The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from Marketwire

Northland Power Inc. Announces Results for the First Quarter of 2011

Monday, June 13, 2011

Northland Power Inc. Announces Results for the First Quarter of 201119:07 EDT Monday, June 13, 2011TORONTO, ONTARIO--(Marketwire - June 13, 2011) - Northland Power Inc. ("Northland") (TSX:NPI)(TSX:NPI.PR.A)(TSX:NPI.DB)(TSX:NPI.DB.A) reported its financial results today for the quarter ended March 31, 2011.FINANCIAL AND OPERATING HIGHLIGHTS3 Months Ended March 3120112010FINANCIAL (thousands, except per unit amounts)Sales$96,271$63,045Income from Operations$30,024$20,007EBITDA$43,896$30,467Net Income$55,308$(61,394)Free Cash Flow$18,664$18,417Dividends declared to Shareholders$20,461$19,273Per ShareFree Cash Flow$0.2473$0.2580Dividends declared to Shareholders$0.2700$0.2700Energy VolumesElectricity (megawatthours)883,613497,229Steam (thousands of pounds)612,971286,387Fuel consumption (thousands of gigajoules)6,5533,314Overview and OutlookManagement views Northland's first quarter results and development activities as well-aligned with its strategy of stability plus growth and its vision of intelligent energy for a greener planet. All facilities operated within expected parameters, and construction projects proceeded within budget and on or ahead of their completion schedules.In addition to 446 MW of projects under construction, Northland has a robust pipeline of clean and renewable energy projects, all of which meet its return thresholds and offer the prospect of long term power purchase agreements with creditworthy counterparties.Consolidated sales, income from operations and EBITDA for the three months ending March 31, 2011 exceeded first quarter results in 2010, largely due to the inclusion of operating results for the Thorold facility, which began commercial operations on April 1, 2010. Net income was $116.7 million higher than for the same quarter last year, due to a combination of cash and non-cash items. Cash items included Thorold's contribution net of $5.4 million in higher finance costs, primarily interest expense, related to its commencement of commercial operations. The main non-cash items were a $29.3 million gain in the fair value of Northland's interest rate swaps (2010 - $0.2 million) and $20 million of future tax recoveries (2010 - $2.3 million). The current quarter also benefited from a significantly lower non-cash fair value adjustment on Northland's convertible shares and Replacement Rights under International Financial Reporting Standards. The complete first quarter report for 2011, including management's discussion and analysis and unaudited interim financial statements are available on and summary comparison of Northland's full year 2010 results under International Financial Reporting Standards and Canadian Generally Accepted Accounting Principles is also available at and Free Cash FlowShare dividends for the quarter totalled $0.27 per Share, representing a payout ratio of 109% of free cash flow. This payout in excess of free cash flow primarily relates to dividends paid on incremental share capital raised in advance to finance new projects currently in construction. The proforma projected cash flows of projects under construction, if added to free cash flow, would reduce the dividend payout ratio to below 100%.Management and the board of directors intend to maintain Northland's current monthly dividend of $0.09 per Share, and expect to pay annual dividends of at least $1.08 per share until all projects currently under construction are completed and begin generating revenues.ConstructionMont Louis Wind Farm: This approximately $180 million, 100 megawatt ("MW") project in the Gaspésie region of Quebec is substantially complete, on-schedule and on-budget. The project is scheduled to achieve full commercial operation during the third quarter of 2011 when the Hydro-Québec interconnection is ready. North Battleford Energy Centre: This approximately $700 million, 260 MW gas-fired baseload facility located in Saskatchewan is within-budget and ahead of schedule for its completion, planned for June 2013.Spy Hill: This approximately $141 million, 86 MW gas-fired peaking facility, located in Saskatchewan is within budget and on-schedule, with completion planned for the fourth quarter of 2011.Significant EventsOn January 1, 2011, Northland Power Income Fund converted from an income trust to a corporation and carries on business as Northland Power Inc., a Canadian public corporation, trading under the TSX symbol NPI. Northland Power Income Fund Units and convertible debentures and preferred shares of Northland Power Preferred Equity Inc. have been converted into Northland Power Inc. securities.On February 11, Northland entered into a 50/50 partnership with Mnidoo Mnising Power, a partnership formed by the United Chiefs and Councils of Mnidoo Mnising First Nations ("UCCMM"), to develop the McLean's Mountain 60 MW wind farm project, located on Manitoulin Island in Ontario. Northland and UCCMM will also pursue future potential renewable energy projects on the UCCMM members' traditional territory.On February 16, 2011, Northland finalized a previously-announced agreement with Investissement Québec under which Investissement Québec will provide $15 million of debt financing for the Mont-Louis wind project.In early January, Michael Shadbolt joined Northland as Vice President and General Counsel. Prior to Northland, Michael was in private legal practice for 18 years, including as a partner at Macleod Dixon LLP and Borden Ladner Gervais LLP focusing on electricity sector legal matters.Subsequent EventsOn April 1, Paul Bradley joined Northland as Chief Financial Officer. Prior to Northland, Paul was Managing Director and Head of Power and Utilities (Corporate Finance) at Macquarie Capital Markets Canada Ltd. Previously, he held senior positions at the Ontario Power Authority, Canadian Imperial Bank of Commerce, and Duke Energy Corporation. Tony Anderson, Northland's Chief Financial Officer from its earliest days, will remain a