Release Date: August 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Northland Power Inc (NPIFF, Financial) reported a strong second quarter with an adjusted EBITDA of $268 million, up $36 million from the same quarter in 2023.
- The company reaffirmed its 2024 financial guidance, projecting results at the higher end of the disclosed range due to strong operating performance.
- Significant progress was made on major construction projects, including Hai Long and Baltic Power offshore wind projects, and the Oneida battery energy storage project.
- Northland Power Inc (NPIFF) successfully completed the sale of the 130-megawatt La Lucha Solar Facility in Mexico, focusing on core markets.
- The company has a robust development pipeline of 9 gigawatts and continues to pursue growth in core markets like Alberta, Ontario, and New York.
Negative Points
- Gemini experienced an unplanned outage at one of its two export cables, although insurance is expected to cover most repair costs.
- Higher operating costs were reported at offshore wind facilities due to increased maintenance, impacting overall expenses.
- The company faced an administrative breach related to debt covenants, although it was rectified by the time of the earnings call.
- There are ongoing risks and uncertainties related to the completion of major construction projects, particularly with seasonal challenges.
- The CEO search is still ongoing, creating some uncertainty in leadership continuity.
Q & A Highlights
Q: Can you provide more detail on the capacity contract at Jurassic?
A: Given the confidential nature of the contract, we can't provide much more detail at this time. We've had detailed conversations with potential constructors and battery suppliers, and we will seek a minor amendment to our existing permits. COD is expected around 2026-2027. (John Brace, CEO)
Q: Any context on what's been submitted to the NYSERDA process?
A: We are seeking profitable projects and have made an attractive offer to NYSERDA. We are optimistic but will wait for the results. (John Brace, CEO)
Q: What are the critical items to get done this year before winter for your construction projects?
A: For Hai Long, we aim to achieve several milestones before winter, but there is float in the schedule. Baltic Power's major in-water work starts next year. The primary concern is the health and safety of everyone working on the projects. (John Brace, CEO)
Q: Will the Jurassic battery contract support moving the PV project forward?
A: The battery and PV projects are closely located but do not depend on each other. The ITC was factored into the contract considerations. (John Brace, CEO)
Q: Can you provide more background on the Alberta school group involved in the Jurassic Battery project?
A: The group consists of 43 boards of education acting together as a purchasing group. They see battery storage as a complement to their energy demands. (John Brace, CEO)
Q: Can you provide details on the Gemini export cable damage?
A: The cable has been retrieved and is being examined. We suspect it is related to a prior fault in the fiber-optic cable. The failure is believed to be insurable. (John Brace, CEO)
Q: How are you thinking about monetizing existing mature assets and redeploying proceeds?
A: We are open to exploring sell-downs or sale opportunities if they are in the best interest of shareholders. Redeploying capital in a more accretive way is a top consideration. (Adam Beaumont, CFO)
Q: Can you explain the administrative breach mentioned in the MD&A?
A: It was a nonstandard, administrative item. We were in breach at June 30, but it has been rectified. We are enhancing controls going forward. (Adam Beaumont, CFO)
Q: How are you progressing with the ScotWind offshore wind projects?
A: We are progressing but will be judicious about our financial commitments. We are not currently seeking onshore or other technologies in that market. (John Brace, CEO)
Q: Can you remind us of your Canadian development portfolio outside of Alberta?
A: We have battery, solar, and wind opportunities in Alberta and are pursuing projects in Ontario. We also have nascent projects in other parts of Canada. (John Brace, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
