Northland Power continues to build Offshore

       Workathon has covered every step of Northland Power's expansion.It took a huge step in 2015 by planning to and then building it's first offshore wind farm called Gemini,a 600MW behemoth.Then came the smaller Nordsee One at 332 MW.Both were built in the North Sea which reportedly has the strongest winds in the world.This went well and now they are completing the third one called Deutsche Bucht.But the focus now is on the China Sea and 3 new wind farms,each 300 MW.
                  The Fourth Quarter
  Most financial indicators were lower than Q4 in 2017.Revenues and adjusted EBITDA were lower than 2017 which was a quite good quarter. While free cash flow was greater by about 22%.                Net income and free cash flow were tight while NPI was building Geminin and Nordsee One, each costing about $2.5 billion.In 2015,2016 and 2017 financing costs were high and revenues were not yet reported.Now,in effect, Northland is over the financial hump.
                   2018 Financial Highlights
   Sales increased from $1.4 billion to $1.6 billion in 2017.This was primarily because of a full year of production from the 332MW Nordsee One.And adjusted EBITDA increased from $765 million to $891 million (the top end of guidance).Net income had a huge increase(47%) over 2017.While free cash flow increased 30% over 2017 to $1.90 per share.And management expects that e.p.s will be in a range of $1.75 to $1.95 again in 2019.Adjusted EBITDA should increase from $890 to the range of $920 to $1010 million.Their new offshore projects will make up the difference.
                  Construction Updates
      Most Northland Power shareholders are not terribly interested nor surprised by the Q4 results. They are more interested in the development of the new offshore wind farms.Their last wind farm constructed in the North Sea called Deutsche Bucht is now contributing pre-completion revenues and will be finished on time in 2019.It is about 270MW and will cause a significant jump in revenues and earnings in late 2019.They also have 3 new offshore projects in the China Sea off Taiwan.And they have all permits and approvals for the first called Hai Long 2A;permits and approvals and their PPA is expected for the other 2 in 2019.This overcomes the main slowdown that NPI had in the North Sea.Where it completed all it's construction but had to wait for approvals and it's PPA.This blog expects that pre-completion revenues will be coming in from Hai Long 2A in Q4 and for Hai Long 2B and 3 by mid-2020.
                Huge Increases in EBITDA
   Northland Power has a reputation of building big ($2-3billion) offshore wind farms on budget and on time.And each wind farm ,when completed,produces very large increases in EBITDA.Their Deutsche Bucht project will be finished in 2019 and is even adding pre-completion revenues now.The blog 4-C  Offshore says that there is no construction started on Hai Long 2A yet.But this blog believes that there may be pre-completion revenues by Q4 of 2019.So consequently adjusted EBITDA will be at the upper end of the range of $950 to $1025 million.While free cash flow is expected to be $1.65 to $1.95 per share.Look for NPI to be around $26 to $28 per share where it was in 2014.   https://bam.brookfield.com/  https://www.otpp.com/