Northland Power Reports Fourth Quarter 2024 Results and Announces 2025 Financial Outlook

Baltic Power, Hai Long and Oneida projects continue to make construction progress

TORONTO, Feb. 26, 2025 (GLOBE NEWSWIRE) -- Northland Power Inc. ("Northland” or the "Company”) (TSX: NPI) reported today financial results for the three months and year ended December 31, 2024. All dollar amounts set out herein are in thousands of Canadian dollars, unless otherwise stated.

Highlights

• Delivered strong operating results achieving the high end of 2024 financial guidance.
• Appointed Christine Healy as President, Chief Executive Officer ("CEO”) and Director, who started on January 20, 2025.
• Continued to make significant progress on the 2.4 GW of construction projects, Baltic Power, Hai Long, and Oneida.
• Completed the 23 MW upgrade of the Thorold natural gas facility on time and on budget.
• Positioned for growth with a robust balance sheet and available liquidity of $1.1 billion.
• Issued 2025 financial guidance with Adjusted EBITDA expected to increase to $1.3 to $1.4 billion, and Adjusted Free Cash Flow and Free Cash Flow expected to be $1.30 to $1.50 and $1.10 to $1.30 per share, respectively.
• Announced a change in the Dividend Reinvestment Plan ("DRIP”) by eliminating the discount to 0% (previously 3%). The DRIP will be sourced on the market by purchasing shares instead of treasury issuances.

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Financial Results

• Revenue from energy sales of $572 million in the fourth quarter of 2024 decreased from $626 million in 2023. Revenue from energy sales increased on a full-year basis to $2,346 million from $2,233 million in 2023.
• Net income increased in the fourth quarter of 2024 to $150 million from a net loss of $268 million in 2023 and increased on a full-year basis to $371 million from a net loss of $96 million in 2023.
• Adjusted EBITDA (a non-IFRS measure) decreased in the fourth quarter to $312 million from $389 million in 2023 and increased on a full-year basis to $1,262 million from $1,240 million in 2023.
• Adjusted Free Cash Flow per share (a non-IFRS measure) decreased in the fourth quarter to $0.31 from $0.75 in 2023 and decreased on a full-year basis to $1.53 from $1.97 in 2023.
• Free Cash Flow per share (a non-IFRS measure) decreased in the fourth quarter to $0.22 from $0.75 in 2023 and decreased on a full-year basis to $1.27 from $1.68 in 2023.

"We are pleased with our fourth quarter and full-year results, achieving the high end of our 2024 financial guidance,” said Christine Healy, Northland's President and CEO. "We have made excellent progress on our construction projects in Poland, Taiwan, and Canada. Some of these projects are expected to start contributing to Northland's earnings in 2025, continuing through 2026, with full realization in 2027. Our growth outlook for energy transition and demand for power is stronger than ever. A globally diversified portfolio across multiple technologies and a long-term contract asset base position us well for the future. I look forward to Northland continuing to deliver on its commitments.”

Significant Events and Updates

Growth Updates:

• Thorold Natural Gas Facility Upgrade - In November 2024, Northland completed a 23 MW capacity upgrade on time and on budget; demonstrating Northland's continued technical expertise and ability to deliver on natural gas assets. In the second quarter of 2023, Northland secured an amended PPA for the Thorold Co-Generation facility located in Ontario, Canada. This agreement allows for an increase in generating capacity and a five-year extension of the contract. The extension of the PPA remains conditional upon the successful completion of an upgrade test scheduled for 2025.
• Construction Update on Hai Long, Baltic Power and Oneida - The Hai Long project has completed over 50% of construction. During the fourth quarter of 2024, fabrication of key components that are required for the 2025 installation campaign progressed. For the full year, the project completed the installation of pin piles and turbine jacket foundations at approximately half of the turbine locations, which are ready for turbine installation in 2025. The fabrication of turbine components continues, including completion of the first sets of towers, generators and nacelles. On August 20, 2024, an incident occurred at the onshore substation due to a leak of carbon dioxide from the fire suppression system, which resulted in three fatalities. The onshore substation construction work was suspended during the investigation of the incident by the local authorities. Upon completion of the investigation, the work on the onshore substation resumed safely according to recovery plans. First power is expected in the second half of 2025. The project is on track to achieve full commercial operations expected in 2027 with overall project cost aligned with original expectations.

