Northland Power (OTC:NPIFF) Inc. (NPI), a leading clean and green energy company, reported a strong start to 2024 with significant growth in financial performance, driven by enhanced wind resources and contributions from new projects. The company's first quarter adjusted EBITDA reached over $450 million, marking a 30% increase year-over-year.
Northland Power also announced a leadership transition, with CEO Mike Crawley stepping down at the end of September and John Brace taking over as Executive Chairman during the search for a new President and CEO.
The company's adjusted free cash flow per share grew to $0.88, and free cash flow per share to $0.85, reflecting increases of 25% and 41%, respectively, compared to the first quarter of last year. Additionally, Northland Power confirmed the sale of the La Lucha solar facility in Mexico, expected to close in 2024, and reiterated its 2024 financial guidance, with adjusted EBITDA forecasted to be between $1.2 billion and $1.3 billion.
Key Takeaways
- Northland Power's Q1 adjusted EBITDA soared by 30% to over $450 million.
- The company is undergoing leadership changes, with a new President and CEO to be announced.
- Adjusted free cash flow per share increased to $0.88, and free cash flow per share to $0.85.
- The sale of the La Lucha solar facility in Mexico is expected to generate $205 million in cash.
- Northland Power maintains a strong financial position with $760 million in cash and liquidity.
Company Outlook
- Northland Power reaffirmed its 2024 financial guidance, expecting adjusted EBITDA to be between $1.2 billion and $1.3 billion.
- The company is focusing on disciplined investments and capital recycling to enhance shareholder value.
Bearish Highlights
- The company experienced $21 million in revenue curtailment in Q1, with no data available for April and May.
- Northland Power is closely monitoring the power market restructuring in Alberta, which could impact their projects.
Bullish Highlights
- Strong wind conditions contributed to the company's robust financial performance in Q1 and April.
- All construction projects, including Hai Long, Baltic Power, and Oneida Battery Energy storage, are on schedule and within budget.
Misses
- There was no mention of specific challenges or misses in the earnings call summary provided.
Q&A Highlights
- The company is involved in the stakeholder process for Alberta's power market redesign and plans to contract the majority of their project outputs.
- Asset recycling is a focus, with the company aiming to achieve good value for shareholders through the full cycle economics of divestment and reinvestment.
Northland Power's first quarter of 2024 set a positive tone for the year, with the company leveraging strong wind conditions and progress in their project portfolio to deliver better-than-expected financial results. The company is poised to continue this momentum while navigating leadership changes and potential market shifts, particularly in Alberta. The next earnings call is scheduled for August, following the release of the second quarter 2024 results, where further updates on the company's performance and strategic initiatives will be provided.
InvestingPro Insights
Northland Power Inc. (NPIFF) has shown some promising signs in its financial performance, with a notable increase in adjusted EBITDA in the first quarter of 2024. InvestingPro Tips highlight several key aspects that investors might find encouraging. Firstly, the company's net income is expected to grow this year, which aligns with their strong start in 2024. Additionally, Northland Power boasts impressive gross profit margins, which stood at 73.12% for the last twelve months as of Q1 2024. This figure is a testament to the company's efficient cost management and strong pricing power.
InvestingPro Data also reveals that Northland Power has maintained a significant dividend yield of 5.1%, making it an attractive stock for income-focused investors. This is further reinforced by the company's history of maintaining dividend payments for 27 consecutive years, demonstrating a commitment to returning value to shareholders. Moreover, over the last week, the stock has seen a significant return of 9.23%, indicating a positive short-term sentiment among investors.
For those interested, there are additional InvestingPro Tips available at https://www.investing.com/pro/NPIFF, which could provide further insights into Northland Power's performance and potential investment opportunities. To access these tips, users can take advantage of a special offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With a total of 8 InvestingPro Tips listed, investors can gain a comprehensive understanding of the company's prospects and make more informed decisions.
In conclusion, Northland Power's strong start to 2024, combined with its robust gross profit margins and the prospect of net income growth, paints a positive picture for the company. The commitment to shareholder returns through dividends and the recent uptick in stock performance could be seen as favorable indicators for potential investors.
