Northland Power Q2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
August 15, 2024

There are 10 speakers on the call.

Operator

Welcome to the Northland Power Conference Call to discuss the Second Quarter 2024 Results. As a reminder, this conference is being recorded on Thursday, August 15, 2024, at 10 am Eastern. Conducting this call for Northland Power are John Brace, Executive Chair and Adam Beaumont, Interim Chief Financial Officer. Before we begin, Northland's management has asked me to remind listeners that all figures presented are in Canadian dollars and to caution that certain information presented and responses to questions may contain forward looking statements that include assumptions and are subject to various risks. Actual results may differ materially from management's expected or forecasted results.

Operator

Please read the forward looking statements section in yesterday's news release announcing Northland Power's results and be guided by its contents when making investment decisions or recommendations. The release is available at www.northlandpower.com. I will now turn the call over to Mr. John Brace.

Speaker 1

Thank you very much, Didi, and thank you to all of you for joining us this morning for Northland's 2024 Second Quarter Earnings Call. Before we update you on the quarter, I want to first underscore our firm commitment to the health and safety of every Northlander and every person working on our behalf, both on our construction sites and across our operations and offices. With a dedicated team of highly skilled health and safety professionals, Northland continues to stay committed in its pursuit of maintaining our industry leading health and safety standards. We are pleased that our strong Q1 performance continued into the Q2 of the year. This strong operating performance resulted in an increase in 2nd quarter adjusted EBITDA to $268,000,000 up approximately $36,000,000 compared to the same quarter of 2023.

Speaker 1

Adjusted free cash flow and free cash flow per share were $0.27 and $0.20 per share respectively in the quarter compared to $0.25 and $0.16 per share during the same period a year ago. As reflected in our press release yesterday, we are reaffirming our 2024 financial guidance and outlook, which is tracking to the higher end of the disclosed guidance range due to our strong operating results so far. Adam Beaumont, our Interim Chief Financial Officer, will provide more details on financial performance later in the call. Moving on to construction updates. We continue to make good progress on both Hai Long and Baltic Power, our 2 large offshore wind projects in Taiwan and Poland respectively and Oneida, our battery energy storage project in Canada.

Speaker 1

Construction of Hai Long continues to advance well with the fabrication of foundations, cables and onshore and offshore substations. The onshore construction work is advancing well and nearing completion. Offshore construction activities are progressing this quarter, marking the completion of the installation of offshore substation foundation jackets, the 1st offshore substation topside and continuing with pin pile installations at multiple turbine locations. Hai Long and Tai Long 2A and 2B pin pile installation is on track and is expected to be completed by the end of Q3 of this year. The prefabrication for the 1st batch of turbine components, including towers, generators and nacelles is progressing well with multiple parts on route to Taiwan.

Speaker 1

We look forward to the first power being produced in the second half of twenty twenty five with full commercial operations expected by 2027. Once operational, Hai Long will be one of the largest offshore wind facilities in Asia and provide enough clean energy to power more than 1,000,000 Taiwanese households. Moving to Poland and Baltic Power, the project continues to make progress on the fabrication of onshore and offshore substations, foundations, export cables, multiple turbine components and inter array cables. Turbine component manufacturing and construction of the onshore substation and the operations and management building is well underway. Major in water onshore offshore construction activity is expected to start in early 2025 and full commercial operations are expected in 2026.

Speaker 1

Lastly, an update on the Oneida battery energy storage project here in Ontario. Oneida continues to make great progress with all battery packs delivered on-site and cabling now underway. The medium voltage transformers have been delivered and high voltage transformers have arrived in Canada and are expected to arrive at site by the end of the summer. Site grading and stormwater controls are fully complete and the underground conduit is fully fab installed. Full commercial operation remains on track for 2025.

Speaker 1

We have good momentum on our construction programs and continue to be vigilant, disciplined and focused on the safe execution of these projects. It will provide a material boost in adjusted EBITDA and free cash flow upon completion as scheduled. There seems to be a view that we have paused growth on development while focusing only on our construction program. This is far from the reality. We remain active in pursuing growth in our core markets, supported by our strong and dedicated development teams.

