Q1 2024 Northland Power Inc Earnings Call

Operator: Welcome to the Northland Power Conference call to discuss the first quarter 2024 results. As a reminder, this conference is being recorded on Thursday, May 16th, 2024 at 10 a.m. Eastern Standard Time.

Okay.

Welcome to the Northland Power conference call to discuss the first quarter 'twenty 'twenty four results. As a reminder, this conference is being recorded on Thursday May 16, 2024 at 10, a M Eastern standard time.

Mike Crawley: We are conducting this call for Northland Power by Mike Crawley, President and Chief Executive Officer, John Brace, Executive Chairperson, and Adam Beaumont, Interim Chief Financial Officer. Before we begin, Northland'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 not subject to various risks. The actual results may differ materially from management's expected or forecasted results.

Speaker Change: Conducting this call for Northland power are Mike Crawley, President and Chief Executive Officer, John Brace Executive Chair, and Adam Beaumont interim Chief Financial Officer.

Speaker Change: Before we begin Northland <unk> 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 not subject to various risks.

Speaker Change: Actual results may differ materially from management's expected or forecasted results. Please read the following the forward looking statements section in yesterday's press release announcing Northland Power's results and be guided by its content, when making investment decisions or recommendations. The release is available at www Dot Northland.

Mike Crawley: Please read the following forward-looking statements section in yesterday's press release announcing Northland Power's results and be guided by its content when making investment decisions or recommendations. The release is available at www.northlandpower.com. I will now turn the call over to Mr. Mike Crawley. Please begin, sir.

Power Dot Com I will now turn the call over to Mr. Mike Crawley. Please begin sir.

Mike Crawley: Okay, thank you very much and thanks to everybody for joining us this morning. As always, I'd like to start by taking a moment to emphasize that the health and safety of our people is our top priority at Northland. We have three construction projects now well underway, and we now have close to 50 well-trained health and safety professionals working closely with our project teams, our contractors, and our partners to ensure that our health and safety program is best in class.

Speaker Change: Okay. Thank you very much and thanks to everybody for joining us this morning.

Mike Crawley: As always I'd like to start by taking a moment to emphasize that the health and safety of our people is our top priority at Northland.

Mike Crawley: Three construction projects now well underway and we are now close to 50, well trained health and safety professionals working closely with our project teams, our contractor and our partners to ensure that our health and safety program is best in class.

Mike Crawley: So now jumping to our quarterly updates, we had a strong start in 2024 with first quarter financial results better than expected. Our results were higher than last year, primarily due to higher wind resources across all offshore wind facilities, as well as the contribution from our New York onshore wind facilities, which began operating in October of 2023. All our operating offshore wind facilities experienced strong electricity production in the first quarter, with a Deutsche Bucht offshore wind farm in Germany achieving an all-time high production level.

Mike Crawley: So now jumping to our quarterly updates we've had a strong start in 2024 with first quarter financial results better than expected our results were higher than last year, primarily due to higher wind resources.

Mike Crawley: Cross all offshore wind facilities as well as the contribution from our New York onshore wind facilities, which began operating in October of 2023.

Mike Crawley: All of our operating offshore wind facilities experienced strong electricity production in the first quarter with Deutsche Boots offshore wind farm in Germany, achieving an all time high production level.

Mike Crawley: The strong operating performance results in our first quarter adjusted EBITDA of over 450 million. It's an increase of close to 30% or approximately $100 million compared to the same quarter of 2023. On adjusted free cash flow and free cash flow per share, they were $0.88 and $0.85 per share, respectively, in the quarter, compared to $0.72 and $0.62 per share, respectively, during the same period the year earlier.

Mike Crawley: The strong operating performance resulted in our first quarter adjusted EBITDA up over 450 million its an increase of close to 30% or approximately $100 million compared to the same quarter of 2023.

Mike Crawley: On adjusted free cash flow and free cash flow per share there were 88 cents and 85 cents per share respectively in the quarter compared to 72, and 62 cents per share respectively. During the same period a year earlier.

Mike Crawley: As noted in our press release yesterday, we're reaffirming our 2024 financial guidance and outcomes. Adam Beaumont will provide more details on financial information later in the call. So moving into construction updates, we continue to make good progress on our construction program for the two large offshore wind projects in Taiwan and Poland and the battery storage project in Canada. As you recall, on our Investor Day, we provided a great level of detail on what has been done and what are some of the critical milestones for all R3 construction projects. To illustrate how advanced the projects were, we gave a percentage of completion as we wanted to outline what had already been achieved as of December 31st, 2023 as a baseline.

Mike Crawley: As noted in our press release yesterday, we're reaffirming our 2024 financial guidance and outlook.

Speaker Change: Adam Beaumont will provide more details on financial information later in the call.

Speaker Change: So moving into construction updates we continue to make good progress on our construction program for the two large offshore wind projects in Taiwan in Poland and the battery storage project in Canada as you recall in our Investor Day, we provided a great level of detail on what has been done and what are some of the critical milestones for all our three <unk>.

Speaker Change: <unk> projects the.

Speaker Change: To illustrate how advanced the projects, where we gave a percentage of completion as we wanted to outline what had already been achieved as of December 31, 2023 at the baseline.

Mike Crawley: Moving forward, we'll report on the status of our key milestones on each of the three projects. This will give our investors and stakeholders a very good and ongoing overview of our construction program. With that, I'm going to start with our Heilong project in Taiwan.

Speaker Change: Moving forward, we will report on the status of our key milestones on each of the three projects. This will give our investors and stakeholders are very good and ongoing overview of our construction progress.

Speaker Change: With that I'm going to start with a high long project in Taiwan, It's one gigawatt offshore wind project, which is 36% owned by Northland continues to progress well.

Mike Crawley: This one gigawatt offshore wind project, which is 30.6% owned by Northland, continues to progress well. The project continues to make progress, with the fabrication of foundations, cables, and the onshore and offshore substations well underway. Turbine component manufacturing has also commenced. Offshore construction work has continued to advance with the installation of both offshore substation jacket foundations and pin piles, which are used to anchor the jacket foundations at multiple turbine locations. Other major components of the wind park are arriving in Taiwan, including turbine jackets and the first offshore substation topside, which is a substantial structure.

Speaker Change: <unk> continues to make progress with fabrication of foundations cables, and the onshore and offshore substations well underway.

Speaker Change: Turbine component manufacturing has also commenced the offshore construction work has continued to advance with the installation of both offshore substation jacket foundations and pin tiles, which is what's used to anchor in the jacket foundations at multiple turbine locations.

Speaker Change: Other major components of the wind park are arriving in Taiwan, including turbine jackets, and the first offshore substation top side with a substantial structure.

Mike Crawley: Full commercial operations are expected to commence in 2026-2027 according to the schedule. Overall, cost continues to be aligned with original expectations. Once operational, Hai Long will be one of the largest offshore wind facilities in Asia and will provide enough clean energy to power more than one million Taiwanese households, a standard metric used to measure output from a wind farm or renewable energy facility. And, of course, a lot of the growth and demand for energy in Taiwan is actually fueled by the technology sector there.

Speaker Change: Full commercial operations are expected to commence in 2026 2027, according to the schedule.

Speaker Change: We're all cost continues to be aligned with original expectations.

Once operational high long will be one of the largest offshore wind facilities in Asia and will provide enough clean energy to power more than 1 million Taiwanese households.

Speaker Change: Standard metric used to measure output from a wind farm a renewable energy facility.

So a lot of the demand growth and demand for energy in Taiwan is actually fueled by the technology sector there move.

Mike Crawley: Moving to Baltic Power, our 1.1 gigawatt offshore wind project in Poland, which is 49% owned by Northland. On that project, Baltic Power is one of the first large-scale offshore wind projects. Indeed, it's the first offshore wind project to go to construction in Poland, and it will play a key role in the country's energy transition and in the country's decarbonization program. The project continues to make progress on the fabrication of onshore and offshore substations, foundations, export cables, and interarray cables. Turbine manufacturing has also commenced, and the onshore substation construction is well underway.

Speaker Change: Moving to Baltic power are one one gigawatt offshore wind project in Poland, which is 49% owned by Northland.