Full transcript - Northland Power PK (NPIFF) Q1 2024:
Operator: Welcome to the Northland Power Conference Call to discuss the First Quarter 2024 Results. As a reminder, this conference is being recorded on Thursday, May 16, 2024, at 10 a.m. Eastern Standard Time. Conducting this call for Northland Power, are Mike Crawley, President and Chief Executive Officer; John Brace, Executive Chair; and Adam Beaumont, Interim Chief Financial Officer; Before we begin, Northland's Management has asked me to remind listeners that all figures presented are in Canadian dollars and to caution that certainly information presented and responses to questions may contain forward-looking statements, that include assumptions and are not subject to various risks. Actual results may differ materially from management's expected or forecasted results. Please read the forward-looking statements section in this yesterday's news press release announcing Northland Power's results and be guided by its contents and making investment decisions or recommendations. The release is available at www.northlandpower.com. I will now turn the call over to Mike Crawley. Please begin sir.
Mike Crawley: Okay. Thank you very much. And thanks to everybody for joining us this morning. As always, I'd like to start by taking a moment to emphasize that the health and safety of our people is our top priority at Northland. With three construction projects now well underway, and we have now close to 50 well trained health and safety professionals working closely with our project teams, our contractors and our partners to ensure that our health and safety program is best-in-class. So now, jumping to our quarterly updates, we've had a strong start in 2024, with first quarter financial results better than expected. Our results were higher than last year, primarily due to higher wind resources across all offshore wind facilities, as well as the contribution from our New York onshore wind facilities, which began operating in October of 2023. All our operating offshore wind facilities experienced strong electricity production in the first quarter with our Deutsche Bucht offshore wind farm in Germany, achieving an all time high production level. The strong operating performance results in our first quarter adjusted EBITDA of over $450 million. It's an increase of close to 30%, or approximately $100 million compared to the same quarter of 2023. On adjusted free cash flow and free cash flow per share, they were $0.88 and $0.85 per share respectively in the quarter, compared to $0.72 and $0.62 per share respectively, during the same period the year earlier. As noted in our press release yesterday, we're reaffirming our 2024 financial guidance and outlook. Adam Beaumont will provide more details on financial information later in the call. So moving into construction updates, we continue to make good progress on our construction program for the two large offshore wind projects in Taiwan and Poland and the battery storage project in Canada. As you recall, in our Investor Day, we provided a great level of detail, on what has been done and what are some of the critical milestones for all our three construction projects. It illustrate how advanced the projects were, we gave a percentage of completion as we wanted to outline what had already been achieved as of December 31, 2023, as a baseline. Moving forward. We'll report on the status of our key milestones on each of the three projects. This will give our investors and stakeholders a very good and ongoing overview of our construction progress. With that, I'm going to start with our Hai Long project in Taiwan. This 1 gigawatt offshore wind project, which is 30.6% owned by Northland, continues to progress well. The project continues to make progress with fabrication of foundations, cables and the onshore and offshore substations well underway. Turbine component manufacturing has also commenced. Offshore construction work has continued to advance with the installation of both offshore substation jacket foundations and pin piles, which was used to anchor in the jacket foundations at multiple turbine locations. Other major components of the wind park are arriving in Taiwan, including turbine jackets at the first offshore substation topside, which is a substantial structure. Full commercial operations are expected to commence in 2026, 2027 according to the schedule. Overall cost continues to be aligned with original expectations. Once operational, Hai Long, will be one of the largest offshore wind facilities in Asia and will provide enough clean energy to power more than 1 million Taiwanese households. Standard metric used to measure output from a wind farm or renewable energy facility. And, of course, a lot of the demand -- growth and demand for energy in Taiwan is actually fueled by the technology sector there. Moving to Baltic Power. Our 1.1 gigawatt offshore wind project in Poland, which is 49% owned by Northland, on that project it is -- well Baltic Power is one of the first large scale offshore wind projects. Indeed, it's the first offshore wind project to go to construction in Poland, and it will play a key role in the country's energy transition and in the country's decarbonization program. The project continues to make progress on the fabrication of onshore and offshore substations, foundations export cables and inter array cables. Turbine manufacturing as well has commenced, and the onshore substation construction is well underway. The full commercial operations are expected to commence in the latter half of 2026, which is according to the schedule. And overall project cost continues to be aligned with the original expectations. So lastly, the Oneida Battery Energy project storage project in Ontario, which is 72% owned by Northland. This project is one of the largest battery storage projects in the world and will provide essential grid services and reliability to the Ontario electricity system. It's also important to note that this