Speaker 1

We continue to advance our 9 gigawatt development pipeline. We are focused on moving forward with profitable projects in our core markets and see good opportunities ahead. For our onshore renewables, we remain focused on Alberta, Ontario and New York. For Alberta, we announced that we signed a 15 year bilateral offtake agreement for our 80 Megawatt 2 Hour Jurassic Battery Storage Project with the Alberta Schools Commodities Purchasing Consortium. This is the first offtake of its kind in Alberta for a battery storage project and is a key milestone in the advancement of Northland's Alberta portfolio.

Speaker 1

We also participated in the latest NYSERDA auction last week and await the results expected this fall. For offshore wind, we are advancing our early stage development projects in Scotland and South Korea. Moving on to other significant second quarter results. In June, we successfully completed the sale of the 130 Megawatt La Lucha solar facility in Mexico. As noted, on our Investor Day in March, we continue to focus our attention in the markets that we have identified as our core markets.

Speaker 1

We continue to assess asset sale or sell down opportunities. Clearly, the critical factor in our decision making will be line of sight to redeploy proceeds into opportunities that will provide higher value accretion to our shareholders. In June, Gemini experienced an unplanned outage at 1 of its 2 export cables. The in water cable repair has commenced and completion is expected in September 2024. Insurance proceeds are expected to cover most of the repair costs.

Speaker 1

This event occurred during the lower production season. We were therefore able to redirect the production via the second export cable at the wind park and the timetable for the repairs means that this event is expected to have limited impact on full year results. Now moving on to the CEO search. We are making great progress. The Board and I have been thrilled with the caliber of candidates that we met.

Speaker 1

I'm reticent to provide a detailed timeline until commitments are firm out of respect to the candidates whose careers are involved. With that, I will turn things over to Adam to give you a more detailed update on the financials.

Speaker 2

Thank you, John, and good morning, everyone. Strong results in the second quarter continued Northland's successful financial performance for the first half of the year. We generated adjusted EBITDA of over $265,000,000 this quarter, representing a 15% increase compared to last year. The significant factors for the increase include $10,000,000 of higher operating results at the offshore wind facilities in Europe, primarily due to a higher wind resource at all three facilities. This was modestly offset by higher unpaid curtailments related to negative prices and grid outages at our German facilities.

Speaker 2

There was also a $10,000,000 increase in operating results at Ipsa, driven primarily by inflation escalation and appreciation of the Colombian peso, a $17,000,000 decrease in development expenditures as a result of more focused spending offset by some one time G and A costs in 2024 and a $9,000,000 increase from the contribution at our New York onshore wind facilities, which commenced operations in the late 2023. The key factor partially offsetting the increase of EBITDA was the $23,000,000 of gains that we received from partial asset sell downs in 2023. With respect to adjusted free cash flow and free cash flow, Northland generated approximately $69,000,000 $51,000,000 respectively, which is an increase of 9% 24% from last year. This was due to our strong operating results and a $20,000,000 cash gain from the La Lucha sale. Offsets to the increase were $19,000,000 of higher taxes from higher operating results and $22,000,000 of lower hedge settlements from gains realized last year.

Speaker 2

On a per share basis, these figures translated into adjusted free cash flow of $0.27 and free cash flow of $0.20 in the quarter compared to $0.25 $0.16 per share from last year. As John noted earlier, our 3 construction projects with an estimated total cost of CAD16 $1,000,000,000 continue to progress as planned. Northland with our partners have spent CAD6 $1,000,000,000 on these projects so far. In June, we were encouraged to see Canada enact the 30% Clean Technology Investment Tax Credits or ITCs, which will accelerate clean power development in Canada. This incentive is expected to benefit Canadian developers focusing on large scale renewable power generation projects, including Northland.

