Earnings call transcript: Northland Power Q2 2025 misses EPS forecast

Northland Power Inc. reported a challenging second quarter in 2025, with earnings per share (EPS) falling significantly short of expectations. The company posted an EPS of -$0.25, compared to a forecast of $0.1496, resulting in a negative earnings surprise of 267.11%. Revenue also missed estimates, coming in at $509.13 million against a forecast of $541.78 million, marking a 6.03% shortfall. Following the earnings release, Northland Power’s stock dropped 6.33%, reflecting investor disappointment. According to InvestingPro data, the company maintains a solid financial foundation with a healthy free cash flow yield of 14% and an impressive 28-year track record of consistent dividend payments.

Key Takeaways

• Northland Power’s Q2 2025 EPS and revenue fell short of analyst expectations.
• Stock declined 6.33% in response to the earnings miss.
• Offshore wind challenges and curtailments in Germany impacted financial results.
• The Oneida Battery Storage Project contributed positively to performance.
• Guidance for full-year adjusted EBITDA was revised downward.

Company Performance

Northland Power faced notable challenges in Q2 2025, primarily due to lower offshore wind resources in the North Sea and increased curtailments at its German facilities. These factors led to a net loss of $53 million, a stark contrast to the net income of $246 million reported in Q2 2024. Despite these setbacks, the company’s diversification strategy showed promise, with new projects like the Oneida Battery Storage contributing positively.

Financial Highlights

• Revenue: $509.13 million, down from the forecast of $541.78 million.
• Earnings per share: -$0.25, significantly below the forecast of $0.1496.
• Adjusted EBITDA: $245 million, a 9% decrease year-over-year.
• Free Cash Flow: $58 million, 15% lower than the previous year.

Earnings vs. Forecast

Northland Power’s actual EPS of -$0.25 was significantly below the forecasted $0.1496, resulting in a negative surprise of 267.11%. This marked a substantial deviation from expectations, with revenue also underperforming by 6.03%.

Market Reaction

Following the disappointing earnings report, Northland Power’s stock fell by 6.33%, closing at $20.73. This decline positions the stock closer to its 52-week low of $16.14, reflecting investor concerns over the company’s short-term prospects. Despite recent volatility, InvestingPro analysis shows the stock historically trades with low volatility (Beta: 0.52) and currently offers a substantial 5.42% dividend yield. Analysts maintain optimism with a consensus "Buy" rating and an average price target suggesting 32% upside potential.

Outlook & Guidance

Northland Power revised its full-year adjusted EBITDA guidance downward to a range of $1.2 billion to $1.3 billion, from the previous range of $1.3 billion to $1.4 billion. The company remains optimistic about its long-term strategy, focusing on expanding its presence in Europe and exploring new opportunities in battery storage and onshore renewables. InvestingPro metrics reveal strong fundamentals with a 70.5% gross profit margin and robust financial health scores, particularly in cash flow management. For deeper insights into Northland Power’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

Executive Commentary

CEO Christine Healy emphasized the company’s commitment to its long-term value proposition, stating, "2025 continues to be a year of key milestones for Northland, and our long-term value proposition is strong." She also highlighted global trends, noting, "We’re at a unique moment in time where we see many governments around the world poised to make investments with respect to focus areas of grid security, reliability, interconnection."

Risks and Challenges

• Offshore wind resource variability and curtailments in Germany.
• Supply chain pressures impacting project timelines.
• Potential regulatory changes in key markets.
• Currency fluctuations affecting international operations.
• Competition in the renewable energy sector.

Q&A

During the earnings call, analysts questioned the impact of supply chain pressures and the company’s strategy for potential mergers and acquisitions. Management highlighted the strong performance of the Oneida Battery and ongoing discussions with the Canadian government on offshore wind initiatives.

Full transcript - Northland Power Inc. (NPI) Q2 2025:

Conference Moderator: Welcome to the Northland Power Conference Call to discuss the Second Quarter twenty twenty five Results. As a reminder, this conference is being recorded on Thursday, 08/14/2025 at 10AM Eastern. Conducting this call for Northland Power are Christine Healy, President and CEO Jeff Hart, Chief Financial Officer and Adam Beaumont, Senior Vice President of Capital Markets. 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.

