Northland Power Inc. (TSX: NPI) delivered strong operational performance in the second quarter of 2026, achieving 96% commercial availability across its fleet. The company reported a net loss of $54 million, compared to $53 million in the same period of 2025, while Adjusted EBITDA rose 6% year-over-year to $259 million. This growth was primarily driven by contributions from the Hai Long offshore wind project and improved operating results at energy storage and natural gas facilities.

Despite the EBITDA increase, free cash flow per share decreased significantly to $0.09 from $0.22 in the prior-year quarter. Management attributed this decline largely to a one-time German trade tax refund received in 2025, which lowered tax payments in that comparative period. Cash provided by operating activities fell to $170 million from $451 million, reflecting these tax timing differences alongside higher current tax payments in the current quarter.

What the Numbers Show

The divergence between Adjusted EBITDA growth and free cash flow contraction highlights the impact of non-recurring tax items on liquidity metrics. While operational cash generation remained robust, the absence of the prior-year’s one-time tax refund created a headwind for free cash flow. Additionally, revenue from energy sales remained flat at $510 million, indicating that the EBITDA expansion was driven by cost efficiencies and new project contributions rather than top-line volume growth, particularly as European offshore wind resources were lower than average.

Construction Portfolio Updates

Northland advanced its 2.5 GW construction portfolio with key milestones:

• Baltic Power (Poland): Achieved first power, delivering the first offshore wind-generated electricity to Poland’s national grid. With 61 of 76 turbines installed, the project is on track for commercial operations in the second half of 2026.
• Hai Long (Taiwan): Expanded its 30-year Corporate Power Purchase Agreement (CPPA) to cover 100% of off-take. Subsequent to quarter-end, the project secured NTD 55 billion ($2.4 billion) in incremental debt financing, optimizing its capital structure.
• Battery Storage: Commenced construction on two BESS projects in Poland (Kamionka and Mieczysławów), totaling 300 MW / 1.2 GWh. The Jurassic BESS project in Alberta is completing final testing ahead of end-2026 commercial operations.

Financial Performance by Segment

The International business unit saw offshore wind revenue decline 8% to $196 million due to lower wind resources, resulting in an 11% drop in segment Adjusted EBITDA. However, this was partially offset by stable performance in onshore renewables.

In the Americas, the utility segment drove growth, with revenue rising 25% to $111 million due to exchange rate movements and asset base expansion. Natural gas facilities also contributed positively, with Adjusted EBITDA increasing 9% to $46 million despite a 12% drop in production volumes, aided by lower operating costs.

Outlook

Management reaffirmed its full-year 2026 guidance, expecting Adjusted EBITDA between $1.45 billion and $1.65 billion. Free cash flow per share is projected to range from $1.05 to $1.25. The company continues to focus on executing its construction pipeline, with Baltic Power and Hai Long approaching commercial operations, which management views as an inflection point for long-term contracted cash flows.

Northland Power Inc. has secured approximately CAD $2.4 billion (equivalent to NT$55 billion) of new Taiwan dollar-denominated debt facilities for its Hai Long offshore wind project in Taiwan, optimizing the project’s capital structure and reducing execution risk. The financing, announced on Aug. 11, 2026, includes a 20-year tenor and involves 35 financial institutions, including seven export credit agencies and 17 new local and international banks. This move strengthens the project’s funding base through construction and operations, with overall costs remaining aligned with original expectations for commercial operations in 2027.

The total debt facility is structured to cover future project funding requirements without additional capital raises. Of the $2.4 billion, approximately $0.9 billion represents incremental funding available through project completion, while the remaining $1.5 billion replaces existing debt. Management stated that this incremental funding, combined with expected pre-completion revenues, will be sufficient to cover all project funding needs. The expansion of the lender group, particularly with more local Taiwanese commercial and state-owned banks, demonstrates broadened confidence in the project’s long-term viability.

Financing Structure

Christine Healy, President and Chief Executive Officer of Northland Power, stated that the financing reflects the strength of the Hai Long project and the critical role offshore wind plays in Taiwan’s energy future. She noted that Northland is among the few companies globally with the proven capabilities to develop, finance, and deliver projects of this scale. Jeff Hart, Chief Financial Officer, added that the transaction strengthens Hai Long’s fundamentals and reflects the company’s focus on driving value through stakeholder collaboration.

Project Overview

Hai Long is located approximately 45 to 70 kilometers off the Changhua County coast in the Taiwan Strait. The project has a total capacity of 1,022 MW and is underpinned by long-term offtake contracts spanning 30 years. These contracts provide the contracted revenue visibility that supports Northland’s Energize 2030 targets. Once completed, Hai Long is expected to be one of the largest offshore wind projects in Asia.

What the Numbers Show

The shift to Taiwan dollar-denominated debt at a 20-year tenor indicates a strategic move to align currency exposure with local revenue streams, potentially mitigating foreign exchange risk associated with CAD-based reporting. The inclusion of 17 new financial institutions, alongside seven original export credit agencies, suggests a deepening of market confidence beyond initial development stages. With costs aligned to original expectations, the $0.9 billion incremental funding acts as a buffer against construction volatility, ensuring that pre-completion revenues can seamlessly transition into operational cash flows by 2027.