Speaker 2

For example, Northland and our partners will receive a direct benefit on the Oneida project, which is currently in construction. We expect further benefits for this new legislation, which will support our development activities across Canada for the future as well. Looking at our investment grade balance sheet, Northland continues to be in a strong position with access to approximately $800,000,000 of liquidity. This liquidity is comprised of cash on hand and funds available under our corporate revolving facility. As John noted, we reaffirmed our 2024 financial guidance due to strong operating results experienced in the first half of twenty twenty four.

Speaker 2

Management is currently projecting the full year financial outlook to be at the higher end of this disclosed guidance range. Beyond that, our future looks bright. We see progress on construction, advancing the growth pipeline, which will bring significant long term contracted cash flow for our business. Overall, we are very pleased with the results and the progress for the first half of twenty twenty four. And I will now turn the call back over to John for concluding remarks.

Speaker 1

Thank you, Adam. To wrap up, we have had a solid first half of the year with both our strategy and long term guidance remaining strong. We're proud of the continued progress our teams have made across our 3 projects in construction. We remain focused on the safe and successful execution of these projects into commercial operations. As we look ahead, we continue to be excited about the growth opportunities for Northland.

Speaker 1

Contextually, global energy demand is accelerating and is expected to grow at a rate of 4% in each of 2024 and 2025. This demand is driven by multiple tailwinds, including reshoring, electrification of industrial, retail and commercial sectors and artificial intelligence and data centers. Data centers could consume up to 9% of U. S. Electricity generation by 2,030 compared to 2.5% consumption in 2022.

Speaker 1

With the continued and growing need for a robust supply of a reliable and affordable clean energy globally, the opportunity for experienced and established developers like Northland is clear. We have a role to play in finding thoughtful solutions and balance short term energy needs with longer term vision for a net zero future. CorePlans diversified energy mix of offshore and onshore wind, solar, storage and natural gas makes us well positioned to support the stability of energy grids while renewable technologies continue to mature. Given the key priorities for each government and commercial and industrial customers being affordability and security of supply, new natural gas fired power plants along with renewables will be required to meet this required load. Northland has access to and experience in developing, constructing and operating a broad array of energy generation technologies and we are in a great position to help our customers meet their energy needs.

Speaker 1

We are having conversations with data center customers given enormous demand for electricity from this particular group. I would also like to remind you that Northland has a 30 year corporate power purchase agreement at Hai Long, which is still one of the largest corporate PPAs in the world. This demonstrates our capability to secure long term power contracts with commercial and industrial players. Our construction growth is locked in for the next 3 years to achieve our 7% to 10% adjusted EBITDA CAGR through 2027. With that growth locked in, we are in a strong position that affords us the opportunity to prudently progress the projects in our existing development pipeline in a highly disciplined and selective manner.

Speaker 1

To create continued value for our shareholders, we pursue only the best growth opportunities in front of us, but the right people to bring these opportunities to fruition. In this current environment, we are confident quality opportunities will be available to us. Our strong and talented teams have the knowledge, experience and entrepreneurial mindset that ensures we will remain leaders in originating, developing, constructing and operating large and complex energy projects. We have a bright future ahead of us and we're excited for all that it is to come. This concludes our prepared remarks.

Speaker 1

We'd now be happy to take your questions. Didi, would you please open the lines?

Operator

Thank you. And our first question comes from Sean Steuart of TD Cowen. Your line is open.

Speaker 3

Thank you. Good morning. A couple of questions. John,

Speaker 4

wondering if

Speaker 3

you can give us some more detail on the capacity contract at Jurassic, more detail I suppose on terms and what's needed to move that project towards FID and thoughts on timing for eventual COD as well?

Speaker 1

Sean, I appreciate your desire to have more detail, but given the confidential nature of the contract, we're not in a position to provide much more detail than we already have at this point in time. In terms of progress forward, you can imagine that we've had very detailed conversations with potential constructors of the project, potential battery suppliers for the project. And together with our Jurassic solar project, we will be seeking a minor amendment to our already existing permits for the project. So it's pretty well straightforward development from here as far as I'm concerned and into a very appropriate and attractive power contract.