is an asset class that is expected to see lots of growth over the next decade as grids seek to balance intermittent renewables. The project continues to make progress with its construction activities. All foundations for the battery packed and transformers have been installed. All battery packs, this is important, have been delivered to site and medium voltage transformers have started to arrive as well. Full commercial operations are expected to commence in 2025, which again, is according to the schedule. Overall project cost continues to be aligned with original expectations for this project. As you can tell, we have good momentum on our construction program, but we do continue to be vigilant, disciplined and focused on these programs, to ensure that these projects come in on time, on budget and deliver the material boost in cash flow that NPI is expecting. As such, project execution for the company does remain our number one priority. Moving on to other significant first quarter events. In March, we entered into an agreement to sell 100% of the 130 megawatt La Lucha solar facility in Mexico. The sale is expected to close in 2024 on satisfaction of customary closing conditions. Now this transaction is all about rationalization of the markets that we're in, as well as recycling capital. And as we said at Investor Day recently, we remain disciplined and prudent in managing our capital and financing needs, and we have no further requirement to access equity or debt markets for additional growth, and we will continue to be highly disciplined and selective in pursuit of any new opportunities and only move forward on such opportunities that demonstrate value accretion to shareholders. Now, before I finish, as most of you are aware from our announcement, at the end of March. The Board and I came to a decision in March that Northland would undergo a well-planned leadership transition over the next several months. So as such, I will be transitioning out of my role as President and CEO effective September 30. Now, it's not goodbye quite yet, but I do want to say on this call that it has been a great honor to work with such a talented and dedicated team at Northland, over the last nine years, including six as CEO. We've all achieved a lot working together. And I'd like to thank all of our shareholders, partners, lenders and employees for their trust and support over the years. All of these projects, these investments and the strong availability that we've been able to deliver consistently from our operating facilities that involves not just the employees of Northland, but a lot of our partners and suppliers as well. As part of the transition plan. John Brace, many of you know has served as CEO of Northland from 2003 to 2018 and as Board Chair since 2019, will take on the role of Executive Chairman, until the next CEO is selected and starts. Now, I've known John for over 20 years, and I think a number of you on the call would know John well, as well. He's been a key figure in Northland's history and will provide strong leadership and guidance as Interim Executive Chair, during this transition period to act as a bridge between myself and the next President and CEO. It's almost like a relay race with me handing a baton to John and then John handing that off to the next President and CEO. All to ensure that this transition moves as smoothly as possible with no impact on the business, no impact on employees. So on that note, I'll hand things over to John.
John Brace: Thank you, Mike. And good morning, everyone. I would like to start by expressing my gratitude to Mike for his outstanding leadership and immense contribution to Northland. As the Board and I continue to attest, Mike has been instrumental in expanding our global presence, diversifying our portfolio and developing our long-term growth pipeline. As Mike mentioned, the company is in a position of strength, with growth locked in through 2027 and our major construction programs for Hai Long, Baltic Power and Oneida, well underway and all progressing according to schedule. As mentioned already, there are no changes to guidance or outlook for the year. And Northland remains extremely well placed for the future. As governments and corporations globally work towards their energy transition targets. And as Mike mentioned, through discussions between him and the Board about the future, we felt that this was the right time to initiate a leadership transition, given the strong position of the company. As we go through this transition period, I want to emphasize that we remain committed to our strategy and priorities as presented at our recent Investor Day. We will continue to focus on enhancing shareholder value and fostering strategic accretive growth and builds on Mike's many successes. We are progressing with a comprehensive global search for our new President and CEO with a top tier executive search firm actively leading these efforts. We are targeting a leader who align with our company's values, complement the exceptional talent that we have at Northland and drive shareholder value as we prefer for our next phase of growth. On behalf of the Board and everyone at Northland, I would once again like to thank Mike, for his dedication and service and wish him all the very best. Northland has a best-in-class leadership team who I've known for some time in my role as Chairman, and who I have now had the pleasure of working more closely with over the past month. Supplementing our leadership strength, we have welcomed our newest addition to the executive team earlier this week, Toby Edmonds. Toby is the new Executive Vice President of our offshore wind business unit, whose primary focus will be on the successful project execution of Hai Long and Baltic Power. Toby has an outstanding track record in offshore wind, and we are both fortunate and delighted to have him abroad. With that, I will now turn the call over to Adam, who will provide a more detailed review of our financial results.
