Q3 2022 Northland Power Inc Earnings Call
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
[music].
Yeah.
Yeah.
Ladies and gentlemen, thank you for standing by and welcome to this Northland Power conference call to discuss the 2022 third quarter results. During the presentation. All participants will be in a listen only mode. Afterwards, we will conduct a question and answer session at that time. If you have a question. Please press star one.
One one on your telephone.
As a reminder, this conference is being recorded Thursday November 10, 2022 at 10 a M.
Conducting this call for Northland power are Mike Crawley, President and Chief Executive Officer.
Leanne, Adam Chinn, Donnie Chief Financial Officer, Ed <unk>, Senior director of Investor Relations and strategy before we begin northern's.
Management has asked me to remind listeners that all figures presented 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.
Casted results. Please read the forward looking statements.
Yesterday's news release announcing Northland.
<unk> results and be guided by its contents in making investment decisions or recommendations.
Elyse is available at Www Dot Northland power Dot com.
Now I'll turn the call over to Mike Crawley. Please go ahead.
Thank you Josh and good morning, everyone. Thanks for joining US today also joining us on the call is David Powell Executive Vice President of development to answer any of your questions on our development activities.
This morning, we will review our financial and operating results for the third quarter of 2022. Following our prepared remarks, we're going to take questions from analysts and look forward to addressing your questions.
To kick things off as we always do I want to reiterate that the health and safety of our employees and stakeholders always comes first a rigorous adherence to our health and safety protocols to ensure the safety of our employees, while also allowing us to maintain high levels of availability at our facilities.
We continued our strong performance in the third quarter, delivering solid operating and financial results supported by high power prices in Europe that benefited our offshore wind facilities in the North Sea and continued.
Strength across the rest of our portfolio as well.
Looking at the headline numbers in the quarter, we delivered adjusted EBITDA of $290 million, which was an increase of 38% or $79 million compared to the same period last year.
Similarly for adjusted free cash flow per share and free cash flow per share we achieved 28.
And <unk> 19, respectively in the quarter compared to 15 cents and.
<unk> in the same period a year ago.
Our financial and operating performance in the quarter continues a strong pattern of performance. We have delivered thus far in 2022 and as noted in our press release yesterday, we are reaffirming our full year 2022 financial guidance previously.
Previously updated moved up in August along with our second quarter results at that time.
A key driver behind this has been our strong operational performance not only in the quarter, but year to date and the strength in European power prices during the quarter.
We do utilize the higher power prices and the resulting higher realized cash flow across our portfolio to reinvest this cash flow and the development of additional renewable energy capacity and to proactively deleverage some of our assets to enhance the long term cash flow and economic returns of those facilities.
In aggregate, we refinance over 3 billion Canadian dollars of project debt at our Gemini and Spain facilities using a higher cash flows generated in 2022.
These actions will ensure the performance of these assets remain resilient going into the next several years.
While power prices in Europe have retreated somewhat in the near term.
The emphasis on long term energy security and the need to accelerate the move from reliance on fossil fuels.
Towards renewable energy sources remains unchanged as a global leader in renewable energy development with the significant operational and development footprint in Europe Northland remains ready to contribute to the growth in renewable energy and energy security for the continent.
And indeed, we're doing that with our north Sea cluster, Scott when Baltic power and other projects that we have under development in Europe .
Turning to our development activities at a high long project in Taiwan, We continue to progress the project closer to the start of construction, we executed substantially all of the key contracts with suppliers for various elements of the projects project, including turbine foundations cable arrays in both onshore and offshore Substations the project.
Also signed a supply agreement of the seat for the Siemens a 14 megawatt turbine that it will be using along with a 15 year service contract covering offshore wind logistics and operations and maintenance.
Following the signing of the corporate PPA for high long two D and three in July efforts have focused on securing non recourse project level debt finance, which has garnered strong lender interest from various global and local financial institutions.
While the project continues to progress delays in finalizing that corporate PPA.
Longer than <unk> and longer than expected negotiations related to the supply contracts.