Speaker 3

And as far as COD, should we be thinking 2026, 2027? Is that realistic?

Speaker 1

Yes. Okay.

Speaker 3

Thanks for that. And given that the RFPs already happened, any context you can give us on what's been submitted to the NYSERDA process and thoughts on advancing those projects?

Speaker 1

I think I'd just point out to one word I used in the prepared remarks and that is profitable. We are seeking profitable projects. So we have made what we believe is an attractive offer to NYSERDA and an offer that we would be very happy with if it is accepted. We are optimistic about it, but we'll see what happens when they release the results. Beyond that, we are not releasing details on what projects we have submitted.

Speaker 3

Okay. That's all I have for now. I will get back in the queue. Thank you.

Speaker 1

Thank you, Sean.

Operator

Our next question comes from Rupert Merer of National Bank. Your line is open.

Speaker 5

Hi, good morning. Thanks for taking the question. If I can start with your construction plans, it sounds like construction is progressing well. Looking forward, what keeps you up at night in order to keep that on track? And what are the sort of critical items to get done this year before you head into winter?

Speaker 1

I think it depends which project you're looking at. There's seasonality to the construction of Hai Long. So we are attempting to achieve a number of things before the winter season closes in. However, there continues to be float in the schedule, so we still remain confident that the project will unfold according to its, I'll call it, overall schedule. As you can appreciate, for any construction projects, there are things that are give and take as it unfolds as one reacts to challenges that come up or takes advantages of opportunities that appear as well.

Speaker 1

So generally, it's going well. Baltic really doesn't start major in water work until next year. So really not much I can add on that, but the outer water work is progressing well for the project. What keeps me up at light, frankly, is 1st and foremost, the very first thing I mentioned in my remarks, the health and safety of everyone working on the projects that is mission number 1 without any doubt whatsoever. Beyond that, there's always unknowns.

Speaker 1

So it's the unknown unknowns, but I think the teams and our contractors have proved to be very adept at dealing with those.

Speaker 5

Very good. Thanks. And then if I could follow-up on the Jurassic contract. So it sounds like you're moving forward with the battery and not the PV plant. But now you have this contract for the battery.

Speaker 5

Is that going to support moving the PV forward as well? Is that going to help you to sign a contract on profitable terms?

Speaker 1

I think the I would just look at that maybe as Phase 1, Phase 2. We happen to have accomplished Phase 1 and we're working on Phase 2. But they're being they are although they are closely located next to each other, one does not depend on the other. Okay. And I assume

Speaker 5

that the ITC was factored into the contract considerations there?

Speaker 1

Sorry, your voice is a little faint. I think you said ITC and the answer is yes.

Speaker 5

And with ONITA and the ITC, do you have any expectations for how much you could receive and when you might be able to start invoicing for those amounts?

Speaker 2

Yes. I think Rupert that the ITC is known to be 30%. We've disclosed our capital costs. So and as you know and probably well aware, the receipt of that comes after you after COD and at that point you file your return. So you can kind of get an understanding of the timeline.

Speaker 2

So I think that will factor to get you to that point in time. I think one thing obviously for Oneida, because we have multiple partners, we will obviously be it will be shared across the group.

Speaker 5

Right. Very good. I'll leave it there. Thank you.

Operator

Thank you. Our next question comes from Nelson Ng of RBC Capital Markets. Your line is open.

Speaker 6

Great. Thanks and good morning everyone. So just a quick follow-up on Jurassic battery or solar project. So can you provide a bit more background on the Alberta School Group in terms of like why they wanted specifically battery storage and like are they long wind and solar and needed batteries to balance things out or is there an opportunity for them to get involved in Phase 2, because in Phase 2 is solar panels?

Speaker 1

The school or the boards, I'll call it consortium, I think is composed of 43 Boards of Education that act together as I put it in my mind is basically a purchasing group. And they have been very from what I understand, I would describe them as very active and at the forefront of managing their affairs and their energy needs. They're active in the gas markets. They're active in the electricity markets and they see battery storage as something to complement their energy demands into the future. So they were very important and in my mind forward thinking group of organizations.