full member of the leadership team as Chief Investment Officer, responsible for directing new investments.On May 31, Northland renewed and amended its corporate line of credit and increased it to $250 million from $130 million. The credit facility was renewed until May 2015 and is used for general corporate purposes, including letters of credit.ABOUT NORTHLANDNorthland owns or has a net economic interest in 818 MW of operating generating capacity, and 446 MW of generating capacity in advanced construction. Northland is also developing approximately 2,000 MW of additional power generation opportunities. Northland's assets comprise facilities that produce electricity from "clean" natural gas and "green" renewable sources such as wind and biomass. Electricity generation is sold under long-term PPAs with creditworthy customers, and any fuel for natural-gas-fired projects, where required, is purchased under long-term contracts to assure stability of operating margins. Three wholly-owned natural-gas-fired plants are located in Ontario: the 120 MW Iroquois Falls facility, the 110 MW Kingston facility and the 265 MW Thorold facility. Through its 19% equity interest in Panda Energy Corporation, Northland has an interest in the 230 MW Panda-Brandywine combined-cycle power plant located outside Washington, D.C. Northland owns the 127.5 MW Jardin d'Éole wind farm near Matane, Quebec, which began commercial operations in late November 2009 and sells electricity under a long- term PPA to Hydro-Québec. Northland owns two wind farms located in Germany with 21.5 MW of installed capacity with all electricity generated being supplied to local power utilities under the terms of German renewable energy legislation. Northland manages on behalf of third- party owners, and has an economic interest in two natural-gas- and biomass-fired generation facilities in Kirkland Lake and Cochrane, Ontario for which Northland earns management, gas purchase and performance incentive fees. Northland also owns a small chipping facility located on Vancouver Island and an engineering services business. Northland owns the 86 MW Spy Hill project, the 260 MW North Battleford project, the 100 MW Mont Louis wind farm and 4 roof top solar installations, all of which are under advanced construction. Northland also has an extensive portfolio of approximately 2,000 MW of projects under development, including 216 MW of wind, solar and run-of-river hydro projects awarded PPAs under the Ontario Power Authority's FIT program, and a recently awarded 20-year PPA by Hydro-Québec to build and operate a 24 MW wind farm near Frampton, Quebec. Once Northland's Spy Hill project is operational in late 2011, Northland's cash flows will be diversified over five geographically separate regions and regulatory regimes.Northland's common shares, preferred shares and two series of convertible debentures, which trade on the Toronto Stock Exchange under the symbols NPI, NPI.PR.A, NPI.DB and NPI.DB.A, respectively, are qualified investments for RRSPs, RRIFs and DPSPs under the Canadian Income Tax Act. Northland has in place a dividend re-investment plan that allows common shareholders who are residents of Canada to automatically have their monthly cash dividends reinvested in additional common shares. Participants do not pay any costs associated with the plan, including brokerage commissions. For further information or to join the plan, contact your financial advisor or broker.FORWARD LOOKING STATEMENTSCertain statements in this News Release, other than statements of historical fact, are forward-looking statements based on certain assumptions and reflect Northland's and its subsidiaries' current expectations. Forward-looking statements are provided for the purpose of presenting information about management's current expectations and plans relating to the future, and readers are cautioned that such statements may not be appropriate for other purposes. These statements may include, without limitation, statements regarding the operations, business, financial condition, priorities, ongoing objectives, strategies and outlook of Northland and its subsidiaries. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "expects", "anticipates", "plans", "believes", "estimates", "intends", "targets", "projects", "forecasts" or negative versions thereof and other similar expressions, or future or conditional verbs such as "may", "will", "should", "would" and "could". This information is based upon certain material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking statements, including the perception of historical trends, current conditions and expected future developments, as well as other factors that are believed to be appropriate in the circumstances. Although these forward-looking statements are based upon management's current reasonable expectations and assumptions, they are subject to numerous risks and uncertainties. Some of the factors that could cause results or events to differ from current expectations include those set out in the management's discussion and analysis section of Northland's 2010 annual report and in Northland's Annual Information Form dated March 31, 2011, certain of which are beyond management's control. Northland's actual results could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or what benefits, including the amount of dividends, Northland and its Shareholders will derive therefrom.The forward-looking statements contained in this press release are based on assumptions that were considered reasonable as of the date hereof for the purpose of providing readers with Northland's expectations for the coming year. The forward- looking statements may not be appropriate for other purposes. Other than as specifically required by law, Northland undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise.FOR FURTHER INFORMATION PLEASE CONTACT: Barb BoklaNorthland Power Inc.Manager, Investor Relations647-288-1438(416) 962-6266 (FAX)infobokla@northlandpower.caORBoris BalanNorthland Power Inc.Director of Communications647-288-1210(416) 962-6266 (FAX)