Adam Beaumont: Thank you, John, and good morning, everyone. Before jumping into the financial details for the quarter, I would like to echo John's remarks and thank Mike for his leadership. On a personal level, his mentorship has been invaluable, and his achievements will continue to fuel Northland's future success. Turning to the quarter, we are pleased with our strong results to start the year. Strong wind resources in the North Sea was the primary driver, with our projects in Germany experiencing one of the highest wind production quarters since it begin our commercial operations. The strong winds also continued into April. As a result, our financial results were better than the same quarter last year, on all three of our key financial reporting metrics, adjusted EBITDA, adjusted free cash flow and free cash flow. We generated adjusted EBITDA for the quarter of over $450 million, representing an increase of nearly 30% compared to last year. The key factors contributing to the higher adjusted EBITDA included a $71 million increase at our offshore wind facilities, primarily due to the higher wind resources, a $10 million decrease in development expenditures partially offset by higher G&A costs. The focusing of our growth efforts on our key -- our identified key markets has enabled the reduction in development expenditures compared to the prior year. And the higher G&A relates to some one-time non-reoccurring costs. Results were higher by $9 million from the New York onshore wind facilities, which achieved commercial operations in October of last year and an $8 million increase in operating results at EBSA, primarily related to inflation, escalation, and the appreciation of the Colombian peso. The results were partially offset by $6 million lower results from our Spanish renewable portfolio. Primarily due to the lower market prices experienced across Europe as a result of the warmer winter. With respect to adjusted free cash flow and free cash flow, Northland generated approximately $226 million and $217 million, which is an increase of 25% and 41% from last year. The increase in adjusted free cash flow was primarily due to $85 million higher EBITDA from operations, net of growth expenses, which was offset by a $23 million increase in current taxes, resulting from higher results at our offshore wind projects and a $15 million decrease, primarily from foreign hedge -- foreign exchange hedge settlements realized last year. On a per share basis, these figures translated into adjusted free cash flow of $0.88, and free cash flow of $0.85 in the quarter. This compares to adjusted free cash flow of $0.72 and free cash flow of $0.62 per share last year. As Mike noted earlier, we announced the sale of the Lucha project in March. Upon closing, Northland expects to receive $205 million in cash after taxes and transaction fees. This will result in a small cash on cash gain. The proceeds are planned to be used to repay amounts drawn on our corporate credit facility and for general corporate purposes. Looking further to the balance sheet. As of today, Northland continues to be in a strong position, with access to approximately $760 million of cash and liquidity. The liquidity is comprised of funds available on our revolving facility and corporate cash on hand. As Mike and John noted, we reaffirmed our 2024 financial guidance, which is adjusted EBITDA in the range of $1.2 billion to $1.3 billion adjusted free cash flow per share of a $1.30 to a $1.50 and free cash flow per share of a $1.10 to a $1.30. Overall, it has been a good quarter, underpinned by strong results and continued progress being made on the three construction projects. I will now turn the call back over to Mike, for his concluding remarks.