Speaker 1

And we've managed to enter into a mutually beneficial power purchase agreement with them or battery storage agreement, I should call it with them. On the sorry?

Speaker 6

Yes. Sorry, you're going to talk about Phase 2?

Speaker 1

I was going to say on the solar initiative, the Jurassic initiative, that's a little too early to talk about that in terms of anybody in particular's role in it at this stage given the confidentiality of the exercise.

Speaker 6

Okay, got it. And then just switching gears a bit, the Gemini, the damage to one of the Gemini export cables, can you provide a bit of color in terms of how that got damaged? Like was that maintenance work? Was it an anchor from a ship? Or are you still kind of exploring what the cause was?

Speaker 1

The cable has been retrieved from the bottom of the ocean and the joint that has resulted in a failure has been cut out and is being sent away for forensic examination. We should know the results September ish timeframe. In the meantime, the joint is being replaced obviously, as we speak. Our suspicion is that it's related to a prior fault in the fiber optic cable that is part of the export cable that resulted in a short. The forensic examination will reveal whether that is the true assumption or not.

Speaker 6

Okay, got it. So it wasn't like a fiscal impact or something, it was just something that failed.

Speaker 4

And then

Speaker 1

We believe yes, we believe it's an insurable failure to be concurrent.

Speaker 6

Okay. And then just staying with offshore wind. So I think in your MD and A, you talked about how operating costs were, I think, 24% higher during the quarter due to higher maintenance. Like is this I presume this wasn't related to the cable failure. I guess, this timing or I'm just thinking, was it timing in terms of more work getting done this year rather than last year?

Speaker 6

And from a big picture perspective, are maintenance costs typically covered under your long term O and M contracts with the OEMs?

Speaker 2

Yes. So just to be clear on the Gemini piece, it's not related to the higher costs are not related there. There was some maintenance periods that are scheduled that you typically see in this quarter where wind is typically lower. In terms of the O and M coverage, so keep in mind that it's different between Gemini and our German projects. For Gemini, we do have the O and M contract with our original, I think Siemens.

Speaker 2

But on the 2 German facilities, it's Northland effectively that's performing a lot of the maintenance services. So it is slightly different from that perspective. I think from an availability side of things, the all three wind farms have been operating well, and that's why we were able to capture the strong wind over the quarter. And obviously, if you look at the MD and A, you can see on a 6 month basis, we've hit historical highs.

Speaker 6

Great. Thanks for the color, Adam. I'll leave it there.

Operator

Thank you. Our next question comes from Robert Hope of Scotiabank. Your line is open.

Speaker 7

Good morning, everyone. How are you thinking about monetizing of existing mature cash flowing assets and in the context of redeploying the proceeds into development assets or other M and A opportunities, that may take some time to generate cash. How do you think about kind of the trade off there, especially given kind of where payout ratios are?

Speaker 2

Thanks, Rob. I think our message has been pretty clear over the past. Like we're always open to explore sell downs or sale opportunities where we think opportunities will exist that are in the best interest of shareholders. There's obviously multiple considerations that we look to. To your point, one of the very strong important pieces of it for asset recycling overall is that we have an option to redeploy capital in a more accretive way over the future.

Speaker 2

So that would be top of mind as we're considering looking at the various options.

Speaker 7

Thank you. And then just looking at the debt side, the MD and A highlighted an administrative breach that was rectified by the time the statements came out. Can you walk us through exactly what that was as well as kind of whether or not processes or controls have been altered moving forward?

Speaker 2

Absolutely. So I think just to point out like from all intensive purposes like all our we're in line with all our covenants from a financial perspective. This was a very non standard, very administrative item that unfortunately because we were in breach at June 30, our auditors have very black and white guidance about how we're supposed to account for it. But as you can see in our disclosures, as of today, we are no longer in breach and everything has gone back or we continue to carry forward. In terms of controls, yes, we have addressed this again very non standard technical item and we are enhancing controls going forward.