Pushed back the launch of project finance and slowed its initial progress the project finance. However, it is now progressing well.
And we expect to financial close to occur, though in 2023, rather than in 2022.
The delay in financial close is not expected to impact commercial operations for the project.
In Poland, our 200 megawatt Baltic power offshore wind project has also been making significant progress in securing key elements within its supply chain. The projects signed several preferred supplier agreements for wind turbines export cables in the offshore and onshore substations.
Project will utilize 76 turbines each with a capacity of 15 megawatts to be supplied by Vestas. These turbines are currently the largest turbines available on the market.
The project continues to work on securing the remaining key elements and service contracts for the wind facility.
At the North Sea cluster North Sea too one of the projects within the cluster was also pre selected for funding by the EU Innovation Fund and was awarded a grant of 95 million euros.
The grant was awarded projects driving technical technological advancements as part of their development. This brand will be used at north sea two to demonstrate the technical and commercial feasibility of producing hydrogen at sea.
Now shifting gears to our construction activities are two onshore wind projects in New York State Ball Halen Bluestone, which are currently in construction.
Have experienced delays that impacted their construction timelines at bluestone all turbines have been delivered all foundations are complete and turbine installations, which are well advanced continued through the quarter and are expected to be completed by the end of the year. However, interconnection final commissioning are now expected to follow in early 2023.
Hi.
At ball he'll supply chain issues have resulted in a delay.
Just turbine deliveries.
Although.
And as a result commercial operations is now expected to occur in 2023.
All of the turbines however have been delivered to port.
We also finalized the tax equity commitment for the two projects the first ever for Northland as part of the long term funding plan for the project.
We continue to be active in New York State, having assembled a strong team on the ground to grow our development ambitions in the United States and in particular in that state.
Turning to operations, we are particularly proud of our German operations team and leading a very successful bearings replacement campaign at North Sea. One the team was able to replace all 54 turbines main bearing assembly can all 54 turbines on budget and ahead of schedule, thus maximizing the potential for revenue generation in the fourth quarter of <unk>.
'twenty two.
Cost of the campaign were fully covered by the warranty bond settlement proceeds received in the 2020.
In 2020 related changes the warranty obligations of North sea ones turbine manufacturer.
To conclude despite the global uncertainty and macroeconomic pressures we are facing we continue to deliver strong operating and financial results and continue to execute on our strategic plan with our key projects achieving milestones as we move the project closer to their financial close.
Northland plays a key role in helping our markets around the world achieve energy security and our development teams are working hard to identify additional opportunities in our current markets to help accelerate the build out of renewable energy.
<unk> capacity overall.
And help Northland scale up with that I will now turn the call over to Pauline for a more detailed review of our financial results.
Thank you, Mike and good morning, everyone.
Last night Northland Power released operating and financial results for the third quarter of 2022.
Our financial performance in the quarter with solid where we generated healthy results for adjusted EBITDA adjusted free cash flow and free cash flow.
These results were supported by strong performance across our operating portfolio and higher market prices in Europe , which benefited our offshore wind facilities as well as our onshore facilities in Spain.
Looking at our financial results in the quarter, we generated adjusted EBITDA of approximately $290 million, representing an increase of 38% or $79 million compared to the same period last year.
Key factors that contributed to the higher EBITDA year over year included a $72 million increase in operating results at our offshore wind facilities in the North sea, primarily due to higher realized market prices and stronger wind resource compared to one youre right, though.
At $9 million increase in operating results.
Early due to rate Escalations at ADESA and higher wind resource at the Canadian renewable facilities and a $6 million increase in contribution from the Spanish renewables portfolio as a result of a full quarter of contribution compared to a partial quarter in 2021.
This strength was slightly tempered by a $17 million decrease in operating results due to the lost contribution from the expiry of the PPA and subsequent sale of the aircraft fall as natural gas facility in April of 2022.
With respect to our free cash flow and adjusted free cash flow Northland generated approximately $44 million and $66 million in the quarter respectively.
