Northland Power (NPI) Q2 2024 earnings summary

Executive summary

• Q2 2024 Adjusted EBITDA reached CAD 268 million, up 15% year-over-year, driven by strong operating performance, high wind resources in Europe, and new onshore wind projects in New York.

• Adjusted free cash flow and free cash flow per share increased to CAD 27 million and CAD 0.20, respectively, compared to CAD 25 million and CAD 0.16 last year.

• Construction is progressing well on Hai Long (Taiwan), Baltic Power (Poland), and Oneida (Canada), with key milestones achieved and commercial operations expected between 2025 and 2027.

• Sale of the La Lucha Solar facility in Mexico completed in June, providing a CAD 20 million cash gain.

• A 15-year offtake agreement was signed for the Jurassic battery storage project in Alberta, marking a first for the region.

Financial highlights

• Sales rose to $529 million from $472 million year-over-year; gross profit increased to $483 million from $427 million.

• Net income surged to $262 million from $22 million year-over-year; Adjusted EBITDA up to $268 million from $232 million.

• Adjusted free cash flow and free cash flow were CAD 69 million and CAD 51 million, up 9% and 24% year-over-year.

• Per-share adjusted free cash flow and free cash flow were CAD 0.27 and CAD 0.20, up from CAD 0.25 and CAD 0.16 last year.

• Electricity production grew to 2,563 GWh from 2,024 GWh year-over-year.

Outlook and guidance

• 2024 financial guidance reaffirmed, with expectations to finish at the higher end of the disclosed range due to strong first-half results.

• 2024 Adjusted EBITDA expected in the range of $1.2–$1.3 billion; Adjusted Free Cash Flow per share projected at $1.30–$1.50.

• Free Cash Flow per share for 2024 forecasted at $1.10–$1.30; management expects results at the higher end of guidance.

• Construction projects totaling CAD 16 billion are on track, with CAD 6 billion spent to date.

• 7%-10% Adjusted EBITDA CAGR targeted through 2027, supported by locked-in construction growth.