Mike Crawley: Okay. Thank you, Adam. And nobody joined the call to hear a bunch of executives talk about each other. But I will say one thing about Adam, is that the company is in very good hands with Adam, as interim CEO. Nobody at Northland knows the company better than Adam, has a deeper knowledge of how the company makes money, how the company operates and is able to navigate across the company and pull people together to make things happen, and that was abundantly clear. Last year we had a lot to get done. We achieved it all. And all of us, including me, would never have been able to get that done without Adam standing with us, and that's going to be very important for the company moving forward. And Adam is also, as you would know on the call, very well connected to the market and is always a voice of the market within any discussion that we have at Northland. So we've got a very solid start to the year. Both our strategy and long-term guidance remain unchanged. We feel good about the progress on our construction program so far. As you can probably tell. And it's going to materially increase our cash flow, but we do remain very focused and vigilant on execution. Our growth is locked in for the next three years, to achieve a 7% to 10% EBITDA CAGR through 2027. And this is important because that means we don't need to tap equity markets, debt market, supply chains or originate new investment opportunities to reach our new term growth targets. We need to execute on our construction program, but we don't need to go out and find anything else new. Anything further that we may do, will be discretionary, incremental, and disciplined. And this is different than some of our other peers in this sector. We'll only pursue additional projects, as I said earlier, that are accretive to our shareholders during this period. We have an established and talented team and the progress we're making on constructing these two large and complex offshore wind projects evidences the strength of that team. We're also in the process, as I said earlier, of constructing one of North America's largest energy battery storage facilities. Our in-house talent demonstrates that we continue to have what it takes to be a leader in originating, developing, constructing and operating large and complex renewable energy projects. You'll also have seen the recent announcements from our peers related to AI and data centered growth, demand growth for power. And like our peers, we see this as a very positive trend and trajectory for the industry overall. In 2022, data centers consumed approximately 2.5% of total electricity in the U.S. Just to give you one stat. And data centers portion of this is expected to triple to 7.5% by 2030. Now, this equates to electricity consumption of about 40 million U. S. households, which is almost a third of the total nation's households in the U.S., number of households in the U.S. So, we are tracking this growing demand for power closely and we do have the talent to execute large and complex PPAs, as has already been demonstrated by the 744 megawatt corporate PPA that we entered into on the Hai Long offshore wind project, which at the time I think was one of the largest to not the largest corporate PPA in the world. We have a large and exciting pipeline of which two gigawatts is currently under construction. The world needs a lot more power generation built over the next 10 to 15-20 years. And that's exactly what we do and that's what we do at scale. We are excited about the future this brings to Northland, our shareholders and our stakeholders. This concludes our prepared remarks, and we'd now be happy to take your questions. Please open the line.
Operator: [Operator Instructions] Our first question will come from the line of Eli Rodney with National Bank Financial. Your line is now open.
Eli Rodney: Good morning, everyone, and congrats on a great quarter. Just filling in for Rupert here. On the offshore projects, Hai Long in particular. Sounds like you're making great progress and correct me if I'm wrong, but seems that work has continued through that winter buffer period, outlining the project schedule. Is there any room for upside in construction and commissioning? If you continue at the current pace there.
Mike Crawley: What we've disclosed, is that we're continuing to progress according to the schedule and that cost for the project remain in line with our expectations and I think we just leave it at that -- this point. We obviously always look for opportunities to secure projects and secure cash flow sooner than forecast. But at this point, we're just reiterating that the projects are progressing according to schedule and according to the original cost estimates.
John Brace: I would just maybe add to that. That the buffers primarily apply to offshore work, and there's lots of things that happen in factories and onshore that continue on through that period of time.
Eli Rodney: Okay. Great. And then maybe moving over to DEVEX then obviously, way down year-over-year at roughly $8 million, with the focus on the in-construction projects now, and that being the number one priority. Is that a good run rate level to assume going forward?
Adam Beaumont: I think DEVEX moves up and moves down, depending on where the business is at. So right now the business, is harvesting on some opportunities that were developed, over the last few years by converting them into projects, and into cash flow within a short period of time. So certainly for this year, we would disclose what DEVEX is, and going forward we would include that with part of our guidance for future years.
Mike Crawley: Yes, no, we have the details disclosed at our February results is when we're setting out our guidance, and we're in line with that.
Eli Rodney: Great. Thanks guys, I'll leave it there.
Operator: Thank you. One moment for our next question please. Our next question will come from the line of Nicholas Boychuk with Coremark Securities. Your line is now open.
Nicholas Boychuk: Thanks, good morning. Coming back to that question about the project development costs. I wonder if you guys can expand a little bit, just on how you're thinking about the pace of that, and whether or not the correct read through is that kind of looking into the future, you've got the Alberta renewable ScotWind Round 3 Taiwan such green offshore opportunities. Is it fair to say that once you finish this current round of execution, those would be the primary focuses? And then, you'll try to backfill additional development projects afterwards?
