, Senior Vice President, Capital Markets647-288-1019investorrelations@ in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
17-06-2025
- CNBC
Renewable energy skepticism is misplaced, says Northland Power CEO
Christine Healy, President & CEO of Canada-based Northland Power, believes it's a "good time for renewables" despite geopolitical tensions. She also talks about Northland Power's milestones in the Asian region.