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.northlandtower.com. I will now turn the call over to Ms. Christine Healy.

Christine Healy, President and CEO, Northland Power: Thanks, Didi. Good morning, everyone, and thank you for joining us today. I’ll begin with a business update that will include some key construction milestones and development progress. I’m going to turn it over to Jeff to walk us through then our financial results. Following our remarks, we’ll open the line for questions.

So I’ll start with a moment on health and safety, which as you know is of the highest importance at Northland. And I’ve been doing site visits at our locations around the world where I continue to observe firsthand our team’s strong safety commitment, and that’s across all of our project sites and our operating facilities. But I did wanna take a moment to tell you about something a little bit special that happened recently when our utility, EBSA, hosted the sixteenth annual Colombian Electrical Rodeo. So the Electrical Rodeo is an initiative that was started by EBSA in Columbia where multiple companies come together and line worker teams compete at the national level. So this initiative showcases and rewards safe work practices in the field and elevates those safe practices to make sure that we’re sharing the information across the industry.

I’m pleased to advise that not only did we host this year’s event, but we also took first place. So EBSA showcased the company’s technical excellence and strong safety culture. So very proud of the work that the team has done there. So to start the quarter, quick update on construction. I know it’s, top of mind for many of you, but the first of our three major construction projects was completed ahead of schedule and under budget.

The 250 megawatt Oneida battery storage project in Ontario became Canada’s largest operating storage facility and one of the largest in the world. I’m pleased to say Oneida has performed well in its first month. It’s delivered capacity and, capturing market revenue upside as a first mover in the grid. The grid operator has praised Oneida’s rapid response during recent high demand periods. For any of you who are living in the Toronto area, you know we’ve had some quite hot weather and heat waves, and Oneida was pressed into service and responded very well.

So during those high demand periods, Oneida reinforced grid reliability and, I think was certainly a benefit in the system. So learnings from Oneida now are being applied on our 80 megawatt Jurassic battery storage project in Alberta. That project secured financing and began construction with the installation of the foundations for the battery packs and we are preparing for key electrical equipment deliveries in the coming months. That project, Jurassic is expected to be completed by the 2026. So I will turn then to our other two major construction projects, Hai Long and Baltic Power.

And it’s worth reminding you that together these projects will add 2.1 gigawatts of gross capacity and they will expand our offshore wind portfolio to five projects. More importantly, we’ll diversify our exposure beyond the North Sea for wind conditions. So let’s start with Hailong. In the quarter, Hailong, which is our one gigawatt offshore wind project in Taiwan, that project achieved first power. This is a major milestone because it confirms successful grid connection and turbine commissioning.

We also completed installation of all of the pin piles. This is a very important step in terms of derisking our interface with the seabed and derisking the rest of the construction process. So the completed installation of those 10 piles is an important milestone for the project as well. In addition, the team has worked hard to install 72 out of 73 jacket foundations as of today, and the last jacket foundation should be installed in the coming days. So overall, Hailong remains on track for full commercial operations by 2027.

So then we turn then to Baltic Power, our 1.1 gigawatt project in Poland. In the quarter, Baltic Power installed its first turbine, and that’s an important milestone in the construction progress. You will recall that first power on that project will follow grid interconnection, which is expected in 2026, and that’s in line with our construction schedule. Offshore construction progress has included installation of both offshore substation main foundations, mechanical completion of the topside structure with electrical outfitting underway, and installation of 38 monopile foundations and two substation monopiles in the water. So overall, Baltic Power remains on track for full commercial operations in the 2026.

In addition to our construction program, we’re advancing our development pipeline. We continue to identify and pursue new opportunities in our core markets of Canada and Europe, aligning with our investment criteria and projects that offer strong value creation for shareholders. So I’ll say a few notes on that because we’re focusing more time and attention on our home market of Canada lately where we do see some near term opportunities to leverage our existing platform and our strong domestic brand. And we see those opportunities in storage, onshore renewables and gas power generation. During the quarter, we’ve advanced several development projects in Canada.

