Northland Power turns to Q3 loss amid abnormally weak winds

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

November 11 (Renewables Now) - Northland Power Inc (TSE:NPI) swung to a third-quarter net loss of CAD 4.7 million (USD 3.8m/EUR 3.3m) and its EBITDA and revenues suffered from the “abnormally low” winds in the North Sea.

The company, which owns or has economic interests in 3.2 GW of operational power plants, or 2.8 GW net, said on Wednesday that the unfavourable wind conditions dented the contribution from three offshore wind parks in the North Sea -- Gemini, Nordsee One and Deutsche Bucht. Nevertheless, it reiterated its full-year forecast, expecting to meet its low end thanks to the performance of onshore wind and solar assets.

Northland Power recorded adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of CAD 210.7 million in the third quarter, experiencing a 17% year-on-year drop. The decrease came after EBITDA from offshore wind activities contracted by 31% to CAD 104 million. With contracted power production, the segment was hit by a 23% fall in sales and brought only CAD 197 million to Northland Power’s top line of CAD 432 million.

The Canadian firm’s onshore renewable energy assets closed the three months with sales of CAD 74 million and adjusted EBITDA of CAD 53 million, both rising in annual terms.

More details about Northland’s Power financial performance are available in the table below.

Amounts in CAD Q3 2021 Q3 2020 9mo 2021 9mo 2020
Sales 432.1m 470.9m 1.45bn 1.57bn
Gross profit 383.4m 418.4m 1.3bn 1.42bn
Adjusted EBITDA 210.7m 254.3m 773.4m 901.6m
Net profit (loss) (4.67m) 109m 140.4m 458.3m
Free cash flow 11.1m 60.6m 151.1m 289.5m
- per basic share in CAD 0.05 0.30 0.70 1.46
Adjusted free cash flow per share 0.15 0.38 0.94 1.71

Northland Power pointed out that the lower adjusted EBITDA reflects a CAD-37-million drop in the operating results at the Gemini offshore wind park, mainly due to the lower wind resource and APX hedge losses realised, as well as a CAD-10-million decrease in the operating results at Nordsee One. At the same time, corporate costs rose by CAD 15 million amid the higher level of project development. The overall decline was partly offset by EBITDA added following the acquisition of a wind and solar portfolio in Spain in August.

At 734 GWh, electricity production from offshore wind farms declined by 13% on the year, whereas the output of onshore renewable energy facilities improved by 23% as 66 GWh more power was produced thanks to the newly-acquired Spanish plants.

Northland Power still expects to post adjusted EBITDA of CAD 1.1 billion-1.2 billion and free cash flow per share of CAD 1.30-1.50 for the full year. Adjusted free cash flow per share is still seen to be within the CAD 1.60-1.70 range.

(CAD 1.0 = USD 0.799/EUR 0.696)

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Veselina Petrova is one of Renewables Now's most experienced green energy writers. For several years she has been keeping track of game-changing events both large and small projects and across the globe.

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