  The Baltic Power project continues to make progress on fabrication of onshore and offshore substations, foundations, export cables, multiple turbine components and inter-array cables. Major in-water construction activity commenced in January 2025 with the first monopile foundation installation. The offshore substation installation commenced and the first load of transition pieces have been delivered to the project. Construction of the onshore substation and the operations and management building are progressing according to the plan. The project is on track to achieve full commercial operations expected in the latter half of 2026 with overall project cost aligned with original expectations.

  The Oneida project is being commissioned with all major construction activities completed. The project is on track to achieve full commercial operations expected in the first half of 2025 with overall project cost aligned with original expectations.

• Other Growth Activity - Following the signing of the 15-year revenue offtake agreement, the 80 MW Jurassic BESS project in Alberta signed its key equipment supplier and construction contracts, and received a key permit to begin construction.

Balance Sheet:

• Changes to Dividend Reinvestment Plan - In February 2025, Northland approved a change in the discount on DRIP issuances from 3% to 0% and confirmed the intention to source shares through secondary market purchases rather than treasury issuances. Such changes will be effective from and as of April 15, 2025 and for the dividend payable thereon to shareholders of record on March 31, 2025. Pursuant to the terms of the DRIP, Northland has the discretion, from time to time, to change the applicable discount and source of shares. If the applicable discount or the source of shares is altered in the future, Northland will include information regarding such change in a press release prior to the effectiveness of the change. Participation in the DRIP is optional. For additional information on the DRIP, see: Dividend Reinvestment Plan.
• Refinancing of EBSA's Credit Facility - In November 2024, Northland extended the maturity of the non-recourse credit facility associated with EBSA (the "EBSA Facility”) to November 2027 and upsized the facility by $35 million. The financing marginally improved debt terms, and the proceeds were largely used to fund capital investments in EBSA and settle foreign currency maturity hedges.

Other:

• Executive Updates - Christine Healy started as President, Chief Executive Officer and Director on January 20, 2025.
• La Lucha Solar Facility Sale - During the fourth quarter of 2024, Northland received the entire amount relating to a value added tax claim of $42 million (equivalent to MXN 604 million).

Fourth Quarter and Full-Year 2024 Financial Results

Northland successfully ended 2024 achieving the higher end of its 2024 financial guidance for both Adjusted EBITDA and Free Cash Flow per share. Northland exceeded the guidance for Adjusted Free Cash Flow per share.

On a year-over-year basis, financial results for the three months ended December 31, 2024 were lower compared to the same quarter of 2023, primarily due to gains from the partial sell-down of the Hai Long offshore wind project in 2023 and lower offshore wind resource. This decrease was partially offset by lower unpaid curtailments related to negative prices and grid outages at our German offshore wind facilities, higher operating results from onshore renewable facilities, and higher revenue from EBSA due to growth in asset base and rate escalations.

Adjusted EBITDA for the year ended December 31, 2024 was higher, compared to 2023, primarily due to higher wind resource across all offshore wind facilities, higher operating results from onshore renewable facilities which includes full year contribution from New York onshore wind projects, higher revenue from EBSA due to growth in the asset base and foreign exchange changes as well as rate escalations. The results also reflect lower development expenditures due to disciplined spending on priority development activities, as planned. Note that 2023 results included gains from partial sell-down of development assets. Despite these higher operating results, Adjusted Free Cash Flow and Free Cash Flow for the year ended December 31, 2024 were lower, compared to 2023, primarily due to lower foreign exchange and interest rate hedge settlements and higher income taxes.

The following table presents key IFRS and non-IFRS financial measures and operational results. Sales, gross profit, operating income and net income, as reported under IFRS, include consolidated results of entities not wholly owned by Northland, whereas Northland's non-IFRS financial measures include only Northland's proportionate ownership interest.