Operator

Thank you. Thank you. Our next question comes from Nick Voiecuk of Cormark Securities. Nick, your line is open.

Speaker 1

Thanks. Good morning. John, in

Speaker 8

your prepared remarks, you mentioned, obviously, you're still progressing some of the offshore wind projects in Scotland. You've got the Scott wind. Given all the encouraging developments there between AR6 and what they're doing with transmission, can you kind of give us an update on how you're thinking about that market and whether there could be additional opportunities or ways for you to speed up some growth in that area?

Speaker 1

Sorry, I didn't quite capture all you said. The sound quality was a little funny. Could you please repeat it?

Speaker 8

Sorry about that. My apologies. The U. K. Opportunity, you mentioned in your prepared remarks that you're still progressing Scott Wind, but with all of the encouraging developments that we've had there with AR6, that auction, what they're doing with the transmission opportunity, do you have ways where you could either speed up Scott Wind, maybe look to add additional projects or acquire anything else in that market?

Speaker 1

The short answer is yes, but we will be judicious about what we do. As you know, each offshore wind project is a major financial commitment to develop it. And so we want to be prudent about where we spend our resources on it.

Speaker 8

Okay. Thank you. And in that market, sticking with this idea, if that is really becoming an attractive area for growth, could you start to explore potentially onshore or other technologies there, maybe taking battery energy storage like you're having success in Alberta and Ontario and exporting those skills to that market?

Speaker 1

At the moment, we are not. But it's our responsibility as an organization to seek out the most attractive opportunities. So I wouldn't rule it out in the future, but we're not seeking those kinds of things in that market at the moment.

Speaker 8

Okay, understood. Thank you.

Operator

Thank you. Our next question comes from Ben Pham of BMO. Your line is open.

Speaker 4

Hi, thanks. Can you remind us on your Canadian development portfolio outside of Alberta where you could be positioned?

Speaker 1

We have battery, solar and wind opportunities in Alberta that we're pursuing. And a number of them already have the fundamental permits that are necessary.

Speaker 4

Okay. So to confirm, you're not interested in other markets outside of Alberta in Canada?

Speaker 1

Oh, I'm sorry. Sorry. We are pursuing projects in Ontario as well. And we have nascent things in other parts of Canada that are too immature at the moment to talk about.

Speaker 4

Okay, got it. And can you comment with this ITC, seems like a pretty good situation for the industry. But can you comment, do you think it's going to result in any sort of irrational bidding? Or do you think most folks are going to assume that ITC will flow to the non developer?

Speaker 2

So I think from an ITC perspective, like as you know, and we've iterated before, like when we were looking at Oneida, we considered it without, within without. So I think it definitely will help developers and I think encourage further investment in Canada, which is really the intent. And from a bidding perspective, I think the key thing to note is for Northland, we look at different forms of securing revenue contracts. For example, with the recent one that we announced today, it was a bilateral arrangement. So I think we want to make sure everybody is comfortable with the returns going forward.

Speaker 2

But overall, it's a good thing for Canada and investment for developers like us.

Speaker 4

Okay, got it. And maybe a follow-up, your comments on the data center discussions. Can you comment, is that more specific to a region? Can you confirm, is it more gas over renewables? And does your cap allocation a few years ago, you mentioned that gas was going to come down to 5%.

Speaker 4

Is that something could that change at all? Or is there any change in thought process there?

Speaker 1

Two parts to the answer. We won't go into details about where we're having discussions with data centers. And I would just I just view data centers as another part of the potential power purchaser market. Yes, the fast growing one and one that seems to have great promise, but there are many other places we can sell our electricity as well. Second part?

Speaker 1

So in terms of the thermal, yes, I'm sorry. Thermal is, we think, an area of opportunity in the future for us, but we are going to be very judicious about what we do or don't do. We've made commitments to particular ESG targets, and we're very conscious of the fact that any thermal development must have a very good environmental story that goes with it.

Speaker 4

Okay, understood. Thank you.

Operator

Thank you. Our next question comes from Mark Jarvi of CIBC. Your line is open.

Speaker 9

Yes. Good morning, everyone. Just coming back to the idea of potentially selling assets and redeploying them into assets that create value. When you think about that, could that include acquisitions? And are you actively looking at operating or late stage development projects?

Speaker 9

Or would that be more focused around organic development around the assets and projects you already have right now?

Speaker 2

Yes. I think for the most part, as you know, we're right now, we're focused on the construction pipeline and the markets that John alluded to earlier. Obviously, we're very aware and receiving inbounds of all the opportunities right now in North America. But I would say for 2024, our focus is primarily our development target markets as long as construction execution.

Speaker 1

I'll just maybe add sorry, I'll just add to that. Maybe if you think of capital allocation within the company, we believe that development of projects provides a superior return to our shareholders than as compared to purchasing operating assets.

Speaker 9

Okay. That's helpful context, Sean. And then making good progress in Hai Long, as you work towards the end of this year, you'll come up against the winter buffer, which you put in your project schedule. Have you decided whether or not you'll try to advance through that, try to push a little bit harder? Do you have the capability, the desire to do that right now?

Speaker 1

At the moment, we don't see a need to do that. And so we would not be doing that.

Speaker 9

Understood. And then I think in the MD and A mentions about bringing and I think you talked about John, the nacelles and the generators and the blades to Taiwan. I thought that Siemens would be manufacturing all or some of the components in Taiwan. Is there a change there or pivot? Or is it just sort of more like an assembly there and pieces are coming to Taiwan for assembly?

Speaker 1

There are local content commitments related to the turbines and related to some of the foundation jackets for the project. And we are doing everything we can to make sure that our suppliers stick to those commitments.

Speaker 9

Has there been any adjustments though in terms

Speaker 1

of how Certainly not all of the turbine, for example, is manufactured is meant to be manufactured in Taiwan even in the first place.

Speaker 9

But you haven't adjusted like you're sticking to the plan you would have put in place when you reached FID a year ago?

Speaker 1

Operator, are you We lost the line.

Speaker 9

Oh, I'm here still. I just asked, has there been any pivot or change in terms of how you're

Speaker 1

And operator, can you hear us?

Operator

I can hear you now. Yes.

Speaker 9

Adam John, can you hear me? Mark still here.

Speaker 1

Can the last caller hear us?

Operator

You're actually fading in and out.

Speaker 2

Operator, can you hear us?

Operator

I can hear you now.

Speaker 1

Okay. Apologies to everyone listening. Something happened with our communications here and we lost the ability to speak out for some unknown reason. Let's continue on.

Operator

I'm showing no further questions at this time. I'd like to turn it back to John Brace for closing remarks.

Speaker 1

Thank you, everyone, and apologies again for that interruption and our ability to communicate with you. We'd like to thank you for joining us today. We will hold our next earnings call following the release of our Q3 2024 results in November. In the meantime, we thank you for your continued support. You may close the lines now, Didi.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.

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Key Takeaways

  • Adjusted EBITDA for Q2 2024 rose to $268 million, a $36 million year-over-year increase, with adjusted free cash flow per share of $0.27, and management reaffirmed 2024 guidance at the high end of the range.
  • Construction of the Hai Long and Baltic Power offshore wind projects and the Oneida battery storage facility is progressing on schedule, with Hai Long’s first power expected in 2H 2025, Baltic Power commercial in 2026, and Oneida in 2025.
  • Northland’s 9 GW development pipeline remains active, highlighted by a 15-year offtake agreement for an 80 MW Jurassic battery storage project in Alberta and ongoing bids in Ontario, New York, Scotland and South Korea.
  • In June, Northland completed the sale of its 130 MW La Lucha solar facility in Mexico and continues to explore asset sale or sell-down opportunities to recycle capital into higher-value growth projects.
  • An unplanned export cable outage at the Gemini wind park is under repair and expected to be resolved by September with insurance covering most costs, limiting any material impact on full-year production.
AI Generated. May Contain Errors.
Earnings Conference Call
Northland Power Q2 2024
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