Northland Power approaches $1 billion in adjusted EBITDA

                  Above is a picture of Niagara Falls.It has an abundance of cheap power.Until 2015 Northland had mostly domestic projects like Niagara;most were natural gas and some solar power generation.But in late 2015 they started the first of 3 huge wind farms in the North Sea.This changed Northland Power in a significant way and forever because Gemini has 600 MW of power,Nordsee One has 332MW of power and Deutsche Bucht has 267MW.In addition, this started NPI on the road to constructing larger wind projects around the world.Northland manages and gets the financing for these large projects itself. And now Northland is working on a large wind farm offshore Taiwan.
              A Successful third Quarter 
    Northland had a better than average third quarter.Revenues were up by 15% and there was a 23% increase in adjusted EBITDA.At the same time free cash flow increased by 38%.NPI also reports that their third wind farm in the North Sea is on time and on budget.They have 13 foundations installed to date and should finish by the late third quarter of 2019 with pre-completion revenues coming in the second quarter.           

       Nine month Progress
     Adjusted EBITDA which is the best indicator of profitability for an utility was at $670 million for 9 months including $196 million in Q3.E.P.S. for 9 months was $1.28 and $.38 for Q3.This means that e.p.s. is on track to hit $1.75 per share and adjusted EBITDA on track to hit $975 million.Northland gives guidance of $930 million and $1.75 to $1.95 per share for the full year.This blog feels that this may be a little low.On the other hand there will be little  news  in Q4 on their big projects-Deutsche Bucht and the Taiwan wind farm.Investors will have to wait until 2019 for that.
         Outlook for Northland Power
   Northland Power has large projects and has a tendency to have large jumps in revenues and earnings when projects finish.But Q4 will not have a large increase in revenues;it will be a gradual increase.Even with that NPI is on track to hit adjusted EBITDA of $950 to $975 million for 2018.Northland itself gives guidance of only $930 million.In addition, e.p.s.was $1.28 for 9 months and is on track to hit $1.75 per share for 2018.Northland gives guidance of $1.75 to $1.95 per share.This blog expects adjusted EBITDA to be higher than in Q3 as Northland says " 9 month results include unusually lower than average offshore winds speeds in northern Europe".There is a good chance that winds may meet the historical average in Q4.If so then look for e.p.s. of $1.95 and with a P/E ratio of 12 this places Northland in a range between $22 and $26 per share.A small dividend increase in Q2 2019 would put NPI in the high end of this range.             https://www.brookfield.com/  https://www.omers.com/