Northland Power has reported CAD 1.4 billion in gross profit in 2018, a 17% increase, said to be primarily due to all turbines of the Nordsee One offshore wind farm producing power and higher wholesale market prices at the Gemini project.
The two wind farms, as well as thermal projects Thorold and North Battleford, brought Northland Power a 13% rise in sales, from CAD 1.4 billion in 2017 to CAD 1.6 billion in 2018.
Adjusted EBITDA increased by 17% from CAD 765 million to CAD 891 million, said to be primarily caused by the same factors that increased the two aforementioned factors. Net income increased by 47% to CAD 406 million.
According to Northland Power, Nordsee One also contributed to a 30% boost in free cash flow per share, from CAD 1.46 to CAD 1.90, partially offset by higher scheduled principal debt repayments.
“2018 was a significant year for Northland. We continued to operate safely and efficiently, achieving strong growth in free cash flow and adjusted EBITDA,” said Mike Crawley, President and Chief Executive Officer of Northland.
“Construction of Deutsche Bucht project remains on time and on budget, and we also remain well-positioned for continued growth.”
In the fourth quarter of the year, the electricity production of offshore wind assets, including pre-completion production, decreased 45GWh compared to Q4 2017 primarily because of lower winds in the North Sea, partially offset by all Nordsee One turbines producing power, whereas the project was under construction in 2017.
Sales and adjusted EBITDA respectively decreased by CAD 12.6 million and CAD 11.7 million compared to the same quarter of 2017 as a result of a change in an accounting estimate at Gemini totaling EUR 10.2 million (or circa CAD 9.2 million) to account for a lower subsidy due to a higher than average wholesale market price for the year.
This year, Northland Power expects the adjusted EBITDA to be in the range of CAD 920 to CAD 1,010 million caused by the addition of pre-completion earnings from Deutsche Bucht.
The Canada-based company anticipates free cash flow per share to be in the range of CAD 1.65 to CAD 1.95 per share, including the first full year of scheduled debt repayments at Nordsee One and higher costs related to the timing and the expanded scope of international development activities.