Transcript: Northland Power Q2 2026 Earnings Conference Call

Northland Power (TSX: NPI ) reported second-quarter financial results on Thursday. The transcript from the company's second-quarter earnings call has been provided below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

The full earnings call is available at Summary Northland Power reported a 6% increase in adjusted EBITDA to $259 million for Q2 2026, driven by contributions from Hai Long and Oneida operations, but offset by lower offshore wind production in Europe. 4 billion financing package. 25. Operational highlights include 96% availability of resources and the commencement of construction on two battery storage projects in Poland, Kameonka and Micislawo.

Management emphasized strategic growth in markets such as Poland, Spain, and the UK, and highlighted the importance of value enhancement projects and disciplined capital allocation. The company is cautious about new opportunities in Canada due to competitive returns and regulatory challenges, but remains optimistic about potential growth in Europe and Asia. Full Transcript OPERATOR Welcome to the Northland Power Conference Call to discuss the second quarter 2026 results. As a reminder, this call is being recorded on Thursday, August 13, 2026 at 10:00am Eastern.

Present for the call are Christine Healy, President and CEO; Jeff Hart, Chief Financial Officer; and Adam Beaumont, Head of Capital Markets. Before we begin, Northland's management has asked me to remind listeners that all figures presented during today's call are in Canadian dollars and to caution that certain information presented and responses to questions may contain forward-looking statements that include assumptions and are subject to various risks. Actual results may differ materially from management's expected or forecasted results.

Please read the Forward-Looking Statements section in yesterday's news release announcing Northland Power's results and be guided by its contents when making investment decisions or recommendations. The release is available at I will now turn the call over to Ms. Christine Healy. Please go ahead.

Christine Healy, President and CEO Thank you. Good morning everyone and thank you for joining us. Northland continued to execute on our strategy this quarter, delivering strong operating performance, advancing our projects in construction and progressing the opportunities that will drive our next phase of growth. I'll provide some construction updates and Jeff will then walk through the financials in more detail and we will open the line for questions.

But before jumping into our results, I wanted to take a moment to comment on our broader market backdrop. Across our core markets, we're seeing a level of electricity demand growth that has not been present for decades. That growth is being driven by industrial activity, data centers, electrification, urbanization and, more importantly over time, energy security. The energy security point is particularly important in Europe.

For the Canadians and Americans on the call, the current European market reality is quite different. North American natural gas prices remain relatively low and are largely disconnected from European and Asian gas pricing. In markets such as Germany, natural gas remains a key driver of electricity prices, which means volatility in global gas markets continues to flow into power markets and resulting pricing. That's why the discussion in Europe has moved beyond simply adding renewable capacity.

The focus is on building an electricity system that's secure, affordable and able to support the electrification, industrial needs and the data center demand. This matters for Northland. It validates our multi-technology approach and reinforces the importance of investing based on what an electricity system needs. We don't start with a technology and look for somewhere to deploy it.

We start with market fundamentals, system needs and risk-adjusted returns, and we invest selectively where our capabilities can deliver results. We don't see this as a short-term cycle. We see a structural shift in electricity markets, recognizing of course that the pace and shape of that shift will vary by market. Northland is well positioned to respond through our differentiated development, construction and operating capabilities across renewables, gas-fired power and storage.

And I will note here as well that Northland does have a particularly differentiated capability in offshore wind, demonstrated by the delivery of our two world-class projects in construction and our projects in operation. We have the people, partnerships and execution capability to deliver this necessary and growing source of energy. I will add that not a single electron gets added to the grid through policy and discussion alone. It requires capable owners and operators who can build and run the infrastructure our markets need, and this is where Northland delivers.

Turning now to our operations over the quarter, I've noted on these calls in the past that our goal is to be ready when the wind blows and the sun shines, and in the past quarter our availability was very strong. In the case of our gas assets, we are ready to dispatch when the market needs us. In Q2, wind resources across Europe, particularly in the North Sea, were at the low end of historic averages. This was partially offset by our Spanish onshore renewables portfolio where solar and onshore wind resources were generally in line with the same period last year.

