Northland Power TSE: NPI reported higher third-quarter adjusted earnings as two major offshore wind projects began contributing revenue, while lower European wind generation weighed on free cash flow. The company reaffirmed its full-year guidance as it prepares to bring the projects into commercial operation.
Adjusted EBITDA rose 9% from a year earlier to CAD 280 million, supported by initial contributions from the Hai Long and Baltic Power projects and higher revenue at natural gas facilities, Chief Financial Officer Jeff Hart said on the company’s Nov. 13 earnings call. Those gains were partly offset by wind resources that, while above long-term averages, were weaker than in the same quarter of 2025.
Free cash flow was CAD 15 million, or CAD 0.06 per share, down from CAD 0.17 per share a year earlier, mainly because of reduced European offshore wind generation. Net income was CAD 201 million, compared with a net loss of CAD 456 million in the prior-year quarter, when Northland recorded a non-cash offshore wind impairment.
Northland maintained its 2026 guidance for adjusted EBITDA of CAD 1.45 billion to CAD 1.65 billion and free cash flow of CAD 1.05 to CAD 1.25 per share. Hart said the outlook reflects increased fourth-quarter production as Hai Long and Baltic Power transition to operations.
Offshore projects approach completion
Both Hai Long in Taiwan and Baltic Power in Poland are generating cash flow and progressing toward full commercial operations, with costs in line with original expectations, Hart said.
At Baltic Power, all 76 turbines have been installed and more than 70% are generating electricity, President and CEO Christine Healy said. Northland expects the remaining turbines to generate power before year-end. At Hai Long, installation and energization are complete, and all 73 turbines are delivering power to the grid. The project is awaiting final authorization from authorities before being handed over to operations.
Asked about the projects’ early operating performance, Healy said Northland expects reliability to ramp up over roughly the first year as teams gain experience with the turbines. Performance is meeting the company’s plans, which account for that ramp-up, she said.
Separately, Hart said repairs to an export cable at the Gemini offshore wind project were completed in September and the facility returned to full operations. Northland expects the outage to have an immaterial net impact on full-year results after insurance proceeds, which it expects to receive by year-end.
Storage and repowering lead growth plans
Northland is targeting an additional 1.4 gigawatts to 1.8 gigawatts of capacity by 2030. Healy said the company has line of sight to at least 90% of that goal, with 300 megawatts under construction and another 900 megawatts in mid-stage development.
The company achieved commercial operations at its Jurassic battery energy storage project ahead of schedule and under budget during the quarter. It also began construction on two battery projects in Poland and closed CAD 185 million of financing for them.
In Spain, Northland is advancing nine battery projects totaling more than 250 megawatts alongside existing wind and solar assets. The batteries would use existing land rights and grid connections, allowing the company to shift electricity sales to more valuable hours and pursue other revenue streams.
Healy said the Spanish projects’ business cases do not depend on securing capacity contracts, although participation in a planned 2027 capacity market could be an option for some larger projects. The company is also advancing a 100-megawatt battery project at Gemini and nine solar repowering projects in Ontario.
In Nova Scotia, Northland added approximately 350 megawatts of mid-stage development opportunities during the quarter. Healy said Canadian projects must compete for capital and still need to meet the company’s return requirements as they advance toward final investment decisions.
Funding and return thresholds
Northland’s five-year plan calls for approximately CAD 6 billion of gross investment through 2030, with about 75% expected to come from project debt and the remainder from Northland and its partners. Healy noted that the investment plan also includes spending on projects expected to come online after 2030.
The company is targeting approximately CAD 300 million in net capital-recycling proceeds toward the front end of the plan. Healy said Northland sees opportunities to achieve that over the next 18 months but declined to identify potential assets for sale or partial divestment.
Hart said new investments must meet a 12% levered after-tax return threshold. Projects with greater exposure to merchant power prices would require higher returns, while lower-risk, contracted projects could be closer to the threshold.
Northland had approximately CAD 800 million in available liquidity at quarter-end, including CAD 80 million in cash and more than CAD 700 million of capacity under corporate revolving credit facilities. Hart said almost all consolidated debt is fixed-rate or hedged over the next 10 years.
About Northland Power (TSE:NPI)
Northland Power develops, constructs, and operates maintainable infrastructure assets across a range of clean and green technologies, such as wind (offshore and onshore), solar, and supplying energy through a regulated utility. Offshore wind is expected to remain the company's largest segment over the long term. Northland's growth opportunities are global and span North America, Europe, Latin America, and Asia.
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