This compares to $11 million and $35 million in the same period a year ago.
As a reminder, our definition of adjusted free cash flow excludes early stage growth related expenditures as we believe this provides a better representation of our long term run rate for free cash flow for investment decisions.
The significant significant contributors to higher cash flow in the quarter resulted were.
$79 million increase in overall contributions across all facilities, leading to a higher adjusted EBITDA and $10 million increase primarily from the net proceeds of the refinancing and these increases were primarily offset by $27 million increase in current taxes, primarily at our offshore wind facilities for healthy.
And better operating performance.
Cash flows were also reduced by higher debt repayments in the quarter associated with the restructuring of our Gemini and Spanish portfolio debt facilities, the incremental debt payments amounted to $41 million in the quarter and were funded from cash flow generated as a result of higher realized power prices.
On a per share basis. These figures translated into free cash flow of 19, <unk> and adjusted free cash flow of 20 cents in the quarter compared to free cash flow of <unk> and adjusted free cash flow of 15 the.
The same time last year.
With respect to our balance sheet Marlin remains in a strong position with ample liquidity to fund our current projects.
Has that November nine we had access to approximately $1 $2 billion of cash and liquidity comprising $700 million of liquidity available on our revolving facility and $5 million corporate cash on hand to help us pursue our growth initiatives.
We continue to prudently manage our balance sheet, taking proactive actions to further enhance our cash flow bolster our corporate liquidity and ensure that Northland remains in a good position to weather the impacts from economic uncertainty.
As noted previously Northland uses additional sources of liquidity to fund growth and capital investments, including proceeds from our ATM program.
In early September we renewed the program, which allows us to issue up to $750 million of common shares at the Companys discretion since instituting the program in early March of this year, we have generated over $700 million of additional liquidity at an average price of $42 11.
To fund projects that are expected to achieve financial close in 2023.
As Mike alluded to earlier and subsequent to quarter end.
We proactively restructured $3 $1 billion of debt, including our Gemini offshore wind facility and our Spanish onshore portfolio.
The restructuring will optimize the debt profile for each facility.
Resulting in compression of loan margins enhanced cash flow profiles in the coming years and improvements in the economic values for the assets.
As a result of the restructuring both facilities incurred higher debt repayments in 2022, with an $82 million payment at the Spanish portfolio.
Gemini that debt repayment will reduce our adjusted free cash flow by $68 million at Northland sure.
In both instances the repayments were fully made from higher cash flow generated as a result of the higher market prices realized in the year and will not impact Northland available liquidity.
We pursued these financings on accretive terms to Northland also deleveraging and Derisking, our future cash flow profile on the two assets.
Both restructurings are also considered green financing in accordance with Northland screen financing framework.
Full details on each facility restructuring is available in our third quarter press release and within the MD&A and our financial report both of which can be accessed on our website.
So successfully finalize our first ever tax equity financing for Northland, securing an equity commitment with a leading U S financial institution for the 108 megawatt ball Hill, and 112 megawatt bluestone onshore wind projects in New York State.
Commitment will provide tax equity investment of up to USD $190 million or approximately $250 million Canadian to assist with funding the projects.
Following the conclusion of the tax equity investment at commercial operations. The long term structure of the projects will be comprised of tax equity back Levered nonrecourse debt and equity to fund approximately Canadian $600 million of capital cost for the projects.
Turning to our 2022 financial guidance as noted in our press release with the strong operating and financial performance in the quarter and year to date, we are reaffirming our financial guidance for 2022.
For adjusted EBITDA, we expect to generate between 125 billion and $135 billion. This year for free cash flow per share, we expect the range to be $1 40.
And to $1 60, while for adjusted free cash flow, we expect to generate $1 85 to $2 <unk> per share. These ranges include the higher debt repayments mentioned earlier relating to the restructuring of the Gemini in Spain portfolio debt.
The revised range is factor in the potential impacts from the implementation of price caps in wholesale electricity prices in Europe . The price caps are being implemented in response to the surge in wholesale electricity markets. The EU Council established the cap on market revenues of 180 euros per megawatt hour effective December one two.