As an example, we are actively evaluating opportunities for Ontario’s LT2 process And these are opportunities within our gas power generation and onshore renewables groups. And we see our ability to deploy multi technologies brings a strong capability to the process because we can adapt to what the system operator is looking for. As part of our continuous process and focus on projects with best risk adjusted returns, we’ve been looking at those Ontario opportunities and we’ve decided to high grade those opportunities and focus on the projects we see having the highest probability of success. And we’ll continue to monitor the procurement details to make sure that we’re targeting the right risk reward balance. Some of the projects that are being deprioritized for LT two will still remain in the pipeline because they can be contenders in future years.

We’re also sharpening our focus in Europe where we see positive momentum around, grid build outs and industrial resilience, and that creates opportunities for Northland. As an example, we’re looking at several onshore power and battery storage opportunities in Europe, and we see that there’s space here for Northland to deploy our strong project execution and operational expertise and drive value for shareholders. So we’ve also been working on our international project pipeline and assessing where and when we want to allocate capital. In offshore wind, a permit came due in one of our South Korean projects. And having looked very carefully at that opportunity, we chose not to renew the permit.

Given evolving regulatory framework and the uncertainty around development terms in that jurisdiction, we decided this was the right step for Northland. So this decision, I think, is a positive example of our efforts to focus our development work on our markets that we know and understand where we have lower early stage risk. So we do see that there are ample opportunities and we’re evaluating opportunities in high potential regions of Europe, particularly Central Europe, where we see positive policy support for offshore wind and financial structures that support the way Northland does business. So that’s just an example of the type of strategic decision we’re taking to ensure we’re focused on the right opportunities, the ones that will deliver long term value to shareholders. And I look forward to sharing more with you about that later this year at our Investor Day.

Before I turn it over to Jeff to walk through the financials, I did want to provide a brief overview of our second quarter performance. As you’ve seen, low offshore wind resources in the North Sea persisted into the second quarter and have continued the trend from Q1. We view this as natural variability, especially when you compare it to the record high output we had in some of our assets in 2024. So unfortunately, our offshore assets in the North Sea have had the lowest wind half year since we started production ten years ago. Our global operations, however, remain strong.

And as I talked to you last quarter, the thing for me to that I always ask the teams to focus on is the things within our control. We had solid performance in in terms of reliability, and we had excellent performance in our onshore and natural gas business. You can see overall fleet availability exceeded 95% in the quarter. Our wind park availability improved in Q2 and that’s a testament to the effectiveness of our asset management teams and our proactive asset management strategy. Our teams are continuing to implement predictive maintenance approaches, and we apply learnings from past events to reduce our downtime.

Maintaining our assets in optimal condition positions us well to capitalize when favorable wind conditions occur. So as a final note, I’ll say our global offshore wind diversification strategy is advancing. And one of the things we talked about last quarter, and I’ll repeat again, that when Baltic Power and Hai Long come online soon, this will change the profile of the wind resource for the company. So expanding into the Baltic Sea and the Taiwan Strait balances our production profile across geographies. So 2025 continues to be a year of key milestones for Northland, and our long term value proposition is strong.

Our dedicated teams are bringing deep expertise across the full project life cycle from origination through development, construction, and operations. Strong market fundamentals throughout highlight that the global demand for sustainable, affordable, secure power continues to rise, and Northland is well positioned to capture this momentum. So with that, I’m gonna turn it over to Jeff for a detailed update on the

Jeff Hart, Chief Financial Officer, Northland Power: financial results. Thanks, Christine, and good morning, everyone. This quarter we achieved a number of key construction milestones, continued to maintain strong operations with commercial availability of 95% and completed planned maintenance outages. Looking at our second quarter results, Northland generated adjusted EBITDA of $245,000,000 a 9% decrease compared to the same quarter of 2024. This was predominantly due to the low offshore wind resource and higher on paid curtailments related to negative prices at our German offshore wind facilities.