Against that backdrop, our operational performance was strong with 96% availability, ensuring we were well positioned to capture the wind resource when available. Importantly, the low European wind was a second quarter story. Year-to-date generation is in line with historical average levels and you will recall there were strong wind conditions in Q1. As a result, we are reaffirming our full year 2026 adjusted EBITDA and free cash flow per share guidance.

Turning to our projects in construction, just a few weeks ago we made history in Poland. 1 gigawatt Baltic Power offshore wind project achieved first power, delivering the first electrons ever produced from an offshore wind project to Polish homes and businesses. This was a major milestone for the project, for Northland, our partner Orlen, and for Poland. Many Polish and Canadian dignitaries were in attendance to mark the significance of this landmark event.

Today, 61 out of 76 turbines are installed and 15 are generating power. The project is on track for commercial operations later this year with costs aligned to original expectations. Poland is a priority market for Northland. We have built local partnerships, established in-country expertise and continue to see compelling market fundamentals driven by robust economic growth and the need for additional energy infrastructure.

Our battery storage projects in Poland are a natural extension of these capabilities and an attractive opportunity to further expand our presence in the market. During the quarter we commenced construction on those battery storage projects, Kameonka and Micislawo. Both projects represent a combined 300 megawatt 4-hour duration or 1,200 megawatt-hours of capacity. Site preparations and foundation work are underway, major equipment has been ordered and both projects are on track for commercial operations in 2028.

These projects deepen our platform in Poland and build on the expertise gained through the successful execution of Oneida and the ongoing construction of Jurassic BESS. We are leveraging lessons learned and our proven capabilities in development, construction and operations to support project delivery and create long-term value for shareholders. 4 billion financing package. Through this, we've optimized the project, attracted new local banks and accessed lower financing costs.

We are encouraged by the increased participation from local banks in this financing. Their involvement reflects the confidence and support for the Hailong project in the Taiwanese market and reinforces the importance of aligning long-term infrastructure investments with domestic stakeholders. Construction continues to progress as 71 out of Hailong's 73 turbines are installed with 59 generating power. We expect all turbines will be generating power later this year and full commercial operations will be achieved in 2027.

Shifting to Canada, our 80 megawatt, 160 megawatt-hour Jurassic BESS project in Alberta is in construction. All the major equipment has been installed and we are in the final stages of commissioning with commercial operations expected shortly. Once complete, Jurassic BESS will be the largest battery storage project in Alberta and Northland's second operating battery storage facility following from Oneida's successful commissioning in Ontario last year. 5 gigawatts of new capacity to our future operating portfolio and will deliver a meaningful increase in EBITDA and cash flow as they come online.

Beyond our current construction program, we are focused on converting this backdrop—the macro backdrop I spoke of earlier—into the next phase of disciplined growth, particularly through opportunities where Northland already has operating experience, development capability or established relationships. In Canada, we are encouraged by the improving policy dialogue and the growing alignment between federal and provincial governments on the need for new infrastructure. We are watching carefully for regulatory improvements that can help unlock the next phase of investment for Northland.

This could create a compelling opportunity set in our home market, particularly where our development, construction and operating capabilities can be applied with discipline. In Europe, our focus remains on markets where long-term policy direction, system needs and Northland's capabilities come together to support attractive investment opportunities, and we see opportunities to deploy capital for strong risk-adjusted returns across our core markets including Poland, Spain and the UK. We will pursue growth where market fundamentals, risk-adjusted returns and Northland's capabilities align.

We will provide a fuller update on our growth priorities with our third quarter results. For now, our message is that the opportunity set is broadening and our approach will remain disciplined. Our recent Poland BESS acquisition is a good example of our approach. We identified and secured mature opportunities in a core market and we have been able to execute on them very well.

Value enhancement is also an important part of our growth strategy. As an owner and operator, Northland has visibility across the full asset life cycle which allows us to identify opportunities to increase returns from existing infrastructure, grid connections and development rights. These initiatives can offer attractive risk-adjusted returns with lower capital intensity and execution risk than fully new build. Development work is ongoing including evaluating hybridization opportunities, repowering, recontracting and capacity optimization initiatives across our fleet.

