Northland Power beefs up the Balance Sheet by buying Poland's Baltic Power

Northland Power (NPI) is an utility covered many times in both my Workathon and Blogdaleupsome websites.It has gone from a regional energy provider to a global energy source.One major step was the construction and financing of three world class wind farms in the North Sea.Since 2017 NPI built Gemini (369MW) off of the Dutch coast and Nordsee One (285 MW) plus Deutsche Bucht (250MW) off of the German coast.However the North Sea is a volatile environment with the strongest winds in the world.And so the second step was acquiring solar powered operations in Mexico and Columbia .And in addition, building 3 more wind farms offshore Taiwan of which they owned 60% of 1044 MW.It is true that the second step has not been totally completed.This blog considers their investment in Poland  with Baltic Power to be a major third step.

Baltic Power

Northland Power has acquired a 49% interest in Baltic Power from PKN Orlen of Poland.Poland offers the largest market in central Europe and PKN Orlen is the largest utility in central Europe.Poland is considered to be a substantial market for power in Europe. Baltic Power is considered to be in mid-development stage.Yet it has the potential of generating 1200 MW of power; the same power generation as the 3 wind farms offshore of the German-Dutch coast.Before this plant is completed NPI must invest another $110 million CAD.When it is completed Northland expects a 25 year power purchase agreement.

Fourth Quarter Highlights

On February 22 (after the Baltic Power agreement) Northland reported it's fourth quarter results.It is not clear whether Q4 results included results from their new New York winds project.However annual revenues and earnings showed good improvement over 2019.Annual e.p.s. were solid  and on track to hit $1.75-$1.85 per share for 2020.But this blog believes that e.p.s.will show only a slight increase over 2019.

2020 Forecast

The annual report showed that e.p.s. for 2019 was $1.75 per share.Guidance states that annual e.p.s. for 2020 will be in a range from$1.60-$1.70.This blog agrees with this assessment.The New York winds project will contribute to 2020 earnings.But Baltic Power will not be able to generate earnings likely until 2022.However there is capacity for a total of 4-5 GW of power for the entire Polish  project.While Hai Long 2 and 3(offshore Taiwan) will not contribute until 2025.In summary, 2021 may be an average year for Northland but investors who can wait for Q4 of 2021 or Q1 of 2022 will be amply rewarded.  https://www.fool.ca/

 

Past Workathon Blog Predictions on Go Easy Financial

 In the past, my blogs have been based on the change shown in the present quarter made in the subject company from the last quarter and the past year.This blog will look at predictions made in Workathon and Blogdaleupsome blogs which are both a part of Google Blogger.There will be less emphasis on comparing the data from one quarter and one year to the present quarter.Instead more emphasis will be put on the change in direction from the past quarter and past year. As well as the direction predicted in past Workathon blogs.                               The two blogs that I will rely on for these predictions are- February25,2020 and October4,2020 on my Blogdaleupsome website.And the direction predicted ,in general, was that the growth in revenues must get back to the levels seen in 2017,2018 and 2019.In addition, they must keep up their work on controlling the delinquency rate on loans.Lastly they should increase their stake in the small online payments company called Paybright.

       Predictions

   So the first blog was done on February25,2020 and it stressed the importance of increasing it's non-prime lending and leasing  to include loans for customers to pay off bills and debts.This has been done and loan originations have risen in response.The February blog also recommended tightening up it's loan process so as to reduce it's delinquency rate and this has been a big success in GSY increasing it's margin.And it has now had continuing record high adjusted EBITDA.This blog also recommended buying a small furniture company like GBT in Quebec in an attempt to increase revenues on it's consumer goods side.This did not happen yet.

    The second blog was posted on October4,2020.First it predicted that the annual earnings for 2020 would be between $6.50-$7.00 per share.These figures underestimated Go Easy as GSY reported annual earnings of $7.57.Once again showing an increase in the margin while revenues were close to the estimate.Secondly this blog approved the minority interest taken in a small online payment company called PayBright.In fact,this blog recommended increasing their stake here.As it would further modernize Go Easy and could increase their P/E  multiple.However instead GSY sold it's stake in Pay Bright to a company called Affirm.Although it made a handsome profit this could restrict future growth in the growing online area.                                           

 

      Future Predictions

  Now Go Easy has a market capitalization of about $2 billion.If it is going to get to $4 billion then some of the changes already made must continue and some new ones implemented.The improvements on the delinquency rate should continue.But the growth in revenue is waining.Go Easy must make a few acquisitions on the consumer goods side such as a small furniture maker or  a small appliance maker to bolster consumer goods sales.But the biggest change recommended is to continue it's relationship with PayBright and to find another online payment company to include under the Go Easy umbrella.In order to increase it's growth in revenue GSY must have a greater online presence and the profits made from PayBright  should make it easy to do.As said in the earlier blogs this will increase it's P/E ratio and send the price towards $135 per share.     

     https://www.woodbridgegroup.com/