Speaker Change: That project.

Speaker Change: It is.

Speaker Change: Baltic power is one of the first large scale offshore wind projects and deepest first offshore wind project to go to construction in Poland and it will play a key role in the country's energy transition and the country's decarbonization program.

Speaker Change: The project continues to make progress on the fabrication of onshore and offshore substations foundations export cables and internal rate cables for buying manufacturing as well has commenced and the onshore substation construction is well underway.

Mike Crawley: The full commercial operations are expected to commence in the latter half of 2026, which is according to the schedule, and the overall project cost continues to be aligned with the original expectation. So, lastly, the Oneida Battery Energy Storage Project in Ontario, which is 72% owned by Northland. This project is one of the largest battery storage projects in the world and will provide essential grid services and reliability to the Ontario electricity system.

Speaker Change: To full commercial commercial operations are expected to commence in the latter half of 2026, which is according to the schedule and overall project costs continues to be aligned with the original expectations.

Speaker Change: So lastly, the Oneida battery energy project storage project in Ontario, which is a 72% owned by Northland. This project is one of the largest battery storage projects in the world and will provide essential grid services and reliability to the Ontario electricity system. It's also important to note that this is an asset class that is <unk>.

Mike Crawley: It's also important to note that this is an asset class that is expected to see lots of growth over the next decade as grids seek to balance intermittent renewables. The project continues to make progress with its construction activities. All foundations for the battery packs and transformers have been installed. All battery packs, this is important, have been delivered to the site, and medium-voltage transformers have started to arrive as well.

Speaker Change: <unk> expected to see.

Speaker Change: Lots of growth over the next decade as bridge seek to balance intermittent renewables.

The project continues to make progress with its construction activities all foundations for the battery pack and Transformers have been installed.

Speaker Change: All battery packs. This is important have been delivered to site and medium voltage Transformers have started to arrive as well full commercial operations are expected to commence in 2025, which again is according to the schedule.

Mike Crawley: Full commercial operations are expected to commence in 2025, which is again according to the schedule. Overall, project costs continue to be aligned with original expectations for this project. As you can see, we have good momentum on our construction program, but we do continue to be vigilant, disciplined, and focused on these programs to ensure that these projects come in on time, on budget, and deliver the material boost in cash flow that NPI is expecting.

Speaker Change: Overall project costs continues to be aligned with our original expectations for this project.

Speaker Change: As you can tell we have good momentum on our construction program, but we do continue to be vigilant disciplined and focused on these programs to ensure that these projects.

Speaker Change: On time on budget and deliver the material boost in cash flow.

Speaker Change: That NPI.

Mike Crawley: As such, project execution for the company does remain our number one priority. Moving on to other significant first-quarter events, in March, we entered into an agreement to sell 100% of the 130 megawatt La Lucha solar facility in Mexico. The sale is expected to close in 2024 on satisfaction of customary closing conditions. And this transaction is all about rationalizing the markets that we're in, as well as recycling capital. And, as we said at Investor Day recently, we remain disciplined and prudent in managing our capital and financing needs, and we have no further requirement to access equity or debt markets for additional growth. And we will continue to be highly disciplined and selective in pursuit of any new opportunities and only move forward on such opportunities that demonstrate value accretion to shareholders.

Speaker Change: As expected.

Speaker Change: As such project execution for the company does remain our number one priority.

Speaker Change: Moving onto other significant first quarter events in March we entered into an agreement to sell 100% of the 130 megawatt la Lucha solar facility in Mexico.

Speaker Change: The sale is expected to close in 2024 on satisfaction of customary closing conditions. This transaction is all about rationalization of the markets that we're in as well as recycling capital.

Speaker Change: And as we said at Investor Day recently, we remain disciplined and prudent in managing our capital and financing needs and we have no further requirement to access equity or debt markets for additional growth.

Speaker Change: We will continue to be highly disciplined and selective in pursuit of any new opportunities only move forward on such opportunities that demonstrate demonstrate value accretion to shareholders.

Mike Crawley: Now, before I finish, as most of you are aware from our announcement at the end of March, the Board and I came to a decision in March that Northland would undergo a well-planned leadership transition over the next several months. So, as such, I will be transitioning out of my role as President and CEO effective September 30th. Now, it's not goodbye quite yet, but I do want to say on this call that it has been a great honor to work with such a talented and dedicated team at Northland over the last nine years, including six as CEO.

Speaker Change: Now before I finish as most of you are aware from our announcement.

Speaker Change: At the end of March the board and I came to a decision in March that Northland would undergo a well planned Peter.

Speaker Change: Leadership transition over the next several months so as such I will be transitioning out of my role as President and CEO effective September 30th.

Speaker Change: He is not it's not goodbye quite yet, but I do want to say on this call.

Speaker Change: That has been a great honor to work with such a talented and dedicated team at Northland over the last nine years, including six as CEO.

Speaker Change: We have all achieved a lot working together now.

Mike Crawley: We've all achieved a lot working together, and I'd like to thank all of our shareholders, partners, lenders, and employees for their trust and support over the years. All of these projects, these investments, and the strong availability that we've been able to deliver consistently from our operating facilities involve not just the employees of Northland but a lot of our partners and suppliers as well. As part of the transition plan, John Brace, who many of you know, has served as CEO of Northland from 2003 to 2018, and as board chair since 2019, will take on the role of executive chairman until the next CEO is selected and starts.

Speaker Change: Now I'd like to thank all of our shareholders partners lenders and employees for their trust and support over the years all of these projects these investments and and that the strong availability that we have been able to deliver consistently from our operating facilities.

Speaker Change: That involves not just the employees at Northland, a lot of our partners and suppliers as well.

Speaker Change: As part of the transition plan John brace. Many of you know has served as CEO of Northland from 2003 to 2018 as board Chair since 2019 will take on the role of executive Chairman until the next CEO is selected and starts.

Mike Crawley: Now, I've known John for over 20 years, and I think a number of you on the call would know him well as well. He's been a key figure in Northland's history and will provide strong leadership and guidance as interim executive chairperson during this transition period to act as a bridge between myself and the next president and CEO. It's almost like a relay race with me handing the baton to John, and then John handing that off to the next president and CEO, all to ensure that this transition moves as smoothly as possible with no impact on the business, and no impact on employees. So, on that note, I'll hand things over to John.

Speaker Change: I've known John for over 20 years, and I think a number of you on the call with no John well as well he has been a key figure in Northland history, and will provide strong leadership and guidance guidance as interim executive chair. During this transition period to act as a bridge between myself and the next president and CEO of it's almost like a re.

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John Mould: We handicapped that time to John and then John handing that off to the next president and CEO all to ensure that this transition moves as smoothly as possible with no impact on the business no impact on employees. So on that note I'll hand things over to John.

John Mould: Thank you, Mike, and good morning, everyone. I would like to start by expressing my gratitude to Mike for his outstanding leadership and immense contribution to Northland. As the board and I continue to attest, MICA has been instrumental in expanding our global presence, diversifying our portfolio, and developing our long-term growth pipeline. As Mike mentioned, the company is in a position of strength with growth locked in through 2027 and our major construction programs for Heilong, Alta Power, and Oneida well underway and all progressing according to schedule. As mentioned already, there are no changes to guidance or outlook for the year.

John: Thank you, Mike and good morning, everyone I would like to start by expressing my gratitude to Mike for his outstanding leadership and immense contribution to Northland.

John: The board and I continue to attest, Mike has been instrumental in expanding our global presence diversifying our portfolio and developing our long term growth pipeline.

John: As Mike mentioned the company is in a position of strength with <unk>.

John: <unk> locked in through 2027, and our major construction programs for high long ultra power in an idle well underway and all progressing according to schedule.

John: As mentioned already there are no changes to guidance or outlook for the year.

John Mould: And Northland remains extremely well-placed for the future as governments and corporations globally work towards their energy transition targets. And as Mike mentioned, through discussions between him and the board about the future, we felt that this was the right time to initiate a leadership transition, given the strong position of the company. As we go through this transition period, I want to emphasize that we remain committed to our strategy and priorities as presented at our recent investor day.

John: And Northland remains extremely well placed for the future.