22 through to at least June 30 of 2023.
Each member state within the EU has an obligation to implement the cap and the flexibility to adapt the EU structure based on the structure of their individual markets, depending on how each EU state member finalize its implementation mechanism there is potential for impact to Northland financial results.
Our 2022 financial guidance has been reaffirmed and includes management's interpretations of the current proposed legislative and regulatory changes, even though they are subject to change and have not yet been finalized are enacted into law.
In conclusion, we delivered strong results in the quarter through the first nine months of the year. This performance has allowed us to maintain our financial guidance for 2022, despite all the puts and takes.
We continue to proactively manage our balance sheet implementing various initiatives to increase our financial flexibility enhance future cash flows and ensure that we remain in good financial shape. Despite economic uncertainties in the global markets I will now turn the call back over to Mike for his concluding remarks.
Thank you Kelly.
We had a very good quarter.
Sorry, Paul I can walk you through we had a very good quarter and a strong nine months first nine months of the year in 2022, we look forward to finishing off the year strong with projects nearing near nearing key milestones over the coming months and we are very excited about the continued growth of north Platte.
Longer term our teams continue to actively source new growth opportunities to help accelerate the build out of renewable energy capacity and further grow our global position as a leading renewable energy producer. This concludes our prepared remarks, we'd now be happy to take your questions. Josh. Please open the line for questions.
Thank you ladies and gentlemen, if you would like to register a question. Please press star one on your telephone if you are using a speaker phone. Please lift your handset before entering your request.
One moment please for the first question.
Okay.
Our first question comes from Rupert <unk> with National Bank You May proceed.
Hi, good morning, everyone.
Hi, Robert.
You discussed your liquidity position and the repaired prepared remarks is this enough to fund your equity needs for construction next year, including high long end.
And Baltic if we don't see slowdowns and would you still consider doing sell downs.
It is enough to fund all of the capital requirements for high long.
With or without sell downs in terms of our liquidity current liquidity position.
And.
And we haven't yet talked to.
The market about what our funding plan is for Baltic power beyond that.
Okay, great how much equity do you anticipate you will need going forward for four high loan demand.
I don't think we've stated an exact amount I think as Mike noted I think what he stated was that we we have the equity release for high long under various different scenarios.
Okay.
What can you say about potential for sell downs is everything still on the table and are you seeing.
Is there any evolution in the market demand for.
For investment into development assets.
I think the demand is stronger than ever I think we're seeing very solid demand for.
The assets in our portfolio, both early stage assets and assets that are approaching financial close.
So we're very encouraged by the demand that we're seeing in that in the conversations that we're having globally.
And our various markets and I think in our public disclosures, we did say that.
Still working towards achieving this.
Sell down.
<unk>.
To bolster liquidity and monetize the value.
Timing is and this type of market timing is tougher to pin down, but we're still aiming towards 2022 2023.
Alright excellent I'll leave it there thank you very much.
Thank you.
Thank you one moment for questions.
Our next question comes from Sean Stewart with TD Securities You May proceed.
Thank you and good morning.
Question for Paul in with respect to the price cap in Europe .
You mentioned the potential to impact results in.
And this being factored into the guidance.
Just trying to understand does that envision any potential clawback in the Netherlands or in Spain.
Sure.
Revenues you would have collected.
So far this year.
Yeah, and so the one thing I will caveat that the situation is changing.
Changing daily every day, we get a piece of new information that results in a slightly different calculation of what the outcomes may be in at this point it may be because we're interpreting what hasnt yet been proposed or finalized. So I think at this time based on the scenarios that we've run we have reaffirmed guidance based on the knowledge.
We have.
Most reasonable assessment of all of the information that's available in the market at this point.
Okay. So are there can you say if there is a clawback envisioned in that or not.
I think we'd prefer not to say I think.
Whether it's a claw back or a change in.
No.
How we can.
Get access to market prices I mean, there's a whole bunch.