Mike Crawley: No, I think - what we've said in the remarks at the beginning is that we will be disciplined in any new investment opportunities that, we pursue during this construction period. It doesn't mean, we won't necessarily pursue anything, but it would have to be a meaningful investment that, would have - that would be accretive to shareholders. A lot of the pipeline that we describe that Investor Day would be delivering cash flow, after these projects come online. But I could probably leave it at that. Do you have anything else to say, John?
John Brace: Just like to add or elaborate a bit in the sense that development continues. We are trying to be very focused on what we do, and pursuing projects that will deliver meaningful value to our shareholders. As we focus on construction there's a de-emphasis of development naturally as a consequence, but we do have to think of the future. We do have to think about continuing on and as the construction projects mature. And we have additional opportunity and appropriate financial resources, to invest in development. We will perhaps ramp up to higher levels, and we anticipate over the next shortest period of time.
Adam Beaumont: We did signal Nick at Investor Day that we would be looking at opportunities to potentially recycle capital. La Lucha is the first example of that, as we focus in on markets that we see better prospects moving forward with than others, and pull back from markets where we've seen more headwind. So La Lucha is the first example, but there is always the opportunity to gradually, and prudently reconfigure the business over the next few years, by recycling capital as well.
Nicholas Boychuk: Okay. Got it, thanks. And kind of in that thought of recycling capital, can you kind of share your thoughts on how you're thinking about EBSA right now? Obviously it had a great quarter. I'm curious if you could breakdown the 36% year-over-year gain on the top line between volume price effects, the sustainability of that and how you're thinking about that segment moving forward?
Mike Crawley: Adam can talk to the results, maybe.
Adam Beaumont: Yes, in terms of the results I think, when you're looking year-over-year, you're seeing the increase which is related to inflation escalation, which is inherent in the regulated return and as well as the appreciation of the Columbia peso. I don't have the specific numbers in front of me, but those are the two drivers for the increase year-over-year.
Mike Crawley: And on any transaction or anything that we're looking at, we wouldn't comment on those at this stage. I think what we said at Investor Day, which we would say again is that, we will always - you should not be surprised that we would be testing the market on various different options moving forward. But I would not read through that we necessarily will pursue every option that we test.
Nicholas Boychuk: Okay. Understood. Thank you.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Mark Jarvi with CIBC. Your line is now open.
Mark Jarvi: Yes, thanks. Good morning everyone. So just coming back to the comment about asset sales and capital recycling I know you don't want to talk about specific assets, but just walk me through your thought process, in terms of if you did sell someone sort of the triage, or where those proceeds would go today is it onshore growth? Is it tied in the balance sheet just to have some buffer for any contingencies? Is there any other uses? And given there's a CEO transition going right now, how do you think about proceeds coming in before they're actually deployed during that period?
Mike Crawley: Let me start then I'll hand it off to Adam. So I mean during the construction period, we are very much focused on ensuring strength of balance sheet that we have adequate buffers. In case on anything unexpected happens and so that we can continue forward with the construction and bring it to a conclusion. So that's important just from a simple resilience standpoint and a prudent management of the business. Otherwise there are we have a robust pipeline a diversified pipeline across offshore, onshore. We have a team that is dedicated and focused on looking at ways actually to optimize the existing facility - facilities we have and extract more value out of those, which arguably should be kind of your first stop in terms of allocation of capital. So there's a lot of spots, but I'll turn over to Adam.
Adam Beaumont: Yes I mean I said in the comments, I think that our current liquidity position is strong with $760 million of liquidity. And as Mike said, we won't you know we're exploring asset recycling as an option to create options, for the future. And how we redeploy it will depend, and we'll just make sure that we have the right interest of the company at mind at that time.
Mark Jarvi: Just to make sure that the balance sheet is well protected, if you did sell an asset some foregone free cash flow, you'd be fine with that for you know a temporary period as you see through the major projects. And then look to deploy that capital to bring back the free cash flow?
Adam Beaumont: Yes I think again it would be a part of the consideration so any cash that would you know be lost from a sale, will be part of the factor when we're looking at it and making sure we're making the right decision going forward. So I think that's what's important looking ahead.
Mark Jarvi: Okay and this question is for John. The CEO's transition maybe caught the market by a bit of a surprise, you've probably heard some feedback from investors. I'm just wondering, how you've integrated any feedback from stakeholders investors into how you're now thinking with the CEO search, any updated views in terms of how you're seeing the candidate pool. And checklist for the qualities that you'd like to see in an ideal CEO?
