Northland Power turns to loss in Q2, adjusts forecast

Installation of the first Gemini wind turbine. Author: Northland Power Inc. License: All Rights Reserved.

August 12 (Renewables Now) - Northland Power Inc’s (TSE:NPI) overall financial performance in the second quarter of 2021 has been weaker compared to a year earlier and the company today reported a net loss for the period.

The Canadian energy company posted a quarterly net loss of CAD 6.4 million (USD 5.1m/EUR 4.4m). Sales fell 5% and adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 10%.

The bottom line result was hit by a foreign exchange loss of CAD 46 million along with a fair value loss on derivative contracts of CAD 25 million versus a CAD-30-million gain a year back.

“Our second quarter financial performance was impacted by a lower wind resource in the North Sea, which was trending below the long-term average,” commented Mike Crawley, president and CEO of the company. He added, though, that near-term financial impacts do not affect Northland’s long-term goals and performance.

The table below gives more information about the company’s Q2 financial performance.

Figures in CAD Q2 2021 Q2 2020 H1 2021 H1 2020
Sales 408m 429m 1.02bn 1.1bn
Adj. EBITDA 203m 227m 562.7m 647.3m
Free cash flow 0.03 0.09 0.66 1.17
Adj. free cash flow 0.10 0.19 0.80 1.34
Net profit (loss) (6m) 74m 145m 349.3m

The decline in adjusted EBITDA reflects a CAD-17-million decrease in operating results at the Gemini offshore wind park, primarily due to the lower wind resource and APX hedge losses realised; and weaker performance from the efficient natural gas and onshore facilities, largely because of a planned major outage at North Battleford and a lower wind and solar resource.

At 683 GWh, offshore wind electricity production was 4% lower than the same quarter of 2020, mainly because of an unusually low wind resource at all three plants -- Gemini, Nordsee One and Deutsche Bucht.

Northland also updated its financial guidance for the full 2021, saying it now expects adjusted EBITDA and free cash flow per share to be at the low end of the February forecast ranges of CAD 1.1 billion-1.2 billion and CAD 1.30-1.50, respectively. It now sees its adjusted free cash flow per share at CAD 1.60-1.70 rather than CAD 1.80-2.00.

The company explained the adjustment to its forecast with the fact that offshore wind performance has been below the long-term average in the first half of the year and with the projections for reduced turbine availability at Nordsee One due to component replacement.

(CAD 1.0 = USD 0.799/EUR 0.681)

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