A bunch of different scenarios would that would impact our financial results. So I think all we're saying is this contemplated various different scenarios and reaffirmed our guidance.
Okay.
Thanks for that.
There was mentioned in the MD&A around a realignment of the business units and it sounds like there is more to come on that Mike can you give us any sense of what youre thinking.
With respect to that and how this.
Restructuring.
Segments might look.
Yes.
I would describe it more as.
Evolutionary and revolutionary in terms of how we're reorganizing the business, it's a bit of a continuing evolution over the last four or five years as the company has grown globally and has grown in different asset classes.
To organize to organize ourselves in a way to both operate and develop more efficiently. So.
More to come in the new year, but simply spoken it's it's looking at.
Reorganizing some teams more along the lines of the asset classes are into.
Asset types or the types of generation so that they can work more closely together and collaborate more closely together to even better develop our projects and even better operator projects as well and get more end to end better end to end accountability as well.
Okay. Thanks for that.
Alright, I will get back in the queue.
Thank you one moment for questions.
Okay.
Our next question comes from Nelson <unk> with RBC Capital Partners markets. You May proceed.
Great. Thanks, just a quick question on on high long. So you mentioned that it's been delayed to 2023.
Are you talking about just like a few months delay going into Q1 or something potentially longer in terms of the delay.
I think what we're.
We are indicating is that there's a delay and if you look back to.
Two halfway through the year I think there is a lot of anticipation.
And.
Around the corporate offtake and it did take longer to negotiate so that added a bit of time before we could actually launch the financing.
What I can say clearly now is that the financing is moving along well lots of interest.
From international and.
And local banks.
And.
All we can say at this point as we expect it to move into 2022, rather than being finished at the end of 2022.
Okay. Thanks, and then you.
You mentioned that you have pretty much signed the majority of.
Equipment contracts and supplies so are the.
Equipment contracts in euros or U S dollars and I know currency has moved a lot.
Over the past year.
And Theres, a theres a lot of moving parts, so I'm not sure if.
A stronger or weaker euro or U S dollar helps or hurts the economics in any way.
Supply contracts are in multiple currencies.
So.
Yes.
Theres not a pronounced impact one way or another with movement in.
The one currency and weakening in another currency because they are spread out across multiple currencies.
Okay got it typically obviously linked contracts when contracts are executed hedges were put on at the same time as well.
Okay got it so no hedges that things kind of locked in today, but I'll ask financial close everything will be locked in in terms of.
FX and interest rates.
So to be clear I think there's two components. One is the FX on the cost side, which we know once we <unk>.
Got into contracts, we would look to enter into hedges simultaneously. The other piece is working on the financing right now obviously as we get closer to securing finance commitments is when we can put on the hedges in place.
Okay got it.
And then just moving to North Sea two can you give a bit more color on the.
<unk> project or are you essentially adding a.
Are you getting paid to add to electrolyze or and can you just give us a bit more details in terms of what youre looking at there.
Yes.
It's to add an electrolyzed her to produce hydrogen.
Sure to offset fuels that are used for vessels and.
And for backup generation Thats turbine locations so it.
It's taking a.
Zero carbon.
Generation that some ancillary to use carbon based fuels to decarbonize it even further.
Okay, and then just sticking on the hydrogen topic I know the Canadian government has a tax credit for hydrogen and the Canadian government has talked about exporting hydrogen.
I guess longer term.
Are you exploring hydrogen opportunities in Canada, and particularly the east coast in terms of.
In terms of.
Looking at opportunities therefore hydrogen development in export.
Yes, I think we've.
We've.
There have been news reports certainly about to some of our development activities.
Activities, along the east coast of Canada, looking at different opportunities out there both in Newfoundland and Nova Scotia.
In a scenario where we are.
Would have interest.
Okay great.
And just finally in terms of the investment tax credit more generally for Canada.
Are you seeing are you shifting or adding additional bodies into Canada in terms of focusing on developments, whether it's in Quebec, or Ontario or other regions.
Has that kind of shifted your focus in terms of geographies.