John Brace: I think the feedback frankly, was generally focused on CEO and a CFO search going on at the same time. There are many questions related to that, and as we said then and I'll repeat now I think we're in good hands as Mike has already waxed eloquently about Adam his capabilities as CFO. And I certainly subscribe to everything that Mike said Adam is fantastic. So, we will change to a permanent CFO in the due course of time. In terms of the CEO search, I kind of described it as an onion if there is a word - with the outer layer of the onion being finding somebody who is reflective of the high quality of management that we have already. The next kind of layer of the onion, is somebody who has demonstrated creation of shareholder value and strong leadership of a complex organization, and who has familiarity with capital markets and experience there. And finally, then you start to get into more detailed components of what kind of experience that are you looking for. And as I've said before one might immediately assume that it would be an absolute requirement that the person have experience in the electricity industry in a very direct fashion. But when then you think about it a little bit more, you realize that there are other industries that display similar characteristics of high capital costs long development times, long operating lives and so on. And they are what comes to mind or places like mining and oil and gas and infrastructure. That's not to say that we would like to have someone with electricity experience. So I think the feedback we've received hasn't really modified much about the criteria we're looking for in a CEO. Excuse me. The search is underway and I think it would be inappropriate for me to comment any information about the state of the search, or the progress underway while we are actively talking to people.
Mark Jarvi: That's helpful context John. Maybe just one follow-up would just be global sort of experience in terms of obviously Northland's expanded all over the world. That's sort of I guess appreciation, or understanding for a CEO having managed across different jurisdictions, is that key element versus someone who's maybe been a single jurisdiction maybe only Canadian exposure U.S. exposure or something like that?
John Brace: Yes international global whatever you want to call it that's certainly one of our list of search criteria.
Mark Jarvi: Okay. Thanks for the time today. Appreciate it.
Operator: Thank you. One moment for our next question. Our next question will come from the line of Jessica Hoyle with Scotiabank. Your line is now open.
Jessica Hoyle: Great, thanks. Good morning and thanks so much for taking my question. So just to start maybe on offshore wind. Can you give an update or any commentary on how the supply chain is getting set up in Taiwan, as it relates to the Hai Long project?
Mike Crawley: So we - Hai Long is probably the last of the original grouping of kind of round one projects that is to move forward. So Hai Long is benefiting to some extent from the establishment of a local supply chain for some of the local requirements. So there's a lot of learnings that we were able to gain by observing how the other projects engaged with the local suppliers and the supply chain also matured to some extent. Hai Long is also 300 megawatts plus 744 and the 744 megawatts actually doesn't have any local content requirements. So, we also have a substantial international supply chain as well Vietnam, Korea, from Europe. And overall as I reported in my opening remarks, we are pleased with how the fabrication is progressing, whether it's the pinpiles that hold the jacket foundations in place. Or the two jacket foundations for the OSS that have both been now installed actually not just fabricated, but installed and the OSS one of the two OSS platforms, is a six-story structure has now been fully fabricated and delivered to Taiwan for installation in the near future. So, overall we appreciate that some of the early-stage projects had some issues with the local supply chain. But I think we've benefited from observing that, and also from commercially and contractually negotiating and some flexibility to our local content obligations to allow us for example to swing in international components in some cases for local components, if the local supply chain is delayed, just to add buffer and reduce risk on the construction program.
Jessica Hoyle: Thanks for that. And then I think you mentioned that some of the strong wind conditions for offshore continued into April. So just looking at your guidance for the year, how do you think you're positioned within the range just given the strength in Q1? And then some of that favorable some of those favorable conditions in April as well?
Mike Crawley: Yes I think that the - yes like you said the results have been pretty strong so far to start the year, but it is the first quarter and we like to look things on a risk-adjusted basis. And we're kind of holding forward to the guidance that we've set at this time. Obviously, for future quarters we'll continue to revisit that, but that's what we're holding to right now.
Adam Beaumont: What's important when you look at the production from the first quarter or even from April I guess - those who will follow the Gemini app to see I mean we don't control the wind, but we control the availability of our facilities. And the operations team did a very good job in making sure that the facilities were operating at a high level of availability, so that we could capture that resource.