We are focused on delivering the opportunities in front of us and creating long-term value for shareholders, and with that I'll turn it over to Jeff to walk through our financial results. Jeff Hart (Chief Financial Officer) Thanks, Christine, and good morning everyone. I'll provide some further color on our Q2 results. Northland Power generated adjusted EBITDA of $259 million, a 6% increase compared to the second quarter of 2025, and that increase was driven by revenue contributions from Hai Long and a full quarter of Oneida operations, combined with lower operating costs at our natural gas facilities.

As Christine noted earlier, those increases were partially offset by lower offshore wind production in Europe, which was approximately 11% below the long-term average. The resulting second quarter free cash flow was $23 million. This was approximately 60% lower than the same quarter last year, and the primary contributing factor to the decrease in free cash flow was a one-time benefit from a German trade tax refund recognized in the second quarter of 2025. 22 in Q2 2025.

Our net loss was $54 million for the quarter, which was in line with the second quarter of 2025. I will note, in July one of Gemini's two export cables had a circuit failure and was taken out of service. Gemini's production has continued via the second export cable and the subsea repair of the other cable is underway with completion expected this year; we expect the impact on our full-year results to be immaterial, net of insurance proceeds. And turning to our investment program at our offshore construction projects, Baltic Power and Hai Long both are on track for commercial operations with overall costs aligned with original expectations.

At Baltic Power, as Christine mentioned, we achieved first power in early July and expect to achieve full commercial operations later this year. 4 billion Canadian dollars. This financing strengthened the project's capital structure and provides an alternate source of lower-cost funding. 4 billion represents incremental funding capacity available through project completion.

5 billion of higher-cost debt. The financing attracted a number of new local lenders, further reflecting the quality of the project and execution. Hai Long's construction remains on track and the forecast of pre-completion revenue combined with the incremental debt is expected to cover the project's funding requirements. 25 per share.

And I'd like to close by acknowledging that with nearly $1 billion of available liquidity combined with our investment grade balance sheet, we are well positioned to execute on our plan. With that, I'll hand it back to Christine. Christine Healy, President and CEO Thank you, Jeff. Northland Power's strategy is simple: build in markets where we have earned the right to operate and then operate well.

The progress we've delivered this quarter demonstrates that strategy in action. We have reaffirmed full-year guidance. Baltic Power is generating power for the Polish grid. Hai Long is fully contracted and financed.

Jurassic BESS is in the final stages of commissioning, and construction is underway on Kamenka and Micislawo, our two Poland BESS projects. Operational reliability continues to be strong. Simply put, we are efficiently and effectively delivering. As we look ahead, the second half of 2026 will be defined by two milestones.

We expect both Baltic Power and Hai Long to have all turbines generating, marking the start of contracted cash flow after years of project investment and execution. With full-year guidance reaffirmed and major projects approaching commercial operations, Northland Power is well positioned to deliver long-term value. This concludes our prepared remarks. Operator, can you please open the line for questions?

OPERATOR Thank you. To ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster.

And our first question comes from Baltage Sidhu of National Bank of Canada. Your line is open. Baltage Sidhu, Analyst at National Bank of Canada Hi, good morning everyone. Just a few questions from me.

So there's been clearly strong momentum at Hai Long with effectively all of the turbines now installed, and if we look at the energy cadence since Q1, roughly, call it a couple of turbines per week, it would seem possible to have the full park energized by the end of September absent any weather or other disruptions. Is that a reasonable way to think about the remaining commissioning cycle? Christine Healy, President and CEO Yeah, go ahead, Baltaj, thanks very much for the question. I'm going to say to you nothing's done until it's done because we're in project land, but the teams are executing very well.

I see the same pattern that you mentioned there, that the performance has been good, the execution has been good. We have had some weather that's rolled through. The teams have adapted to that quite well. So we see things on track and you can see we're getting pretty close to the finish line on that.

Jeff Hart (Chief Financial Officer) Yeah. And I think, Balta, I'd just add on that we are consistent with that, and we articulated I think last quarter that we expected all the turbines to be turning in Q4. So it's good to see that progress and we're pleased by it. Baltage Sidhu, Analyst at National Bank of Canada Great.

And just a follow-up for you, Jeff. Great to see the refinancing earlier this week. Just given if the current energization pace continues, does that change how you're thinking about the PCR shortfall, appreciating that winds are strongest in Q4 and Q1?