John: As governments and corporations globally work towards their energy transition targets.

Speaker Change: And as Mike mentioned through discussions between him and the board of both the future. We felt that this was the right time to initiate a leadership transition given the strong position of the company.

Speaker Change: As we go through this transition period I want to emphasize that we remain committed to our strategy and priorities as presented at our recent Investor day.

John Mould: We will continue to focus on enhancing shareholder value and fostering strategic, accretive growth that builds on Mike's many successes. We are progressing with a comprehensive global search for our new president and CEO, with a top-tier executive search firm actively leading these efforts. We're targeting a leader who will align with our company's values, complement the exceptional talent that we have in Northland, and drive shareholder value as we prepare for our next phase of growth.

Speaker Change: We will continue to focus on enhancing shareholder value and fostering strategic accretive growth in billboards on mikes many successes.

Speaker Change: We are progressing with a comprehensive global search for a new president and CEO with a top tier executive search firm actively leading these efforts.

Speaker Change: We're targeting a leader who align with our company's values complement the exceptional talent that we havent Northland and drive shareholder value as we prepare for our next phase of growth.

John Mould: On behalf of the board and everyone at Northland, I would once again like to thank Mike for his dedication and service and wish him all the very best. Northland has a best-in-class leadership team who I've known for some time in my role as chairman and who I have now had the pleasure of working more closely with over the past month. Supplementing our leadership strength, we welcomed our newest addition to the executive team earlier this week, Toby Edmonds.

Speaker Change: On behalf of the board and everyone at Northland I would once again like to thank Mike for his dedication and service and wish him all the very best.

Find has the best in class leadership team, who I've known for some time and in my role as Chairman and who I have now had the pleasure of working more closely with over the past month.

Speaker Change: So implementing our leadership strength, we've welcomed our newest addition to the executive team earlier this week Tobey.

John Mould: Toby is the new Executive Vice President of our Offshore Wind Business Unit, whose primary focus will be on the successful project execution of Heilong and Baltic Power. Toby has an outstanding track record in offshore wind, and we are both fortunate and delighted to have him aboard. With that, I will now turn the call over to Adam, who will provide a more detailed review of our financial results.

Tobey as our new executive Vice President over offshore wind business unit was primary focus will be on the successful project execution of high long and Baltic power.

Speaker Change: Toby has an outstanding track record in offshore wind and we are both fortunate and delighted to have him aboard.

Speaker Change: I will now turn the call over to Adam who will provide a more detailed review of our financial results.

Adam Beaumont: Thank you, John, and good morning, everyone. Before jumping into the financial details for the quarter, I would like to echo John's remarks and thank Mike for his leadership. On a personal level, his mentorship has been invaluable, and his achievements will continue to fuel Northland's future success. Turning to the quarter, we are pleased with our strong results to start the year. Strong wind resources in the North Sea were the primary driver, with our projects in Germany experiencing one of the highest wind production quarters since it began its commercial operation. The strong winds also continued into April.

Adam Beaumont: Thank you John and good morning, everyone before jumping into the financial details for the quarter I would like to Echo John's remarks, and thank Mike for his leadership on a personal level. His mentorship has been invaluable and his achievements, we will continue to fuel Northland future success.

Adam Beaumont: Turning to the quarter, we are pleased with our strong results to start the year strong wind resources in the North Sea was the primary driver with our.

Adam Beaumont: With our projects in Germany experiencing one of the highest wind production quarters. Since it began commercial operations. The strong wins also continued into April.

Adam Beaumont: As a result, our financial results were better than the same quarter last year on all three of our key financial reporting metrics, adjusted EBITDA, adjusted free cash flow, and free cash flow. We generated adjusted EBITDA for the quarter of over four hundred and fifty million dollars, representing an increase of nearly 30 percent compared to last year. The key factors contributing to the higher adjusted EBITDA included a $71 million increase at our offshore wind facilities, primarily due to higher wind resources.

Adam Beaumont: As a result, our financial results were better than the same quarter last year on all three of our key financial reporting metrics adjusted EBITDA adjusted free cash flow and free cash flow.

Adam Beaumont: We generated adjusted EBITDA for the quarter of over $450 million, representing an increase of nearly 30% compared to last year.

Adam Beaumont: Key factors contributing to the higher adjusted EBITDA included a $71 million increase at our offshore wind facilities, primarily due to the higher wind resources.

Adam Beaumont: A $10 million decrease in development expenditures, partially offset by higher G&A costs. The focusing of our growth efforts on our identified key markets has enabled the reduction in development expenditures compared to the prior year, and the higher G&A relates to some one-time, non-recurring costs. Results were higher by $9 million from the New York onshore wind facilities, which achieved commercial operations in October of last year, and an $8 million increase in operating results at IBSA, primarily related to inflation escalation and the appreciation of the Colombian peso. However, the results were partially offset by $6 million lower results from our Spanish renewable portfolio, primarily due to the lower market prices experienced across Europe as a result of the warmer winter.

Adam Beaumont: A $10 million decrease in development expenditures, partially offset by higher G&A costs, the focusing of our growth efforts on our key are identified key markets has enabled the reduction in development expenditures compared to the prior year and the higher G&A relates to some one time non reoccurring costs.

Adam Beaumont: Thanks.

Results were higher by $9 million from the New York onshore wind facilities, which achieved commercial operations in October of last year, and an $8 million increase in operating results at observed primarily related to inflation escalation and the appreciation of the Colombian peso.

Adam Beaumont: The results were partially offset by <unk>.

Adam Beaumont: $6 million lower results from our Spanish renewable portfolio, primarily due to the lower market prices experienced across Europe as a result of the warmer winter.

Adam Beaumont: With respect to adjusted free cash flow and free cash flow, Northland generated approximately $226 million and $217 million, which is an increase of 25% and 41% from last year. The increase in adjusted free cash flow was primarily due to $85 million higher EBITDA from operations, net of growth expenses. This was offset by a $23 million increase in current taxes resulting from higher results at our offshore wind projects and a $15 million decrease primarily from foreign exchange head settlements realized last year.

Adam Beaumont: With respect to adjusted free cash flow and free cash flow Northland generated approximately $226 million and $217 million, which is an increase of 25% and 41% from last year. The.

Adam Beaumont: The increase in adjusted free cash flow was primarily due to $85 million higher EBITDA from operations net of broker expense says.

Adam Beaumont: Which was offset by a $23 million increase in current taxes, resulting from higher results at our offshore wind projects and a $15 million decrease primarily from foreign hedge foreign exchange hedge settlements realized last year.

Adam Beaumont: On a per share basis, these figures translated into adjusted cash flow of $0.88 and free cash flow of $0.85 in the quarter. This compares to adjusted free cash flow of $0.72 and free cash flow of $0.62 per share last year. As Mike noted earlier, we announced the sale of the Leloucha project in March. Upon closing, Northland expects to receive $205 million in cash after taxes and transactions. This will result in a small cash-on-cash gain.

Adam Beaumont: Yeah.

Adam Beaumont: On a per share basis. These figures translated into adjusted free cash flow of 88 and free cash flow of 85 six in the quarter.

Adam Beaumont: This compares to adjusted free cash flow of 70, <unk> and free cash flow of 62 cents.

Adam Beaumont: Per share last year.

Adam Beaumont: As Mike noted earlier, we announced the sale of diluted share project in March.

Adam Beaumont: Upon closing Northland expects to receive $205 million in cash after taxes and transaction fees. This will result in a small cash on cash.

Adam Beaumont: The proceeds are planned to be used to repay amounts drawn on our corporate credit facility and for general corporate purposes. Looking further to the balance sheet, as of today, Northland continues to be in a strong position with access to approximately $760 million of cash and liquidity. The liquidity is comprised of funds available on our revolving facility and corporate cash on hand. As Mike and John noted, we reaffirmed our 2024 financial guidance, which is adjusted EBITDA in the range of $1.2 to $1.3 billion, adjusted free cash flow per share of $1.30 to $1.50, and free cash flow per share of $1.10 to $1.30. Overall, it has been a good quarter underpinned by strong results and continued progress being made on the three construction progress projects. I will now turn the call back over to Mike for his concluding remarks.

