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/
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