Jessica Hoyle: Thank you.
John Brace: And finally, if I can ask you that remember that wind resource is generally higher in the winter than it is in the summer. So, we did extremely well in the time that already was expected to do extremely well. We did we did better than expected, but there is a seasonality to this. And it's early in the year so, we're not trying to counter eggs before they're hatched, or chickens before they're hatched I should say.
Operator: Thank you. One moment for our next question. Our next question comes from the line of John Moore with TD Securities. Your line is now open.
John Moore: Hi good morning guys. Maybe just one question on your Alberta pipeline, and the power market restructuring that's going on there. I think it's safe to say that, you're not looking at an FID on something like Jurassic this year, just given the focus on construction execution. I think you've been pretty clear there, but I'm just wondering if that power market restructuring potentially pushes out the timeline where you might look to move forward with a project in Alberta, and just how you're thinking about your pipeline there more broadly given the potential changes we're seeing?
Mike Crawley: Yes, I mean there's two sets of changes broadly speaking in Alberta, first was the moratorium. And then, the conclusion of the moratorium with new sets of rules around development, right. And on that our approximately 1.5 gigawatt pipeline was largely unaffected. And so far as we already had our AUC permits on about a gigawatt of it. And then we also had some battery storage projects as well in that pipeline, which were unaffected by the rule changes. So that element of the changes in Alberta were neutral or you could even argue that positive to us as far as it put us in an advantageous position, relative to other projects that weren't as advanced in Alberta. With respect to the market redesign it's something that we are tracking very closely, and we're very much involved in the stakeholder process. Michelle Chislett who Heads up our Onshore Business Unit, is actually out in Calgary today. I think she's just staying in a roundtable with government officials later today as well, as that gets further developed. And we'll certainly be tracking to see what impact that has on the merchant market there. Our intent if we move forward with those projects is, to contract the majority of the output from them. Ad so, there is some latitude in determining how much we contract them based on the around the final market design and the impact that we see that having on market prices going forward, but that's kind of where it's at right now John.
John Moore: Okay. That's great all my other questions were answered. I'll leave it there. Thanks very much.
Operator: Thank you. One moment for our next question. Our next question is a follow-up with Eli Rodney from National Bank Financial. Your line is open.
Eli Rodney: All right, yes. So back on the offshore portfolio Gemini in specific. Could you give us some insight on to what level of curtailment you saw on Q1, and then maybe extrapolate that into April and May?
Mike Crawley: I don't unfortunately have the April and May numbers, but I think you'll see in the notes the amount of revenue curtailed overall was $21 million for the three months ended March 31.
Adam Beaumont: Speaking broadly unpaid curtailment is, tends to happen during periods of high production, and particularly when they overlap with holidays, or with periods of low industrial demand. So we'll see what happens over the next few months, but broadly speaking.
Eli Rodney: Great. And then one more on asset recycling, might have missed this, but it seems that the market sentiment today is broadly in favor of buyers. And I think Adam you mentioned taking a few year approach on your view to selling down stakes, or complete asset recycling with rates coming down now, is it fair to say that Northland is taking a bit more patient of an approach to selling down additional assets after La Lucha or maybe '25 or '26 would be a target year or are you still seeing good value for some of the non-core assets in the portfolio?
Mike Crawley: It's very conscious of on any asset recycling of value for shareholders. I mean we have a diversified portfolio across a number of different jurisdictions. So, what you said is perhaps broadly true, but once you start piercing into different markets and different specific assets. There could be different - it may not necessarily always be the case, but our criteria or our screen is making sure that we do achieve what we believe is good value on any divestment. Because we look at the full cycle economics on recycling from that divestment into the reinvestment into a new opportunity. And so the divestment economics are equally important to the investment economics right?
Eli Rodney: Right, thanks. Okay. I'll leave it there.
Operator: Thank you I'm currently showing no further questions at this time. I'd like to turn the call back to Mr. Mike Crawley for closing remarks.
Mike Crawley: Yes well, thank you for everyone for joining us today. We're going to hold our next earnings call following the result of our second quarter 2024 results in August, and in the meantime we want to thank everybody on the call, for their continued support.
Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect, everyone have a wonderful day.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.