Adam Beaumont: The proceeds are planned to be used to repay amounts drawn on our corporate credit facility and for general corporate purposes.

Adam Beaumont: Looking further to the balance sheet as of today Northland continues to be in a strong position with access to approximately $760 million of cash and liquidity.

Adam Beaumont: The liquidity is comprised of funds available on our revolving facility and corporate cash on hand.

Speaker Change: As Mike and John noted, we reaffirmed our 2024 financial guidance, which is adjusted EBITDA in the range of one two to one $3 billion adjusted free cash flow per share of $1 30 to $1 50, and free cash flow per share of $1 10.

Speaker Change: <unk> of $1 30.

Speaker Change: Overall, it has been a good quarter underpinned by strong results and continued progress being made on the three construction progress projects I will now turn the call back over to Mike for his concluding remarks.

Mike Crawley: Okay, thank you, Adam. And nobody joined the call to hear a bunch of executives talk about each other.

Okay. Thank you Adam and.

Nobody who joined the call to hear a bunch of executives talk about each other but I will say one thing about Adam is that the company is in very good hands with Adam.

Mike Crawley: But I will say one thing about Adam is that the company is in very good hands with Adam. As interim CEO, nobody at Northland knows the company better than Adam, has a deeper knowledge of how the company makes money, how the company operates, and is able to navigate through the company and pull people together to make things happen. And that was abundantly clear last year; we had a lot to get done, and we achieved it all. And all of us, including me, would never have been able to get that done without Adam standing with us.

Mike Crawley: As interim CEO nobody at North that knows the company better than Adam has a deeper knowledge of how the company makes money how the company operates and is able to navigate across the company and pull people together to make things happen and that was abundantly clear last year, we had a lot to get done he achieved at all.

Mike Crawley: And that's going to be very important for the company moving forward. And Adam is also, as you would know, on the call, very well connected to the market and is always a voice of the market within any discussion that we have at Northland. So, we've got a very solid start to the year. Both our strategy and long-term guidance remain unchanged.

Mike Crawley: And all of US, including me would never been able to get that done without Adam standing with us and that's going to be very important for the company.

Moving forward and Adam is also as you would know on the call very well connected to the market and it's always a voice of the market within any discussion that we have at Northland.

Mike Crawley: We feel good about the progress on our construction program so far, as you can probably tell, and it's going to materially increase our cash flow, but we do remain very focused and vigilant on execution. Our growth is locked in for the next three years to achieve a 7% to 10% EBITDA CAGR through 2027, and this is important because it means we don't need to tap equity markets, debt markets, supply chains, or originate new investment opportunities to reach our new-term growth targets.

So we've got a very solid start to the year, both our strategy and long term guidance remain unchanged.

Mike Crawley: Feel good about the progress on our construction program. So far as you can probably tell.

Mike Crawley: And it's going to materially increase our cash flow, but we do remain very focused and vigilant on execution. Our growth is locked in for the next three years to achieve a 7% to 10% EBITDA CAGR through 2027, and this is important because that means we don't need to tap equity market that market supply chains.

Mike Crawley: Or originate new investment opportunities to reach our new term growth targets do you need to execute on our construction program, but we don't need to go out and find anything else knew anything further that we may do well key discretionary incremental and disciplined and this is different than some of our others other peers in the sector.

Mike Crawley: We need to execute on our construction program, but we don't need to go out and find anything else new. Anything further that we may do will be discretionary, incremental, and disciplined. And this is different than some of our other peers in the sector. We'll only pursue additional projects, as I said earlier, that are accretive to our shareholders during this period.

Mike Crawley: Only pursue additional projects as I said earlier that are accretive to our shareholders. During this periods alright.

Mike Crawley: We have an established and talented team, and the progress we're making on constructing two large and complex offshore wind projects illustrates the strength of that team. We're also in the process, as I said earlier, of constructing one of North America's largest energy battery storage facilities. Our in-house talent demonstrates that we continue to have what it takes to be a leader in originating, developing, constructing, and operating large and complex renewable energy projects.

Mike Crawley: We have an established and talented team and the progress we're making on constructing two large and complex offshore wind projects evidenced the strength of that team. We're also in the process as I said earlier of constructing one of North America's largest energy battery storage facilities are.

Mike Crawley: Our in house talent demonstrates that we continue to have what it takes to be a leader in originating developing constructing and operating large and complex renewable energy projects.

Mike Crawley: You'll all have seen the recent announcements from our peers related to AI and data center growth, and demand growth for power. And like our peers, we see this as a very positive trend and trajectory for the industry overall. In 2022, data centers consumed approximately two and a half percent of total electricity in the US, just to give you one stat. And their portion of this is expected to triple to 7.5% by 2030. Now, this equates to the electricity consumption of about 40 million U.S. households, which is almost a third of the total nation's households in the U.S.

Mike Crawley: You will all have seen the recent announcements some of our peers related to AI and data center growth demand growth for power and like our peers. We see this as a very positive trend and trajectory for the industry. Overall in 2022 data centers consumed approximately two 5% of total electricity in the U S. Just to give you one stat.

Mike Crawley: And data centers portion of this is expected to triple to seven 5% by 2030 now this equates to electricity consumption of about 40 million U S households, which is almost.

Mike Crawley: The total.

Mike Crawley: Nations households in the U S.

Mike Crawley: So, we are tracking this growing demand for power closely, and we do have the talent to execute large and complex PPAs, as has already been demonstrated by the 744-megawatt corporate PPA that we entered into on the Heilong Offshore Wind Project, which at the time, I think, was one of the largest, if not the largest, corporate PPAs in the world. We have a large and exciting pipeline, of which 2.4 gigawatts is currently under construction. The world needs a lot more power generation built over the next 10 to 15, 20 years. And that's exactly what we do, and that's what we do at scale.

Number of households in the U S.

Mike Crawley: So we are tracking this growing demand for power closely and we do have the talent to execute large and complex ppas.

Mike Crawley: As has already been demonstrated by the 744 megawatt corporate PPA.

Mike Crawley: We entered into on the high long offshore wind project, which at the time I think was one of the largest not the largest corporate PPA in the world.

We have a large and exciting pipeline of which two gigawatts currently under construction the world needs a lot more power generation built over the next 10 to 15 20 years and that's exactly what we do and Thats. What we do at scale. We are excited about the future. This brings to Northland, our shareholders and our <unk>.

Mike Crawley: We are excited about the future this brings to Northland, our shareholders, and our stakeholders. This concludes our prepared remarks, and we'd now be happy to take your questions. Please open the line. Thank you.

Speaker Change: Take holders. This concludes our prepared remarks, and we'd now be happy to take your questions. Please open the line.

Operator: Thank you. To ask a question, you'll need to press star 1-1 on your telephone. To withdraw your question, please press star 1-1 again. Please wait for your name to be announced. Please stand by while we compile the Q&A roster. One moment for our first question. Our first question will come from the line of Eli Rodney with National Bank Financial. Your line is now open.

Speaker Change: Thank you.

Speaker Change: To ask a question you will need to press star one on your telephone to withdraw your question. Please press star one again, please wait for your name to be announced please standby, while we compile the Q&A roster one moment for your first question. Please.

Speaker Change: Our first question will come from the line of Eli Rodney with National Bank Financial Your line is now open.

Unknown Executive: Morning, everyone, and congrats on a great quarter. Just filling in for Rupert here. On the offshore projects, High Long in particular, sounds like you're making great progress, and correct me if I'm wrong, but it seems that work has continued through that winter buffer period outlined in the project schedule. Is there any room for upside in construction and commissioning if you continue at the current pace there?

Speaker Change: Good morning, everyone and congrats on a great quarter, just filling in for Rupert cheer.

Eli Rodney: On the offshore projects high long in particular, it sounds like you are making great progress and correct me if I'm wrong, but it seems that work has continued through that winter buffer period outlined in the project schedule.

Eli Rodney: Are there any room for upside on construction and commissioning if you continue at the current pace there.

Unknown Executive: What we've disclosed is that we're continuing to progress according to the schedule, and that costs for the projects remain in line with our expectations. And I think we just leave it at this point. I mean, we obviously always look for opportunities to secure projects and secure cash flow sooner than projected. But at this point, we're just reiterating that the projects are progressing according to schedule and according to the original cost estimates.

Speaker Change: What we've disclosed is that we're continuing to progress according to the schedule and that costs for the project will remain in line with our expectations.

And I think we just leave it at that at this point I mean, we obviously always look for opportunities.

Speaker Change: To secure projects and secure cash flow sooner than forecast, but at this point, we're just reiterating that the projects are progressing according to schedule and according to the original process tumors.

Unknown Executive: I would just maybe add to that. But the buffers primarily apply to offshore work, and there are lots of things that happen in factories and onshore that continue on through that period of time. Okay.

Speaker Change: I would just maybe add to that.

Speaker Change: But the buffers primarily apply to offshore work.

Speaker Change: There's lots of things that happen in factories onshore that continue on through that period of time.

Unknown Executive: And then maybe moving over to DevEx, then obviously, way down year over year at roughly $8 million. With the focus on in-construction projects now, and that being the number one priority, is that a good run rate level to assume going forward?

Speaker Change: Okay great.

Speaker Change: And then maybe moving over to dive back spend obviously way down year over year at roughly $8 million with the focus on the in construction projects now and not being the number one priority is that a good run rate level to assume going forward.

Unknown Executive: I think DevEx moves up and moves down depending on where the business is at. So right now, the business is harvesting some opportunities that were developed over the last few years by converting them into projects and into cash flow within a short period of time. So, certainly, for this year, we've disclosed what DevEx is, and going forward, we would include that as part of.

Speaker Change: I think the FX moves up and moves down depending on where the business is that so right now the businesses.

Speaker Change: Staying on some opportunities that were developed over the last few years by converting them into projects and into cash flow within a short period of time so.

Certainly.

For this year, we've disclosed what <unk> and going forward. We would include that was part of our guidance for future years, Yes, No. We had we have the details disclosed at our February results. When we were setting out our guidance and were in line with that.

Unknown Executive: Part of our guidance for the future. Yeah, no, we had

Unknown Executive: Yeah, no, we have the details disclosed in our February results when we're setting out our guidance, and we're in line with that.

Unknown Executive: Great. Thanks, guys. I'll leave it there.

Operator: Thank you. One moment for our next question, please. Our next question will come from the line of Nicholas Boychuk with Cormark Securities. Your line is now open.

Speaker Change: Great. Thanks, guys I'll leave it there.

Speaker Change: Thank you one moment for our next question. Please.

Speaker Change: Our next question will come from the line of Nicholas Boy, Chuck with Cormack Securities. Your line is now open.

Unknown Executive: Thanks, good morning. Coming back to that question about project development costs, I'm wondering if you guys can expand a little bit just on how you're thinking about the pace of that and whether or not the correct read-through is that kind of looking into the future. You've got Alberta Renewables, ScotWind, Round 3 Taiwan, and South Korean offshore opportunities. Is it fair to say that once you finish this current round of execution, those will be the primary focuses, and then you'll try to backfill additional development projects afterwards?

Speaker Change: Okay.

Nicholas Boychuk: Thanks, Good morning, coming back to the question about the project's opening costs I'm wondering if you guys can expand a little bit just on how you are thinking about the pace of that.

Speaker Change: And whether or not the correct read through is that kind of looking into the future you've got the Alberta renewables, Scott wind round, three Taiwan, and South Korea and offshore opportunities is it fair to say that once you finish. This current round of execution those would be the primary focuses and then youll tried to backfill additional development projects afterwards.

Unknown Executive: I think what we've said in the remarks at the beginning is that we will be disciplined in any new investment opportunities that we pursue. During this construction period, it doesn't mean we won't necessarily pursue anything, but it would have to be a meaningful investment that would be accretive to shareholders. A lot of the pipeline that we described on Investor Day would be delivering cash flow after these projects come online, but I'll probably leave it at that. Anything else to say, John? [inaudible]

Speaker Change: I think what we saw.

Speaker Change: <unk>.

Our remarks at the beginning is that we will be disciplined in any new investment opportunities that we pursue.

Speaker Change: During this construction period.

Speaker Change: It doesn't mean, we won't necessarily pursue anything but it would have to be a meaningful investment that would have that would be accretive to shareholders.

Speaker Change: A lot of the pipeline that we.

Speaker Change: We described at Investor Day.

Speaker Change: Would be delivering cash flow after these projects come online.

But I guess.

Speaker Change: I'll leave it at that Jamie anything else to say John.

Unknown Executive: I'd just like to add or elaborate a bit in the sense that development continues. We are trying to be very focused on what we do and pursuing projects that will deliver meaningful value to our shareholders. As we focus on construction, there's a de-emphasis on development naturally as a consequence, but we do have to think of the future. We do have to think about continuing on. And as the construction projects mature, and we have additional opportunity and appropriate financial resources to invest in development, we will perhaps ramp up to higher levels than we anticipate over the next shortish period of time.

Speaker Change: And just like.

Speaker Change: Add or elaborate a bit in the sense that development continues.

Speaker Change: We're trying to be very focused on what we do.

Speaker Change: In pursuing projects that will deliver meaningful value to our shareholders.

But as we.

Focus on construction there is a de emphasis of development naturally as a consequence.

Speaker Change: But we do have to think of the future. We do have to think about continuing on and as the construction projects mature.

Speaker Change: <unk>.

Speaker Change: We have additional opportunity and appropriate financial resources to invest in development, we will perhaps ramp up too high.

Speaker Change: Higher levels and we anticipate over the next shortest period of time and we did we did signal neck at Investor day that we would be looking at opportunities to potentially recycle capital La Lucha is the first example of that as we focus in on markets that.

Unknown Executive: And we did signal to Nick at Investor Day that we would be looking at opportunities to potentially recycle capital. La Luce is the first example of that, as we focus in on markets that we see better prospects for moving forward with than others and pull back from markets where we've seen more headwinds. So La Luce is the first example, but there is always the opportunity to gradually and prudently reconfigure the business over the next few years by recycling capital as well.

Speaker Change: We see better prospects moving forward with and others and pulled back some are markets where were we.

Speaker Change: <unk> seen more headwinds.

Speaker Change: <unk> is the first example, but there is always the opportunity to.

Speaker Change: Gradually and prudently reconfigure the business over the next few years by recycling capital as well.

Unknown Executive: Okay, thanks. And kind of in that thought of recycling capital, can you kind of share your thoughts on how you're thinking about EBSA right now? Obviously, it's had a great quarter. I'm curious if you could break down the 36% of your gain on the top line between volume price FX, the sustainability of that, and how you're thinking about that segment moving forward.

Okay got it thanks, and kind of in that thought of recycling capital can you kind of share your thoughts on how youre thinking about <unk> right now obviously it had a great quarter.

Speaker Change: I'm curious if you could break down the 36% year over year gain on the top line between volume price FX.

Speaker Change: Sustainability of that and how youre thinking about that segment moving forward.

Unknown Executive: Adam can talk about the results, maybe. Yeah, in terms of the results, I think when you're looking year over year, you're seeing the increase, which is related to inflation escalation, which is inherent in the regulated return, and as well as the appreciation of the Columbia peso. I don't have the specific numbers in front of me, but those are the two drivers for the increase year over year. And on any transactions or anything that we're looking at, we wouldn't comment on those at this stage.

Speaker Change: Adam can talk to the results now in terms of the results I think when Youre looking euro career Youre seeing the increase which is related to inflation.

Inflation, the escalation, which is inherent in the regulated return and as well as the appreciation of the Colombia peso.

Speaker Change: Have the specific numbers in front of me, but those are the two drivers for the increase year over year.

Speaker Change: And on track.

Speaker Change: Transactions or anything that we're looking at we wouldn't comment on those.

Unknown Executive: I think what we said at Investor Day, which we would say again, is that we will always, you should not be surprised that we will be testing the market on various different options moving forward. But I would not read through that we necessarily will pursue every option that we test.

Speaker Change: The state I think what we said at Investor Day, which we would say again is that.

Speaker Change: We will always.

Speaker Change: You should not be surprised that we would be.

Speaker Change: Testing the market on various different options moving forward it but I would not read through that we necessarily will pursue every option that we test.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Mark Jarvi with CIBC; the line is now open.

Speaker Change: Okay understood. Thank you.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Our next question comes from the line of Mark Jarvi with CIBC. Your line is now open.

Unknown Executive: Yeah, thanks. Good morning, everyone.

Unknown Executive: Just coming back to the comment about asset sales and capital recycling, I know you don't want to talk about specific assets, but just walk me through your thought process in terms of if you did sell someone, sort of the triage of where those proceeds would go today. Is it on short growth? Is it tied to the balance sheet just to have some buffer for any contingencies? Are there any other uses?

Mark Thomas Jarvi: Yes. Thanks, good morning, everyone, just coming back to the comment about asset sales and capital recycling I know don't want to talk about specific assets, but just walk me through your thought process in terms of if you did sell some one sort of the triage of where those proceeds would go today is is it onshore growth is it tied in the balance sheet just to have some buffer for any contingencies is there any other year.

Unknown Executive: And given there's a CO transition going on right now, how do you think about proceeds coming in before they're actually deployed during that period?

Speaker Change: And given there is a CEO transition going right now how do you think about proceeds coming in before they are actually deployed during that period.

Unknown Executive: Let me start and then I'll hand it off to Adam. So, I mean, during the construction period, we are very much focused on ensuring the strength of the balance sheet so that we have adequate buffers in case anything unexpected happens and so that we can continue forward with the construction and bring it to a conclusion. So that's, that's important just from a simple resilience standpoint and a prudent and prudent management of the business.

Speaker Change: Let me start and then I'll hand, it off to Adam So I.

Adam Beaumont: I mean during the construction period, we are very much focused on ensuring.

Adam Beaumont: Strength of balance sheet that we have adequate upwards.

Adam Beaumont: In case on anything unexpected happens and so that we can continue forward with the construction and bring it to a conclusion. So that's that's important just from a simple resilient standpoint, and in a prudent and prudent management of the business.

Unknown Executive: Otherwise, there are, we have a robust pipeline, a diversified pipeline across offshore and onshore. We have a team that is dedicated and focused on looking at ways actually to optimize the existing facilities we have and extract more value out of those, which arguably should be kind of your first stop in terms of the allocation of capital. So there are lots of options, but I'll turn over to Adam. Yeah, I mean,

Otherwise.

Adam Beaumont: There are we.

Adam Beaumont: We have a robust pipeline of diversified pipeline across offshore onshore we have a team that is dedicated and focused on looking at ways to optimize the existing facility facilities, we have and and extract more value out of those which arguably should be kind of your first stop in terms of allocation of capital.

Speaker Change: So theres a theres lot spots that I will turn it over to Adam.

Unknown Executive: Yeah, I mean, as said in the comments, I think that our current liquidity position is strong with $760 million of liquidity. And as Mike said, we won't, you know, we're exploring asset recycling as an option to create options for the future, and how we redeploy it will depend. And we'll just make sure that we have the right interests of the company at mind at that time.

Adam Beaumont: As said in the comments I think that our current liquidity position is strong with $760 million of liquidity and as Mike said, we want we're exploring.

Speaker Change: Recycling.

Adam Beaumont: And <unk> to create options for the future and how we redeploy it will depend.

Speaker Change: And we'll just make sure that we have the right interest of the company outlined at that time.

Unknown Executive: Just to make sure that the balance sheet is well protected, if you did sell an asset, some foregone free cash flow, you'd be fine with that for a temporary period as you see through the major projects and then look to deploy that capital to bring back the free cash flow.

Speaker Change: So just to make sure that the balance sheet is well protected if you did sell an asset some foregone free cash flow would you be fine with that.

Speaker Change: A temporary period.

Speaker Change: How do you see through the major projects and then look to deploy that capital to bring back to free cash flow.

Unknown Executive: Yeah, I think again, it would be a part of the consideration. So any cash that would, you know, be lost from a sale will be part of the factor when we're looking at it and making sure we're making the right decision going forward. So I think that that's what's important. Looking ahead. Okay.

Speaker Change: Yes, I think again it would be a part of the consideration so any any cash that would be lost from a sale will be part of the factor when we're looking at it and making sure we're making the right decision going forward. So I think that Thats whats important.

Unknown Executive: Okay. This question is for John.

Speaker Change: King ahead.

Speaker Change: Okay and this question is for John.

Unknown Executive: The CEO transition may have caught the market by a bit of a surprise. You've probably heard some feedback from investors. I'm just wondering how you've integrated any feedback from stakeholders and investors into how you're now thinking with the CEO search. Any updated views in terms of how you're seeing the Canada pool and checklists for the qualities that you'd like to see in an ideal CEO?

Speaker Change: Transition, maybe caught the market by a bit of a surprise you've probably heard some feedback from investors. Just wondering how you are integrated any feedback from stakeholders investors into how youre thinking of the CEO search any updated views in terms of how youre seeing the candidate pool and checklists for the qualities that you'd like to see in an ideal CEO.

Unknown Executive: His feedback, frankly, was generally focused on the CEO and a CFO search going on at the same time. There are many questions related to that.

Speaker Change: Thank you.

Speaker Change: The feedback frankly was generally focused on.

Speaker Change: CEO and a CFO search going on at the same time.

Speaker Change: Where many questions related to that and.

Unknown Executive: And as we said then, and I'll repeat now, I think we're in good hands, as Mike has already waxed eloquently about Adam's capabilities as CFO, and I certainly subscribe to everything that Mike said. Adam is fantastic.

Speaker Change: We said then and I'll repeat now.

Speaker Change: <unk>.

Speaker Change: I think we're in good hands as Mike has already wax eloquently about adding those capabilities as CFO.

Speaker Change: And I certainly subscribe to everything that Mike said, Adam is fantastic. So we will.

Speaker Change: Change to a permanent CFO.

Unknown Executive: So we will change to a permanent CFO in due course of time. In terms of the CEO search, I kind of described it as an onion, as it were, with the outer layer of the onion being finding somebody who is reflective of the high quality of management that we have already. The next kind of layer in the onion is somebody who has demonstrated the creation of shareholder value and strong leadership in a complex organization and who has familiarity with capital markets and experience there.

Speaker Change: Due course of time.

Speaker Change: In terms of the CEO search.

Speaker Change: I kind of described it as a $90 as it were.

Speaker Change: The outer layer of the onion being finding somebody who is.

Speaker Change: Reflective of the high quality of management that we have already.

Speaker Change: The next kind of layer of the onion.

Speaker Change: Somebody who has demonstrated.

Speaker Change: <unk> shareholder value.

Speaker Change: Wrong leadership of a complex organization.

Speaker Change: Andrew has familiarity with capital markets.

Unknown Executive: And finally, then you start to get into more detailed components of what kind of experience set you are looking for. And, as I've said before, one might immediately assume that it would be an absolute requirement that the person have experience in the electricity industry in a very direct fashion. But when you think about it a little bit more, you realize that there are other industries that display similar characteristics of high capital costs, long development times, long operating lives, and so on. And what comes to mind are places like mining, oil, and gas, and infrastructure.

Speaker Change: And experience there.

Speaker Change: And finally, then you start to get into more.

Speaker Change: Detailed components of what kind of experience set are you looking for and as I've said before one might immediately assume that it would be an absolute requirement that the person.

Speaker Change: Experience in the electricity industry in a very direct fashion, but when you think about it a little bit more you realize that there are other industries that display similar.

Speaker Change: Similar characteristics of high capital costs long development times long operating lives.

Speaker Change: So other than they are and what comes to mind are places like mining and oil and gas and infrastructure. That's not to say that we would like to have a somewhat more electricity experience.

Unknown Executive: That's not to say that we would like to have someone with electricity experience. So, I think the feedback we've received hasn't really changed much about the criteria we're looking for in a CEO. Excuse me, the search is underway, and I think it would be inappropriate for me to give any information about the state of the search or the progress underway while we are actively talking to people.

Speaker Change: So I think the feedback we've received hasnt really modified much about the criteria, we're looking for in a CEO.

Speaker Change: Excuse me.

Speaker Change: The search is underway.

Speaker Change: And I think it would be inappropriate for me to comment any information about the state of the search for the progress underway, while we are actively talking to people.

Unknown Executive: That's helpful context, Sean. Maybe just one follow-up would be global sort of experience in terms of, you know, obviously Northland has expanded all over the world. That sort of, I guess, appreciation, understanding for a CEO having managed across different jurisdictions, is that a key element versus someone who has maybe been in a single jurisdiction, maybe only Canadian exposure, US exposure, or something like that?

Speaker Change: That's helpful context, Sean maybe just one follow up would just be.

Speaker Change: Global sort of experience in terms of obviously northern's expanded all over the world.

Speaker Change: That's sort of I guess I appreciate your understanding for having managed across different jurisdictions is that key element versus someone who has maybe been a single jurisdiction maybe on the Canadian exposure U S exposure or something like that.

Unknown Executive: Yeah, international, global, whatever you want to call it, that's certainly one of our list of search criteria.

Speaker Change: Yes.

Speaker Change: National Global whatever you want to call it that.

Speaker Change: Certainly one of our.

Unknown Executive: Okay. Thanks for the time today. I appreciate it.

Speaker Change: A list of search criteria.

Operator: Operator Thank you. One moment for our next question. Our next question will come from the line of Jessica Hoyle with Scotiabank. Your line is now open.

Speaker Change: Okay. Thanks for the time today I appreciate it.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Our next question will come from the line of Jessica <unk> with Scotiabank. Your line is now open.

Unknown Executive: Great, thanks. Good morning, and thanks so much for taking my question. So maybe, on offshore wind, can you give an update or any commentary on how the supply chain is getting set up in Taiwan as it relates to the Heilong project?

Jessica <unk>: Great. Thanks, good morning, and thanks, so much for taking my question.

So just to start maybe on on an offshore wind can you give an update or any commentary on how the supply chain is getting set up in Taiwan as it relates to the high long project.

Unknown Executive: So, High Long is probably the last of the original grouping of round one projects that has moved forward. High Long is benefiting to some extent from the establishment of a local supply chain for some of the local requirements. There are a lot of learnings that we were able to gain by observing how the other projects engaged with the local suppliers, and the supply chain also matured to some extent.

So we nor how long is it.

Jessica <unk>: It probably the last of the original grouping of kind of round one projects to move forward. So long as benefiting to some extent from the establishment of a local supply chain for some of the local requirements. So theres a lot of learnings that we were able to gain by observing how the other projects.

Jessica <unk>: <unk> engaged with the local suppliers and the supply chain also mature to some extent.

Jessica <unk>:

Jessica <unk>: How long is also 300 megawatts plus $7 44 in the 744 megawatt actually doesn't have any local content requirement. So we also have a substantial international.

Unknown Executive: Heilong is also 300 megawatts plus 744, and the 744 megawatts actually doesn't have any local content requirements. So, we also have a substantial international supply chain as well, Vietnam, Korea, from Europe, and overall, as I reported in my opening remarks, we are pleased with how the fabrication is progressing. Whether it's the pin piles that hold the jacket foundations in place, or the two jacket foundations for the OSS that have both been installed, actually, not just fabricated but installed, and the OSS, one of the two OSS platforms, which is a six-story structure, has now been fully fabricated and delivered to Taiwan for installation in the near future.

Jessica <unk>: Supply chain as well.

Speaker Change: Korea from Europe.

Speaker Change: And overall as I reported in my opening remarks.

Speaker Change: We are pleased with how the fabrication is progressing well.

Speaker Change: Whether it's the <unk> pilots that hold the jacket foundations in place.

Speaker Change: Or the two jacket.

Speaker Change: Foundations for the Oss that have doubled that now installed actually not just fabricated but installed and the Oss one of the two Oss platforms, which is a six story.

Speaker Change: Structure has now been fully fabricated.

Speaker Change: Delivered to Taiwan.

Unknown Executive: So, overall, we appreciate that some of the early stage projects had some issues with the local supply chain, but I think we've benefited from observing that and also, commercially and contractually negotiating and some flexibility to our local content obligations to allow us, for example, to swing in international components in some cases for local components if the local supply chain is delayed, just to add a buffer and reduce risk on the construction program.

Speaker Change: <unk> installation in the near future so overall.

Speaker Change: We appreciate that some of the early stage projects had some issues with global supply chain.

Speaker Change: We benefited from observing that and also from <unk>.

Speaker Change: Commercially and contractual Lee negotiating and some flexibility through our local content obligations to allow us for example to swing and international components in some cases for local components. If the local supply chain is delayed just to.

Speaker Change: That buffer.

Speaker Change: Reduced risk on the construction program.

Unknown Executive: Thanks for that. And then I think you mentioned that some of the strong wind conditions for offshore continued into April. So just looking at your guidance for the year, how do you think you're positioned within the range, just given the strength in Q1 and then some of those favorable, some of those favorable conditions in April as well?

Speaker Change: Thanks for that and then I think you mentioned that some of the strong wind conditions for offshore continued into April. So just looking at your guidance for the year. How do you think you're positioned within the range just given the strength in Q1, and then some of that favorable some of those favorable conditions.

Unknown Executive: Yeah, I think that the, yeah, like you said, the results have been pretty strong so far to start the year, but it is the first quarter, and we like to look at things on a risk-adjusted basis. And we're kind of holding forward to the guidance that we've set at this time. Obviously, for future quarters, we'll continue to revisit that, but that's where we're holding right now.

Speaker Change: Bill as well.

Speaker Change: Yes, I think that yes, like you said the results have been pretty strong so far to start the year, but it is the first quarter and we like to look things on a risk adjusted basis, and we're kind of holding forward to the guidance that we've set at this time, obviously for future quarters will continue.

Speaker Change: You to revisit that but that's where we're holding to right now.

Unknown Executive: What's important when you look at the production from the first quarter, even from April, I guess those who will follow the Gemini app will see that we don't control the wind, but we control the availability of our facilities. And the operations team did a very good job of making sure that the facilities were operating at a high level of availability so that we could capture that resource. And finally, if I...

Speaker Change: But what is important when you look at the production from the first quarter, even from April I guess with.

Speaker Change: Those who will follow the gentlemen, I have to see.

Speaker Change: I mean, we don't control the wind, but we control the availability of our facilities and.

Speaker Change: The operations team did a very good job in making sure that at least we are operating at a high level of availability so that we could capture.

Speaker Change: That <unk>.

Unknown Executive: And finally, if I can add to that, remember that the wind resource is generally higher in the winter than it is in the summer. So we did extremely well in a time that was already expected to do extremely well. We did better than expected. But there is a seasonality to this, and it's early in the year, so we're not trying to counter eggs before they're hatched, or chickens before they're hatched, I should say.

Speaker Change: Resource.

Speaker Change: And finally, if I can.

Speaker Change: Remember that.

Speaker Change: When.

Speaker Change: The wind resource was generally higher in the winter than it is in the summer so.

Speaker Change: We did extremely well in the time that already was expected to do extremely well, we did better than expected.

Speaker Change: But there is some seasonality to this and it's early in the year. So we're not trying to counter.

Speaker Change: They're hatched.

Speaker Change: So further app sessions.

Operator: One moment for our next question. Our next question comes from the line of John Mould with TD Securities. Your line is now open.

Speaker Change: Thank you.

Speaker Change: One moment for our next question.

Speaker Change: Our next question comes from the line of John Baugh with TD Securities. Your line is now open.

Unknown Executive: Hey, good morning guys. Maybe just one question on your Alberta pipeline and the power market restructuring that's going on there. I think it's safe to say that, you know, you're not looking at an FID on something like Jurassic this year, just given the focus on construction execution. I think you've been pretty clear there, but I'm just wondering if that power market restructuring potentially pushes out the timeline where you might look to move forward with a project in Alberta and just how you're thinking about your pipeline there more broadly, given the potential changes.

John Baugh: Hey, good morning, guys maybe.

John Baugh: Maybe just one question on your Alberta pipeline in the power market restructuring that's going on there I think it's safe to say that youre not looking at an RFID on something like Jurassic. This year, just given the focus on.

John Baugh: Construction execution, I think you've been pretty clear there, but I'm just wondering if that power market restructuring potentially pushes out.

John Baugh: The timeline, where you might look to move forward with a project in Alberta, and just how you're thinking about your pipeline there are more broadly given the.

Unknown Executive: Yeah, I mean, there are two sets of changes, broadly speaking, in Alberta. The first was the moratorium, and then at the conclusion of the moratorium were new sets of rules around development, right?

John Baugh: The potential changes we're seeing.

Speaker Change: Yes, I mean, theres two set to changes.

Broadly speaking and Alberto first what's the moratorium.

And then the conclusion of the moratorium with new sets of rules around development right and on that.

Unknown Executive: And on that, our approximately one and a half gigawatt pipeline was largely unaffected insofar as we already had our AUC permits on about a gigawatt of it. And then we also had some battery storage projects as well within that pipeline, which were unaffected by the rule changes. So, that element of the change in Alberta was either neutral, or you could even argue it was net positive for us as far as it put us in an advantageous position relative to other projects that weren't as advanced in Alberta.

Speaker Change: Our <unk>.

Speaker Change: Approximately one five gigawatt pipeline.

Speaker Change: Was largely unaffected so.

Speaker Change: So far as we already had our AUC permits on about a gigawatt of it and then we also had some battery storage projects as well within that pipeline, which are unaffected by by the rule changes so.

Speaker Change: That element of the changes in Alberta.

Speaker Change: Neutral or you could even argue net positive to us and as far as it put us in an advantageous advocate is positioned relative to other projects that warranted as advance in Alberta with respect to the market redesign. It's something that we are tracking very closely and we're very much involved in the stakeholder ink process, Michelle <unk>, who heads up our onshore.

Unknown Executive: With respect to the market redesign, it's something that we are tracking very closely, and we're very much involved in the stakeholdering process. Michelle Chislett, who heads up our Entourage Business Unit, is actually out in Calgary today. I think she's participating in a roundtable with government officials later today as well, as that gets further developed, and we'll certainly be tracking to see what impact that has on the merchant market there. Our intent, if we move forward with those projects, is to contract the majority of their output from them.

Speaker Change: Business unit is actually out in Calgary today.

Speaker Change: I think he's participating in a.

Speaker Change: A round table with government officials later today as well as.

Speaker Change: As that gets further developed and.

Speaker Change: And we will certainly be tracking to see what impact that has on the merchant market there are intent.

Speaker Change: Move forward with those projects is to contract the majority of the output from them.

Unknown Executive: And so there is some latitude in terms of determining how much we contract them based on the final market design and the impact that we would see that having on market prices going forward. But that's kind of where it's at right now, John.

Speaker Change: So there is some latitude in terms of determining how much we contract them based on the.

Speaker Change: Around the the final market design and the impact that we would see that having on market prices going forward, but.

Speaker Change: That's kind of where it's at right now John.

Unknown Executive: Yeah, that's great. All my other questions were answered.

Speaker Change: Okay. That's great. All my other questions were answered all I'll leave it there. Thank you very much.

Unknown Executive: I'll leave it there. Thank you very much. Thank you.

Speaker Change: Thank you one moment for our next question.

Operator: Operator Thank you. One moment for our next question. Our next question is a follow-up with Eli Rodney from National Bank Financial. Your line is open.

Speaker Change: Our next question is a follow up with Eli Rodney from National Bank Financial Your line is open.

Unknown Executive: Hi, yeah, so back on the offshore portfolio, Germany in particular, could you give us some insight on what level of curtailment you saw in Q1 and then maybe extrapolate that into April and May?

Speaker Change: Okay.

Eli Rodney: Alright, yes, so back on the offshore portfolio, Germany and specific could you give us some insight onto what level of curtailment you saw in Q1.

Eli Rodney: Maybe extrapolating that into April and May.

Unknown Executive: Unfortunately, I don't have the April and May numbers, but I think you'll see in the notes that the amount of revenue curtailed overall was $21 million for the three months ended March 31st.

Speaker Change: I don't Unfortunately have the April and May numbers, but I think youll see in the notes the amount of revenue curtailed overall.

Speaker Change: It was $21 million for the three months ended March 31.

Unknown Executive: Speaking broadly, unpaid curtailment tends to happen during periods of high production, particularly when they overlap with holidays or with periods of low industrial demand. We'll see what happens over the next few months.

Speaker Change: Speaking broadly unpaid curtailment as tenant tends to happen during periods of high production and.

Speaker Change: Particularly when they overlap with holidays are with periods of low industrial demand. So.

Speaker Change: We'll see what happens over the next few months.

Unknown Executive: Great. And then there is one more on asset recycling. I might have missed this, but it seems that the market sentiment today is broadly in favor of buyers. And I think Adam, you mentioned taking a few years' approach on your view to selling down stakes or complete asset recycling. With rains coming down now, is it fair to say that Northland is taking... a bit more patient of an approach to selling down additional assets after Leloucha, maybe 25 or 26 would be a target year. Are you still seeing good value for some of the non-core assets in the portfolio?

Speaker Change: Yes broadly speaking.

Speaker Change: Great and then one more on the asset recycling might investors, but it seems that the.

Speaker Change: Market sentiment today is.

Speaker Change: Broadly in favour of buyers and I think Adam you mentioned, taking a few year approach on your view to selling down stakes or completed asset recycling.

With rates coming down now is it fair to say that Northland is taking.

Speaker Change: A bit more patient or an approach to selling down.

Speaker Change: Additional assets after Lucha, maybe 25% to 26 would be.

Speaker Change: Its hard at year are you still seeing good value for some of the non core assets in the portfolio.

Unknown Executive: I would be very conscious of any asset recycling of value for shareholders. I mean, we have a diversified portfolio across a number of different jurisdictions. So, what you said is perhaps broadly true, but once you start penetrating into different markets and different specific assets, there could be different; it may not necessarily always be the case. But our criteria or our screen is making sure that we do achieve what we believe is good value on any divestment because we look at the full cycle economics on recycling from that divestment into the reinvestment into a new opportunity. And so divestment economics is equally important to investment economics, right?

Speaker Change: It'd be very conscious of.

On any asset recycling of value for shareholders, we have a <unk>.

Speaker Change: Diversified portfolio across a number of different jurisdictions. So.

Speaker Change: What you said.

Speaker Change: Kaps broadly true.

Speaker Change: But once you start you are seeing in to different markets and different specific assets.

Speaker Change: Yes, there could be different.

Speaker Change: It may not necessarily always be the case.

Speaker Change: But our criteria or our screen.

Speaker Change: Is making sure that we.

Speaker Change: To achieve what we believe is.

Speaker Change: Put value on any divestment.

Speaker Change: Because we look at the full cycle economics on recycling from that divestment into the reinvestment.

Speaker Change: A new opportunity and so the divestment economics are equally important to the investment economics right.

Unknown Executive: Right. Thanks. Okay, I'll leave it there.

Speaker Change: Alright, thanks, Okay.

Speaker Change: Leave it there.

Operator: I'm currently showing no further questions at this time. I'd like to turn the call back to Mr. Mike Crawley for closing remarks.

Speaker Change: Thank you.

Speaker Change: I'm currently showing no further questions at this time I'd like to turn the call back to Mr. Mike Crawley for closing remarks.

Mike Crawley: Yeah, well, thank you everyone for joining us today. We're going to hold our next earnings call following the results of our second quarter 2024 results in August, and in the meantime, we want to thank everybody on the call for their continued support.

Speaker Change: Yes. Thank you for everyone for joining us today, we're going to hold our next earnings call. Following the results of our second quarter.

2024 results in August and in the meantime, we want to thank everybody on the call for their continued support.

Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone have a wonderful day.

Speaker Change #100: This concludes today's conference call. Thank you for your participation you may now disconnect everyone have a wonderful day.

Speaker Change #100: Okay.

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Speaker Change #100: Yeah.

Speaker Change #100: [music].

Okay.

Okay.

Speaker Change #100: Okay.

Speaker Change #100: [music].

Speaker Change #100: Yeah.

Speaker Change #100: [music].

Okay.