The low offshore wind resource was partly offset by the contribution from the Oneida Battery facility, which achieved commercial operations this quarter, and good wind conditions across our North American onshore wind fleet. During the second quarter, we generated free cash flow of $58,000,000 which was approximately 15% lower than the same quarter last year. And on a per share basis, free cash flow in the second quarter of this year was $0.22 compared to $07 in the 2024. The decrease to free cash flow was primarily related to the lower adjusted EBITDA that I mentioned earlier. That was offset by a decrease in income taxes due to that lower EBITDA and a one time tax benefit following the German Federal Fiscal Court’s recently released ruling for offshore wind farms.

The net loss for the quarter was $53,000,000 compared to net income of $246,000,000 in 2024, and this is primarily due to the lower operating income and non cash mark to market losses on foreign currency hedges. Turning to our investment program at Hai Long and Baltic Power, as of the end of the 2025, we spent $9,000,000,000 to date with remaining gross capital expenditures for the two projects expected to be $6,000,000,000 And at Hai Long, we have started to see the first pre completion revenues, and at Baltic, we continue to advance to first power in 2026 when grid connection is planned. Now I’ll turn to our updated guidance, which is primarily a result of lower offshore wind resource year to date and Debut having a schedule a grid outage in the third quarter. We have adjusted our full year forecast for adjusted EBITDA to be in the range of $1,200,000,000 to $1,300,000,000 compared to the previous guidance of $1,300,000,000 to $1,400,000,000 We also revised free cash flow, which is now projected to be between $1.15 and $1.35 per share, and that compares to $1.3 to $1.5 per share in previous guidance. And I’ll hand it back to Christine to conclude the call.

Christine Healy, President and CEO, Northland Power: Thanks, Jeff. I’m excited about Northland’s future. The progress on the projects is very strong. The operational performance is very strong. We have a good set of assets, and we’re delivering within those assets.

I will zoom out for a moment and say we’re at a unique moment in time where we see many governments around the world poised to make investments with respect to focus areas of grid security, reliability, interconnection. We see financial institutions committed to this process. And with that strong drive from industry and government, we just see that there’s a great set of conditions to invest in and deliver clean, reliable, affordable, secure energy. Before we turn to the Q and A, I can announce that our twenty twenty five Investor Day event will be on Thursday, November 20 here in Toronto, Ontario. More details will follow.

I hope you join us there. Our team looks forward to connecting with you at the event and sharing more about our future plans. So this concludes our prepared remarks. So I’ll turn it over to the operator. And operator, if you can open the line for questions, that would be great.

Thank you.

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

Sean Steuart, Analyst, TD Cowen: Thank you. Good morning, everyone. Christine, you referenced some of the turnover in the prospective growth pipeline and you gave details on Korea. On the onshore renewables and storage piece of it, that dropped by a gigawatt versus what was shown at the end of Q1. And I guess some of that is Ontario projects.

Can you give a little bit more detail on what was dropped off that growth pipeline list?

Christine Healy, President and CEO, Northland Power: Sure. Thanks for the question, Sean. So for onshore, there’s sort of a mixed bag of things. Yes, there’s a couple of opportunities we have been looking at in Ontario, but now that we understand the terms for the procurement by the ISO, we’re not so convinced that those are the right sites that are going to bring to that if we were to bid them, I don’t think they’d be bringing value to the process. So we’ve just decided to high grade on those and not spend more money chasing those right now.

It’s not to say those ideas go away, but they weren’t the right idea for this time. So we’ve taken them out of the pipeline because we’re not actively pursuing them at this point. And there was a we similarly had a couple of well, one opportunity in Alberta that we decided that now with the new information we have on the REM in Alberta, that opportunity is not going to be as good as we had hoped. And again, it’s just getting the teams to refocus on the things that we think are going to drive the most value. And then, we also have one opportunity in New York State that, just given some of the changing conditions in New York right now, we’ve decided that that’s not something that we’re interested in continuing to pursue.

Sean Steuart, Analyst, TD Cowen: Okay, thanks for that detail. Question for Jeff, the Q2 free cash flow included about $16,000,000 in a maintenance reserve positive this quarter. Should we think of that as a one off? How does that variability for that line item trend through the second half of the year?

Jeff Hart, Chief Financial Officer, Northland Power: Yeah, no, I think that’s a fair way to look at it is more of a one off and not something structural. For us, it’s just optimizing and utilizing our resources or our financial resources efficiently, so there’s nothing to read through there and I wouldn’t be continually forecasting that.

Sean Steuart, Analyst, TD Cowen: Okay. All right. That’s all I have for now. I’ll get back in the queue. Thank you.

Conference Moderator: Thanks. Thank you. And our next question comes from Nelson Ng of RBC Capital Markets. Your line is open.

Nelson Ng, Analyst, RBC Capital Markets: Great. Thanks and good morning everyone. My first question just relates to the curtailment in Germany. Can you just talk a bit about what you expect over the next few years in terms of curtailments? Like should like does it get worse before it gets better?

Like, know I think this particular quarter, there was a lot of solar on the grid, and there was a lot of negative pricing. But can you just provide a bit of color on what what you’re expecting?

Christine Healy, President and CEO, Northland Power: Hi, Nelson. Thanks very much for the question. And I would say right now, we’re actually doing a bit of a deep dive on exactly that question ourselves to understand where we think it’s going. We’ve been having a number of meetings in Germany, both with other companies who are in our sector and feeding into the grid, but also with some officials as well to understand what’s happening there. Overall, we do see that there’s sort of variability, and we expect that there’s gonna be variability in that.

We make you know, when we budget, we budget for a certain amount of curtailment that’s gonna happen within the system. Think so right now, everything is sort of sitting within that band from our perspective. There’s nothing unexpected. But I guess, you know, do we see that that’s changing as we have new entrants coming onto the grid? Right now, I would say no.

I don’t see a big shift, but we’re keeping a a watch on it because it’s important to understand our markets that we’re feeding into.

Nelson Ng, Analyst, RBC Capital Markets: Okay. Thanks. And then just a follow-up on more specifically. Like, when I look at Nordsee one, I think about nineteen percent of the production was curtailed in the first half of this year compared to, I think, 9% for Deutsche Buch. So I think those two facilities are pretty close together.

Can you just provide a bit of color as to why one’s being impacted more than the other?

Christine Healy, President and CEO, Northland Power: So, Nelson, I’m gonna have to admit that I don’t have a reason for why they’re dramatically different from each other, but I will certainly ask the teams. How about that?

Nelson Ng, Analyst, RBC Capital Markets: That sounds great. And then just sticking with

Jeff Hart, Chief Financial Officer, Northland Power: Milton, we’ll come back to you on that one as well.

Nelson Ng, Analyst, RBC Capital Markets: Sure thing. Yeah. And then just sticking to Germany, the the German trade tax refund of about 31,000,000. Can you just provide a bit more color there? Is that like a one time item, whether you expect to see any more going forward?

Jeff Hart, Chief Financial Officer, Northland Power: Yes, certainly. Yes, it is absolutely. And thanks for the question. It is one time. The way to broadly think about it is the reality of this kind of differences in provincial rates and the allocation, and so ultimately there was a ruling on how our income or how income in offshore wind would be attributed, and that ruling actually resulted in income from the offshore wind being attributed to a lower effective tax rate, and so this is really to reflect that benefit historically, we were paying a higher tax rate.

And with that ruling, we reassessed and actually pushed the effective rate down. And so it’s a one time kind of clean up for the history there. So kind of viewed as differences between provincial rates for lack of a better term.

Nelson Ng, Analyst, RBC Capital Markets: It’s like a one time true up for past 100%. 100%.

Mark Jarvi, Analyst, CIBC: Okay.

Jeff Hart, Chief Financial Officer, Northland Power: Got 100%.

Nelson Ng, Analyst, RBC Capital Markets: And then just one last question. Christine, you provided you provided good color on progress at at Hailong and Baltic. But can you just give an update on how many turbines have been installed for each project to date?

Christine Healy, President and CEO, Northland Power: If you have some So at Hailong, we’ve got 20 turbines installed. And I think I mentioned in my comments, 72 out of 73 jackets with hopefully the last one in the coming days. And then at Baltic, you’ll recall we have a monopile foundation, so we’ve got 40 monopiles out of 76 installed and five turbines.

Nelson Ng, Analyst, RBC Capital Markets: Okay. Five turbines. Great. Thank you very much. I’ll leave it there.

Christine Healy, President and CEO, Northland Power: Thank you.

Conference Moderator: Thank you. And our next question comes from Mark Jarvi of CIBC. Your line is open.

Mark Jarvi, Analyst, CIBC: Thanks. Good morning, everyone. Christine, you mentioned exploring some opportunities in Europe, batteries, onshore renewables, and that showed up in the development, prospective development pipeline. Can you share any more details in terms of where you’re looking? Is that solely a Northland effort?

Is it a partnership? How far off are these opportunities?

Christine Healy, President and CEO, Northland Power: So Mark, I’m not gonna offer more color on that right now, but hopefully by Investor Day I’ll be able to shape that out a bit more just because we’re in active conversation about some of these opportunities. And so but we do see in the markets where we already are in Europe, we see some opportunities around storage and around generation. So then which of these are gonna make it to the front of the queue and on which timeline is a bit of an internal debate right now because we wanna make sure that we’re putting the highest value projects first. And in parallel with that, you’ll recall I talked not sure, actually, if we talked about it in the last call. We’ll talk about it more at investor day, but we’re also looking at what I call brownfield opportunities, which are opportunities within our own fleet where we can deploy storage in our existing fleet, and we see that there’s an uplift in value from that.

So we have to look at these opportunities next to each other and prioritize the highest value ones first.

Mark Jarvi, Analyst, CIBC: Can you share whether or not these potential projects in Europe have been things that have been percolating and now I just feel like they’re getting to a stage where you can start to talk about them? Or are they things that have kind of popped up or you’ve identified more in the last couple quarters?

Christine Healy, President and CEO, Northland Power: I would say that certainly since I arrived, we’ve been focusing on some of our key geographies. And this is the work that I’ve been doing with the team to really take our development focus and zoom in on the markets that we know well. So the markets that we’re already active in, the markets that we’ve done a lot of work to understand. And instead of having a broad lens and looking at every possible jurisdiction, we’re really focusing in on the places where we think we can drive better value.

Mark Jarvi, Analyst, CIBC: Understood. And then you made the comment about opportunities in offshore wind. You said the word, I think, used Central Europe. Is that Poland or does that go beyond Poland? And then maybe just update a view in terms of how you think PK and Orland is is gonna progress

Are they gonna bid and then select a partner, or are you having some discussions with them as they bid potentially their next sites into the RFP?

Christine Healy, President and CEO, Northland Power: So certainly with Central Europe, Poland is one of the Central European countries and we’re already in Poland. We certainly, obviously we like Poland or we wouldn’t be there making the investment that we are. So it’s Poland, but also I would say areas adjacent. I think the entire region has many of the same goals in terms of energy. So for us, it’s we look at the region, I would say, and being able to deploy within the region.

The process that’s happening in Poland, we have a very strong partnership with Orland and so we’re working with them. They are publicly owned, they’re a state owned entity, so they will go through a process as they select their future partners. We certainly hope that they will consider us in a favorable way when they’re looking at future partners. But the processes in Poland will go through the normal process. We evaluate what’s the best way for us to enter, whether it’s as a bidder or whether it’s as an acquirer in a post bid process.

So either way, we’re sort of neutral. We look at the way that’s going to get us into the projects that we like the best.

Mark Jarvi, Analyst, CIBC: Okay. And then any update on Nordsee in terms of post PPA? What if you’re active in the market looking to do corporate PPA, or is it gonna be more of a longer term hedge with a trading partner?

Christine Healy, President and CEO, Northland Power: Yeah. So it’s a really good question. Thanks for asking it. We’ve been exploring the potential for long term PPAs, and it’s very interesting discussions and we’re looking at that. And then we do have a decision to make, I would say, the coming couple of months.

And I wouldn’t be surprised if we actually split it a little bit. And we might do a PPA on part, and we might do a bit more, keep an open position on part. So I’m looking at that in terms of the overall portfolio and what kind of volatility exposure we’re okay with. We don’t have to make the decision right away because really we continue to be, you know, we don’t have a lot free on that until 2027. But I’m glad we started early because it means we can have a good look at what the market is offering.

So right now, it’s a little bit dealer’s choice and we’re the dealer. So I like that. But we certainly see some interesting long term contracting opportunities. The question is, is that how we want to structure that asset or not for the future? And that’s still, to be determined.

Mark Jarvi, Analyst, CIBC: And is it likely you’ll make a decision by year end?

Christine Healy, President and CEO, Northland Power: Certainly. Yes, we will be making a decision by year end.

Mark Jarvi, Analyst, CIBC: Got it. Okay. Thanks for the time today.

Conference Moderator: Thank you. And our next question comes from Robert Hope of Scotiabank. Your line is open.

Robert Hope, Analyst, Scotiabank: Good morning, everyone. On the Q1 call, you spoke about M and A a couple of times. Can you maybe walk us through how your thinking has been evolving on that front whether or not you think you can pick up some, we’ll call some gas assets in Canada or other kind of we’ll call it modalities and geographies?

Christine Healy, President and CEO, Northland Power: So thanks for the question. We are very active in terms of screening M and A opportunities and we’ve actually taken a deeper dive into, I would say a strong handful of opportunities. One of the things that I’m really impressed with actually is that our operational teams when they dive into these are really able to see through and see the value. And so there’s been a couple of things that I was excited about, but we’ve decided to not proceed with. And that’s I think sometimes the deals you don’t do are better than the deals that you do do.

So I’m okay with that outcome. We do see that there’s quite a lot of interesting things coming on the market or available in the market. So I’m very positive about M and A for the future, but I’m very impressed with the team’s ability to look through and understand the value of what we’re seeking to acquire. So for me, I’m happy to see the muscle in the team and I expect that we will be transacting, but we will be transacting when we find the right match, not transacting on any match.

Robert Hope, Analyst, Scotiabank: Great. And then maybe turning the attention to Eastern Canada, the federal government is speaking quite favorably about offshore wind there. Are you able to interface with the federal government to help shape that process to make a made in Canada solution?

Christine Healy, President and CEO, Northland Power: Yeah, so I mean, wind, think is a, we obviously like offshore wind a lot and we think it’s an important part of the energy mix for the future in many geographies around the world. The federal government in Canada certainly seems to be more interested in offshore winds than we’ve seen in recent years And we have had meetings with government officials in order to talk about the types of things we need to see as an investor. And as I think we’re a very credible investor in offshore wind that we’re delivering on some important projects globally. So I’m hoping that they hear what we have to say. And the reality is that it’s the same story everywhere.

We need to have certainty on terms and we need to have efficient permitting processes. That when permitting takes a long time or has an uncertain process or it costs a lot of money in order to get to an investment decision, that’s less attractive than jurisdictions where you can do that faster, more efficiently and cheaper. So I don’t think that I’m saying anything deeply insightful there. But when we have long and uncertain permitting times, it’s a disincentive for investment. So I hope that’s being understood.

And then the goal is to compete and it’s international capital. So even for Northland, we’re deploying our capital internationally for offshore wind because we see that those are the best opportunities for us. So if Canada wants to be competitive in that space, I think that would be a great thing.

Mark Jarvi, Analyst, CIBC: Thank you.

Conference Moderator: Thank you. And our next question comes from Baltas Sidhu of National Bank of Canada. Your line is open.

Baltas Sidhu, Analyst, National Bank of Canada: Good morning. Christine, have you seen any incremental supply chain pressures during Q2 to now? And then technologies or regions that could be more problematic in that view?

