Northland Power Inc. will continue as an independent public company and "a leader in the international clean energy infrastructure sector," following the completion of a strategic review of its business, CEO John Brace said Aug. 10.
Speaking on the Toronto-headquartered company's second-quarter 2017 earnings conference call Aug. 10, Brace said Northland Power's board of directors and management determined that this was "the best path" forward for the company and its shareholders. "We believe that the company now has a stronger platform than when the strategic review was launched," Brace maintained.
Northland Power achieved strong operational and financial results and is proving successful in its offshore wind investments, according to Brace. Over the last year, the company completed two wind projects ahead of schedule and under budget; the 100-MW Grand Bend Wind Farm in Ontario and the 600-MW Gemini wind project off the coast of the Netherlands in the North Sea.
A long-term enhanced dispatch contract for the company's 120-MW Iroquois Falls cogeneration facility in Ontario, which became effective in July, will lead to a reduction in greenhouse gas emissions and cost savings for electricity consumers in Ontario and is expected to provide better economics for Northland, Brace said.
Additionally, the company continues to make significant progress on its Nordsee One offshore wind farm off of Germany, with 44 of the 54 turbines installed, Brace said. The project, which began producing power March 31, is already generating pre-completion revenues, he noted, adding that the installation should be complete by the end of 2017.
"With Gemini in full operation and Nordsee One advancing to plan, we are in a great position to move forward on another large project," he said. Northland Power intends to acquire 100% ownership of the 252-MW Deutsche Bucht, or DeBu, offshore wind farm in the German North Sea. "This acquisition clearly demonstrates Northland's success and competing for and winning the best projects in the industry," he added.
Brace said DeBu is roughly 80 kilometers from Nordsee One and is in advanced development. "We expect to reach financial close shortly with construction to begin shortly thereafter," he said, adding that the project should be finished by the end of 2019.
Northland Power reported Aug. 9 adjusted EBITDA for the second quarter of 2017 climbed 61.8% year over year to C$168.2 million, compared to C$103.9 million in the comparable quarter of 2016.
The increase was mainly due to the contribution from the Gemini wind farm and pre-completion revenues from Nordsee One combined with positive contributions from the Grand Bend, North Battleford Project and Iroquois Falls facilities.
Net income for the quarter that ended June 30 rose to C$61.7 million, compared to C$23.4 million a year ago.
Northland Power increased its 2017 adjusted EBITDA guidance to a range of C$710 million to C$750 million, up from a range of C$660 million to $710 million. The company's free cash flow per share guidance for 2017 is C$1.18 to C$1.30 per share, up from C$1.03 to C$1.18.