We see lots of opportunity in Canada.
Domestic market.
<unk> denominated cash flows.
We have a lot of developers and.
People with expertise in the markets, but also in creating and developing assets in those markets, whether it's in Western Canada, Eastern Canada, Ontario, or Quebec. So, yes, we're watching it closely mirrors theres three interesting things that are going on there.
And a number of provinces.
Regulators and system operators are recognizing the need for capacity and are moving forward with the procurements and different initiatives to secure more capacity.
Secondly, as you pointed out there's.
Some.
Interest at this point, what I want to overstate it but interest at this point in Europe to import green.
Green hydrogen green ammonia from Atlantic, Canada from renewable energy facilities to be constructed in Atlantic Canada going forward. So that's that's of interest and then the.
Investment tax credit announcement, which we received which is we think was very positive.
It will be confirmed in the spring budget.
It's.
Helps facilitate both of those activities right and it puts Canada on a competitive footing globally, particularly in relation to the.
Uh huh.
Place and reduction act measures in the U S.
Great. Thanks, Mike I'll leave it there.
Thank you one moment for questions.
Our next question comes from Mark Jarvi with CIBC you May proceed.
Thanks, Good morning Arun.
Moving back to a high long with a number of the contracts signed including turbines in the balance of plant health costs come in relative to the $7 billion to $8 billion number you guys outlined at Investor Day.
We're still in that range.
Correct.
And then.
Taiwan had an RFP for more procurement there is that something you guys are actively participating in just sort of the appetite for more development in that market right now.
Yes, so I think.
You would expect that.
I think we've already indicated that we have other projects under development in Taiwan and.
There was bids they were bid submitted.
Months with two or three months ago and I. Thank you.
You should not be surprised if we were one of the bidders that are in.
In that process.
And then you guys are obviously not going to say a ton of detail on a sell down but just conceptually with the sell down the only tied to the pylon projects or the development assets as well it could be packaged into a potential sell down or those be completely separate processes for any partnerships or sell downs.
Yes, I wouldn't get into that kind of detail right now.
Okay, we'll leave it there thanks Mike.
Thanks.
Thank you one moment for questions.
Our next question comes from David <unk> with Raymond.
Raymond James You May proceed.
Thanks, Good morning, everyone. Maybe just a question for me on what Youre seeing in the supply chain currently it sounds like you're.
Clearly out there arranging a lot of agreements for supply of elements. Just wondering wondering what you've seen over the past.
A few months in terms of how things will develop there.
Yeah. Good question I mean to be candid, David I think what we saw last.
Kind of a spring was.
A lot of movement.
In the supply chain.
For a number of reasons.
I think over the last few months, we're seeing things kind of settle down a bit.
But we're very focused on.
Scarcity scarcity of.
Certain.
Capacity.
Capacity at certain fabrication for certain fabrication facilities scarcity on vessels silver.
Really trying to be proactive and make sure that we get ahead of things on particularly on some of our larger offshore wind projects, which are which I highlighted with respect to what we're doing on Baltic power on the call today.
Excellent thanks for that and maybe just one more for me.
Just curious.
You're kind of earlier stage development project in Korea in Japan.
What kind of.
Milestones you think you could see there maybe over 2023.
I would say in both cases continued development activities I wouldn't I wouldn't get into a lot more detail than that I think we've had some good progress.
Korea, and securing our electricity business licenses, which is essentially site exclusivity, which allows you to move into.
Exploring and negotiating interconnection.
Advancing your environmental permitting so we expect to see that continue to move forward both on the existing sites, where we have <unk> moving forward with those activities.
Other sites, we would hope to be able to secure additional EPS.
We'll see how we'll see what 2023.
<unk> brings forward, but we've got a very good team on the ground there.
Excellent thanks for that I'll turn it over.
Okay.
Thank you, ladies and gentlemen, as a reminder to register for a question press the Star one one.
Our next question comes from Justin strong with Scotiabank you May proceed.
Good morning, guys.
Just a quick one from me.
