For part of 2020 and most of 2021 Northland Power has suffered from mild weather in the North Sea and brought earnings down from expected levels.The North Sea is considered by many as having the strongest winds in the world.But during this period the North Sea has not produced strong enough winds to turn the turbines on NPI's 3 large wind farms here.It appears that the trouble is really caused by a minor technical adjustment as the winds,themselves,but it is true that the winds have been more moderate than usual.Some analysts think the new German member of the board will help NPI to adjust to the unusual weather conditions in the North Sea.
Q4 Highlights
NPI produced a very average performance for the year(2021) both in revenues and earnings but performance picked up in Q4 and that augurs well for 2022.NPI points out that although revenues were flat in 2021 that performance from their Spanish and Columbia assets provided a strong contribution to their annual performance.Consequently sales increased by 30% in Q4 over Q4 2020 but only by 2% for all of 2021.Consequently the same pattern followed for adjusted EBITDA.That is, adjusted EBITDA increased by 35% in Q4 to $364 million but decreased by 3% for the year.Similarly net income increased by 383% in Q4 and decreased by 44% for the full year. And Northland Power points out that annual losses would have been greater if not for the offsets by their Colombian and Spanish portfolio.
Future Projects
Northland Power did not point out in this quarterly report that it has major wind farm projects in the system that are almost ready for commercial operations including Hai LongHai Long 2 and Hai Long 3 offshore of Taiwan and a solar project called La Lucha in Mexico. These are mentionned in my blog dated 03/23/2020 on Blogdaleupsome-Blogger. But it surprised shareholders with the news that it has a new Colombian solar project nearing completion and a large- scale offshore project Scotland (2340MW) expected to be commercial in 2029 and 3 more Nordsee projects (1350MW ) expected to be ready for 2026 to 2028.
NPI has just had a good Q4 as measured by all of it's financial indicators.This points to a better trend for 2022 as contributions come in from it's newly acquired assets like Baltic Power.Northland mentions the contribution from it's Spanish and Columbian portfolio but does not mention the status of it's newly acquired Baltic Power in Poland.Neither does it mention the expected contribution from Hai Long 1 and 2.But perhaps it is too early to see a significant contribution from it's Taiwan wind farm.It is clear that the weather has not cooperated with the ususally strong North Sea winds.Perhaps their new board member can help them harvest more power from the existing winds and make the required adjustments to weather the storm.If so then investors can expect a better 2022 than that of 2021.However this blog cannot give a price target until Q1 of 2022 has been examined. https://www.moneysense.ca