Christine Healy, President and CEO, Northland Power: So thanks for the question. I think it’s actually been a bit of a mixed bag because you see that there have been some projects that seem to be delayed or paused. You see other parts of the world where they’re trying to accelerate. So I would say supply chain, I don’t know that it’s actually just one answer. So I would say overall, we don’t see a big change from last quarter.

We see that for the projects that we’re pursuing, there’s no impact on timelines as we frame them right now. But we are keeping a careful eye on that and we’re frequently meeting with some of our key suppliers to make sure we understand that and that, you know, are the things that we don’t see that could be happening that would impact our proposed project timelines. So we do keep a watchful eye on it, but I would say no major change from last quarter.

Baltas Sidhu, Analyst, National Bank of Canada: Great. And then just on the NIDA, we got a we got the first quarter or or partial contribution of its performance. And on revenue basis, it looks like it exceeded expectations. Could you provide any details of of that project in terms of how much that was merchant revenues versus capacity? And I think the split that we that we had seen was sixty forty for for capacity.

Jeff Hart, Chief Financial Officer, Northland Power: Yeah, it’s Jeff here. Yeah, you’re right. What I laid out is sixtyforty. Obviously, being an early mover and you look and Christina alluded to it in her prepared remarks, we do see upfront some potential upside with the market being really the first in place there. What I’ll say is the economic case when we laid out was around $40,000,000 EBITDA.

I think we’re within that range annually, and I think we do see some upside on the merchant side here being an early mover, but it’s something that it’s early stage. We’re going to be prudent on how we’re out looking and just see how it performs and how the grid operator utilizes it as well. So we’ll continue to see some benefits there, but no change to that $40,000,000 EBITDA and we’ll see what upside we can capture here over the next few months.

Christine Healy, President and CEO, Northland Power: Maybe I’ll just add on to that to say, yes, it’s a bit too soon to say anything other than we see some positive green shoots and then understanding how that works together. We’re in a new system in Ontario, so it’s new for us and it’s new for the system operators. So we’re cautiously optimistic.

Baltas Sidhu, Analyst, National Bank of Canada: Sounds great. And then just one last one for me. For Hai Long, how many more turbines would you expect to place before for before winter break? And just as an extension, do you have any further insight if you look to release any of the excess vessel capacity and what this could present in terms of upside for Northview?

Christine Healy, President and CEO, Northland Power: Sorry. Can I get you to repeat the I heard the first part of the question, but not the back part of the question? So can I just get you to repeat that?

Baltas Sidhu, Analyst, National Bank of Canada: Yeah. You bet. So the first part was just, how many more turbines would you expect to to have in place by by winter break? And if you have any further insight if you’ll be looking to release any of the excess vessel capacity and what that could mean in terms of upside for for Northland.

Christine Healy, President and CEO, Northland Power: Okay. Oh, sorry. Okay. I I couldn’t hear any of that, but now now I got it. Okay.

So, I would say in terms of installation at Hai Long, a big focus right now is on, array cables and installation of array cables. So that’s something that we really need column seeds in order to do that. And every day that we can get that done is a day closer to completion. So for me, it’s right now, it’s it’s less about the turbines and more about the array cables. Of course, we’re we’re moving in parallel on that.

But, you know, the array cables the weather window is important. I mean, you may be aware, Baltaj, that we had a typhoon much earlier this year than we’ve seen in previous years. So, typhoon season would be much later. So we’re, you know, right now, day that we get in the good weather window, we’re taking full advantage of. So the team is active.

I think it would be a bit too soon for us to say what we’re doing with vessel capacity. We’re we wanna maintain our project schedule, and we wanna make sure that everybody stays safe.

Baltas Sidhu, Analyst, National Bank of Canada: Great. That’s all for me. Thank you.

Conference Moderator: Thank you. That concludes our question and answer session. I’d like to turn it back to Christine Healy for closing remarks.

Christine Healy, President and CEO, Northland Power: Well, you everyone for joining us today. We’ll hold our next earnings call after the release of third quarter results in November. I want to thank you all for your excellent questions and for your continued support. Thanks very much.

Conference Moderator: This concludes today’s conference call. Thank you for participating and you may now disconnect.

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