Just wondering if you could speak to kind of the market conditions that contributed to the delay in.
Hi lines financing and just a little bit of color on kind of more color on where you are currently out there and.
Kind of associated.
The macro environment that you're better youre looking at whether it's improving.
Yes.
Yes.
There were a few factors right so.
Negotiating with CPA, which is the first CPA, that's north Ns ever negotiated and it's 744 megawatt corporate offtake, which I think is among the largest foreseeing if not the second largest I think in the world that's been negotiated so far so.
Yes, I think it took a bit longer than we anticipated to work it out and to work out on terms that were both acceptable to our off taker and acceptable to us.
So we took the time to do that right and to be careful and thoughtful about how we negotiated such a large important contracts. So that took a book.
A few more months than we'd expected and as you can imagine you can't really launch a financing until you have all of your revenue contracts in place. So that was probably the major delay it.
I would say on the.
Station of the some of the contracts I referred to in the last question that the.
Again to be candid that last spring there was kind of a fair amount of kind of movement amongst certain suppliers as they react to the kind of more macroeconomic conditions globally.
That did settle down but it did take us some time to just get all of those contracts finalized longer than we would have normally seen and finally, just given kind of what's going on with macroeconomic conditions globally.
We're just finding that theres, a more scrutiny from lenders in the Q&A process, which is typical of any project financing is.
Probably a bit more rigorous than it typically is so it's taking a bit longer but those would be the main the main factors I would say.
Great. Thanks, that's all for me.
Okay. Thank you one moment for questions.
Our next question comes from Ben Pham with BMO you May proceed.
Hi, Thanks, good morning.
Maybe start off on on high long post financial close can you walk through the.
The next milestones how long it takes to construct and anything else along the way.
Yes, so I mean, most of the 2023 would be primarily fabrication activities for the <unk>.
The offshore substation for the jackets for AR.
Starting some work on the cables and and then 24 and 25 would be when you'd see the in water construction activities.
Move forward.
High level.
Okay.
And then.
The delays youre seeing.
Hi, long, which.
Probably.
Got a couple.
As well is that going to be applicable to.
Yet our projects like Baltic power in North Sea.
Hi, I don't think so.
C C.
See how the world unfolds over the next few months, but I think on Baltic power.
<unk>.
That's why in the opening remarks I wanted to highlight where we are at in locking down our supply chain.
<unk>.
I would say are certainly further ahead on that project than we were at the same time.
<unk>.
Hi, long, so I think we feel much better about the.
The schedule and getting to financial close.
No.
Around the time that we've we've indicated to the market on that project.
Okay, Great and then maybe on.
Next on the funding side.
Has anything changed since.
Maybe <unk> and at your Investor day on that that 10% to 15%.
Composition of equity needs flash asset monetization.
Okay.
You mean, the funding Pie chart that we've shown I mean that the targets in terms of.
The equity needs in the I mean, I don't think.
Okay.
The total has changed I think we said within that component, how we raise that equity between.
Sell downs and new equity is is a fluid situation and that remains to be the case, but that we're still targeting still targeting sell downs and having some fun.
Okay. So that.
I know, it's illustrative, but if I may not assuming capex stays the same it's still one or $2 billion.
Through 2026 or is that different now because of the the market condition change.
And in the quarter.
As we add new projects I mean that number changes right. So every investor day, we would update that number but I think so far if you're looking at the same project pool.
Yes, I mean that number.
I would say hasn't changed materially, but as we add new projects that number does change and we'll give you an update at the.
At <unk> upcoming Investor day.
Okay.
Okay, great. Okay. Thank you.
Okay.
Thank you Mr. Carley there are no further questions at this time I will now turn the call back to you.
Okay. Thank you.
To everyone of you for everyone for joining US today, we will hold our next call. Following the release of our fourth quarter and full year 2022 results in February in the meantime, we thank you for your continued confidence and support have a good day everybody.
Ladies and gentlemen that does conclude the conference call for today. Thank you for participating and have a pleasant day.
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
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