Northland Power gets new sun and wind Power Projects

     It took a long time for Northland Power to get completed power purchase agreements (PPA) on it's three wind farms in the North Sea.The projects were built but little revenues were coming in as the PPAs were not signed.Although there was a small delay the first two are now fully commissioned.NPI tells investors not to expect revenues until 20202.But this blog expects pre-completion revenues in Q4 of this year.  Now NPI has released it's first quarter report and it tells shareholders that they have a PPA for the 300MW Hai Long 1 and close to having them for the 232MW Hai Long 2 and 512 MW  Hai Long 3.This is partly due to the fact that they are only 60% owner of these 2 new wind projects;the remaining 40% is owned by Yushan Energy of Taiwan.This makes it easier to get PPAs signed.But Northland has also announced a new solar project in Mexico;this 130MW project has obtained all permits required for construction and is expected to be generating revenues in Q2of 2020.
      First Quarter Highlights
    The first quarter only showed slight growth over Q1 in 2018.
     On May 8 Northland released it's first quarter results and they were largely as most investors expected.They are showing slow, steady growth.Revenues increased 3% from 2018 while adjusted EBITDA increased by 1% to $294 million.Net income increased by 15% to $204 million.                                                                                         This blog expects generally that this trend will continue into Q2.There will be no major changes in Q2 and only small changes in Q3.Investors will have to wait until Q4 to see the initial impact from Deutsche Bucht.But the changes will potentially be quite significant.Adjusted EBITDA may hit $1200-$1300 million and net income may jump to $940 million- $1 billion in 2019. 
        

 2019 is Another Building Year
   Once again Northland is working on not one but two major investment projects.Investors have to see beyond the second and third quarter to get the fruit of their endeavours.But NPI offers a substantial dividend for investors to wait.The fourth quarter should  start to show some pre-completion revenues while Q1 in 2020 will have sizeable gains in revenues and earnings.
    Northland says in their guidance that adjusted EBITDA will be $920 -$1010 million for 2019 and earnings per share of $1.65-$1.95.This blog sees adjusted EBITDA of $1050-$1200 million and e.p.s. of $1.80-$2.00.Investors need to know that  NPI is growing in leaps and bounds.So much so that their net income is almost 65% of Emera Utilities which trades at $55 a share.Consequently this blog sees Northland Power trading at close to $30 by year-end.In other words about 60% of the Emera price.https://www.brookfield.com/

Go Easy earnings shoot up but needs a New third Division

         On May7 Go Easy reported it's financial results.Revenues were up by 22% but e.p.s was up by 53% and net income by a whopping 65%.Go Easy calls these  record  results.For example, Scotiabank shows 2018 e.p.s at $3.97 and the P/E ratio at 12.84.But now based on Q1, e.p.s are on track to hit $5.00 per share.At present P/E levels this will move the stock price to about $63 per share.Even with a slight reduction in the P/E ratio as growth dampens this should bring the stock up to the $60 level.It's present price of $51 shows it as  considerably undervalued.

     

And Now for the Rest of the Story

This blog was not too surprised by these favorable results.Go Easy has a very successful consumer loan division.Most readers have seen their advertisement on television showing people paying bills (not Goeasy consumer products).This helps to explain how their consumer loan portfolio increased from $600 million to $879 million in Q1 2018.But one of my blogs on Website123.com suggested that Goeasy make some kind of combination with the faltering Street Capital Bank as well as with Pinetree Capital.Both are represented in the picture above.It is true that SCB has been losing money lately and will need some GSY  investment to shore up SCB finances.But Goeasy must pick and choose the functions that it will push on consumers.For example, mortgages may be considered too competetive to invest heavily in.Nevertheless Goeasy will be a successful operation with more tools to use now. 

https://www.omers.com/  https://www.otpp.com/

Is Atlantic Power poised for a Recovery?

        Atlantic Power is an utility that has been covered in several of my Workathon blogs.The financial literature (both online and offline) is full of blogs that say that ATP is ready for a comeback.It was $13/share in 2013 and has traded as low as $1.45/share.but their new CEO has done a lot of things to improve Atlantic Power and so some pundits are suggesting there may be a comeback.This blogs' answer is no-not yet.                

              Changes since 2013
    It was starting to look like ATP would rebound in 2019.The stock had moved up to the $3.50 level.Debt had been cut almost in half although the dividend was gone now.It had a power generating capacity of 2138 MW of which it owns 1500 MW.But back in 2013 it owned 28 power plants and now it owns 23 (2 are in Canada).ATP just released it's Q1 results and almost all financial indicators were down from Q1 2018.It appears that Atlantic Power is suffering from the closing of four plants in northern Ontario. Although there has been some compensation from the province as a result of their Go Green platform.So the price has fallen off from their January and February highs.Recently Atlantic Power has made arrangements to sell it's 300 MW Manchief natural gas power plant.But in return it bought from Altagas their share of two biomass plants which generate about 85MW of power.
        Slow Growth
     Atlantic Power had 28 generating plants in 2013.Now it has 23 and selling one more in 2022 ( 300MW).It is not totally replacing the generating power that has been lost.But it is buying 50% interests in 2 biomass plants with 85 MW of power this year.On the positive side it has reduced total debt by about 50%.There is credit capacity to buy or to build more generating capacity.However there is another option!ATP  would make an excellent fit for one or two Canadian utilities with significant foreign (especially American utilities).One is Emera and another is Algonquin Power.This blog has suggested an acquisition with Algonquin but it is possible that Algonquin sees too many problems.Also they just made an investment in Bermuda.There would be connection or combination problems as well as internal ATP problems.But Emera could also be a good fit and has a very substantial cash flow (about$700 million).       http://algonquinpower.com/ http://www.emera.com/en/home/default.aspx