Fourth Quarter Results Summary

Offshore wind facilities

Electricity production for the three months ended December 31, 2024 decreased 12% or 172 GWh compared to the same quarter of 2023, primarily due to lower offshore wind resource, partially offset by lower unpaid curtailments related to negative prices and grid outages at our German offshore wind facilities.

Revenue from energy sales of $280 million for the three months ended December 31, 2024 decreased 18% or $61 million, compared to the same quarter of 2023, primarily due to the lower production by $32 million, and P&I factor adjustment and various other items by $29 million.

Adjusted EBITDA of $181 million for the three months ended December 31, 2024 decreased 17% or $37 million compared to the same quarter of 2023, due to the same factors noted above.

Onshore renewable facilities

Electricity production at the onshore renewable facilities for the three months ended December 31, 2024 was 7% or 55 GWh higher than the same quarter of 2023, primarily due to higher wind and solar resource at the Canadian and New York onshore renewable facilities, partially offset by lower wind resource at the Spanish onshore renewable facilities.

Revenue from energy sales of $124 million for the three months ended December 31, 2024 increased 19% or $20 million compared to the same quarter of 2023, primarily due to higher revenue from the Canadian, New York and Spanish onshore renewable facilities. Please refer to the Management's Discussion and Analysis for the year ended December 31, 2024, dated February 26, 2025 ("MD&A”) for a further breakdown of Spanish portfolio revenue by component.

Adjusted EBITDA of $83 million was 21% or $14 million higher than the same quarter of 2023, primarily due to the same factors noted above.

Natural gas facilities

Electricity production of 764 GWh for the three months ended December 31, 2024 decreased 21% or 197 GWh compared to the same quarter of 2023, primarily due to lower operating availability because of outages at the natural gas facilities including the planned capacity upgrade at Thorold.

Revenue from energy sales of $79 million for the three months ended December 31, 2024 decreased 11% or $9 million as compared to the same quarter of 2023, primarily due to lower operating availability because of outages at the natural gas facilities.

Adjusted EBITDA of $46 million for the three months ended December 31, 2024 was largely in line with the same quarter of 2023.

Utility

Revenue from energy sales of $92 million for the three months ended December 31, 2024 increased 8% or $6 million compared to the same quarter of 2023, primarily due to the growth in asset base and rate escalations.

Adjusted EBITDA of $41 million for the three months ended December 31, 2024 increased 27% or $9 million compared to the same quarter of 2023, primarily due to the same factors noted above.

Consolidated statement of income (loss)

General and administrative ("G&A”) costs of $27 million in the fourth quarter decreased $11 million compared to the same quarter of 2023, primarily due to restructuring of operating and corporate functions, and La Lucha solar project entering commercial operations in 2023.

Development costs of $20 million decreased $8 million compared to the same quarter of 2023, primarily due to disciplined spending on priority development activities, as planned, and timing of the expenditures.

Finance costs of $97 million decreased 29% or $39 million compared to the same quarter of 2023, primarily due to one-time debt modification loss resulting from optimization of Spanish portfolio debt agreement in 2023 and scheduled principal repayments on facility-level loans.

Fair value gain on financial instruments was $10 million, primarily due to net movement in the fair value of derivatives related to interest rate and foreign exchange contracts.

Foreign exchange loss of $6 million in the fourth quarter was primarily due to fluctuations in the foreign exchange rates.

Share of profit from joint ventures of $23 million in the fourth quarter was primarily due to gain on fair value of derivatives at the joint ventures.

Other income was $129 million lower than the same quarter of 2023, primarily due to the gain on partial sell-down of Hai Long offshore wind projects in 2023, partially offset by the proceeds relating to Deutsche Bucht construction.

Net income of $150 million in the fourth quarter of 2024 compared to a net loss of $268 million in the same quarter of 2023, was primarily as a result of the factors described above.

Adjusted EBITDA

The following table reconciles net income (loss) to Adjusted EBITDA: