Welcome to the Northland Power conference call to discuss the first quarter 2026 results. As a reminder, this call is being recorded on Thursday, May 14, 2026, at 10:00 A.M. Eastern. Present for this call are Christine Healy, President and CEO, Jeff Hart, Chief Financial Officer, Adam Beaumont, Head of Capital Markets. Before we begin, Northland's management has asked me to remind listeners that all figures presented during today's call are in Canadian dollars, and to caution that certain information presented and responses to questions may contain forward-looking statements that include assumptions and are subject to various risks. Actual results may differ materially from management's expected or forecasted results. Please read the forward-looking statements section in yesterday's news release announcing Northland Power's results, and be guided by its contents when making investment decisions or recommendations. The release is available at www.northlandpower.com.
I will now turn the call over to Ms. Christine Healy. Please go ahead.
Thank you, good morning, everyone. Thanks for joining us. I'd like to begin with a few perspectives on the broader macro environment that's shaping our business and the energy sector overall. Recent geopolitical developments reinforce the importance of energy security for governments, businesses, and consumers. We're operating in a dynamic global environment where evolving market fundamentals underscore the need for resilient and flexible energy systems. Across markets, we see a clear and consistent theme: tightening supply and growing demand, driven in part by accelerating electrification. Together, these dynamics are reinforcing the critical role of renewables as a scalable, domestically sourced, and increasingly cost-competitive solution, playing a central role in strengthening energy independence and system resilience. As energy security becomes more critical around the world, demand for long-term contracted solutions that provide price certainty and system reliability continues to grow. We're seeing this play out across our portfolio.
In Europe, we see power pricing continuing to reflect underlying macro events, particularly in markets such as Germany and the Netherlands, where natural gas prices are a driver of marginal electricity pricing. Here in Canada, we see an increase in power demand with the need to nearly double electricity generation in coming years. We see that already within our natural gas facilities in Canada, where there is a trend of increasing utilization month-over-month. Stepping back, the current environment reinforces our strategy at Northland, which is anchored in creating value through disciplined execution, operational excellence, and effective operation of our high-quality asset base. Northland is well-positioned given our multi-technology expertise.
We own and operate a diversified portfolio spanning offshore wind, onshore renewables, natural gas-fired power, and grid-scale battery energy storage across Canada, Europe, and Asia, comprised of 3.5 GW of gross operating capacity and 2.2 GW of capacity under construction. Our scale, operating expertise, and technology breadth position us well to capture growing demand and increasing value across our markets. Our diversification helps us deliver stable performance while creating value through recontracting, optimizing our existing fleet, and disciplined execution of our development pipeline. Before turning to our first quarter results, I want to acknowledge a tragic incident that occurred during the quarter at our EBSA utility in Colombia, where a contractor lost his life while performing work on one of our transmission lines. We took immediate action to support the family and colleagues and have implemented a detailed action plan.
We've completed a thorough investigation, and our action plan is directed at strengthening our safety culture and applying the lessons learned to protect everyone who works at our sites around the world. This terrible incident reinforces the importance and the need for relentless focus on improving safety culture. With that, I will begin with an overview of our first quarter results, our strategic priorities, and updates on our construction activities. Jeff will then take us through the financial results in more detail, after which we will open the line for questions. Strong wind conditions in Northern Europe contributed to solid financial performance in the first quarter, with Adjusted EBITDA and Free Cash Flow per share increasing 18% and 17% respectively compared to the first quarter of last year.
While strong wind conditions underpinned that performance, our high fleet availability of 96% enabled us to capture these favorable wind resources and convert them into generation. We continued to advance construction at the 1 GW Hai Long offshore wind project in Taiwan, the 1.1 GW Baltic Power offshore wind project in Poland, and the 80 MW two-hour Jurassic Solar+ project in Alberta, together representing more than 2.2 GW of generation and storage capacity under construction. At Hai Long, we recently signed a new 30-year corporate power purchase agreement with our current corporate offtaker, which will cover 100% of the project's generating capacity. As electricity demand grows and energy security becomes a greater policy priority, we see commercial offtakers seeking long-term contracted supply, providing price certainty and reliability. Northland is well-positioned to meet that demand. Turning to a bit more detail about our construction projects.
At Hai Long, fabrication of all the remaining major components has been completed. Our turbine installation campaign is underway following the opening of the weather window on April 1st. We have 51 out of 73 turbines now installed, with 32 of those turbines generating power and all cabling work now complete. The project remains on track for commercial operation in 2027. At Baltic Power, we completed several important construction milestones, including fabrication of the remaining components and installation of all four export cables, all the inter-array cables, all the transition pieces, and 38 of the 76 turbines. The project remains on track for commercial operation in the second half of 2026. At Jurassic Solar+ in Alberta, we installed all 39 battery packs and 20 medium voltage transformers during the quarter, and successfully energized the project's main transformer.
That project remains on track for commercial operations in the second half of this year. We are advancing our two battery energy storage projects in Poland. We expect to start construction on one of those projects in the coming weeks, with the second project beginning in the coming months. Disciplined capital allocation remains central to our strategy. We continue to refine and high-grade our development pipeline and prioritize projects with returns that meet our investment criteria. During the quarter, we decided to discontinue the 100 MW High Bridge onshore wind project in New York State, following the government's suspension of permit applications. We had previously minimized spending on this project, pending certainty on the permitting path, and we've now determined that the issues are unlikely to reverse in the near term, and our development money is better spent elsewhere.
We also chose not to renew a permit for a 990 MW offshore wind project in South Korea due to the project not meeting our investment criteria. The remainder of our 1.6 GW development portfolio in South Korea remains paused as we continue to assess the regulatory environment. These are the right decisions for our business. Our objective is disciplined growth, supported by strong returns and execution certainty. We are also evaluating opportunities across our core markets, and we're maturing value enhancement opportunities within our existing fleet. We look forward to providing you with updates and more details on that as the year unfolds. With that, I'll turn it over to Jeff to walk us through the financial results.
Thanks, Christine, and good morning, everyone. It was a strong quarter with operational availability of 96%, which allowed us to capture strong wind resource across our European offshore fleet. In addition, our results were supported by lower curtailments related to negative pricing and grid outages. The Oneida Energy Storage Facility, which commenced operations in May of last year, also contributed meaningfully. These drivers were partially offset by lower production from our onshore wind and solar facilities in Spain, Canada, and the U.S. Overall, we generated first quarter Adjusted EBITDA of CAD 427 million, which represents an 18% increase compared to the first quarter of 2025. This increase, as I mentioned, was due to higher production from offshore wind and contributions from Oneida, as well as pre-completion revenues from Hai Long.
Net income for the quarter was CAD 161 million, compared to CAD 111 million in 2025. Free Cash Flow per share for the quarter was CAD 0.70, compared with CAD 0.60 in 2025. In relation to our major construction projects, Baltic Power and Hai Long, both are on track for commercial operations as planned, with overall costs aligned with original expectations. As previously disclosed in the fall of 2025, slower-than-expected turbine commissioning at Hai Long may require a potential equity injection of CAD 150 million-CAD 200 million Northland share. This can be funded by several sources, including corporate liquidity. However, we and our project partners are actively looking at optimizations at the project level, and we'll provide an update later this summer.
The signing of the new 30-year Hai Long corporate power purchase agreement extends our weighted average contract length and creates incremental capacity for further project-level optimizations. The Northland team is pursuing more value creation activities across our fleet. We are reaffirming our 2026 financial guidance, with 2026 Adjusted EBITDA expected to be in the range of CAD 1.45 billion-CAD 1.65 billion, and Free Cash Flow per share in the range of CAD 1.05-CAD 1.25. Given the seasonality of our business, where the first and fourth quarters are typically key, our strong Q1 performance provides a constructive start and supports our outlook for the year. Turning to our balance sheet, with nearly CAD 1 billion of available liquidity and our investment-grade credit rating, we are well-positioned to execute on our capital allocation plan.
With that, I'll hand it back to Christine.
Thank you, Jeff. Q1 was a strong start to what we expect to be a defining year for Northland. For the remainder of 2026, the plan is clear. Bring Baltic Power and Jurassic BESS to commercial operations, advance Hai Long towards its 2027 commissioning, and build on the value enhancement work underway across the fleet. I am motivated by what's ahead. Our diversified portfolio, strong financial discipline, and track record of project execution position us to capture this opportunity in front of us and create long-term value for shareholders. This concludes our prepared remarks. Operator, if you can please open the line for questions.
Thank you. As a reminder to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from Melissa Deane of National Bank of Canada. Your line is open.
Good morning, everyone. Thank you for taking my questions. During the quarter, you made strong progress on both Baltic Power and Hai Long. On Baltic Power specifically, are your expectations for pre-completion revenue contribution beginning in Q2 2026 still intact? It looks like you reported a positive approximate CAD 9 million share of profit contribution in Q1 for Baltic. Despite that, Q2 expectation, could you help us understand the primary drivers of that this quarter? Was it entirely FX or hedging-related accounting impacts? Just wanted to clarify that.
Yeah, thanks. It's Jeff here. There's a few in there. I'd say if you stand back for the quarter, we did have pre-completion revenues from Hai Long for circa CAD 20 million. I'll remind you is when we came out with Q4, we had about 20 turbines turning at the time. You know, I think we're now at 32. I'll just refresh everybody, is we still expect to be within the range of our pre-completion guidance for Hai Long as well as our overall guidance. That is back-end weighted, clearly, with the turbines turning in the fall and the heavy wind period in Q4. We're reaffirming that. Is also for the quarter you referenced FX.
We did have some realized gains in relation to some interest rate hedges, that we look to optimize to the tune of about CAD 35 million. I view that as one time and a unique opportunity for us.
Okay, perfect. That's really helpful. On Hai Long, progress appears to have accelerated relative to expectations. What drove that improvement? Now that the in-water installation window has opened up, how should we think about the cadence of turbine energization through the balance of 2026?
Melissa, thanks so much for your question. I'm gonna start off by saying that in projects, nothing is done until it's done, so we continue to work. As we indicated when we were in our last update from last quarter, when the weather window was closed, we had a team on standby that could go offshore and do work when the weather permitted. That team was able to accomplish some things that set us up in good shape for when the weather window reopened. Of course, with the weather window reopened, we had the benefit of time to plan and crews who are now well experienced in the area. I think we're starting to now get a bit of momentum building around that activity.
I think this is what we like to see in projects. It's what we expect to see in projects. It's always nice when we see it come to fruition. Now, of course, you know, we get weather updates daily on what's happening, and the teams adjust their planning accordingly. They're going at the cadence that we expect right now. We're gonna keep that up.
Perfect. That's helpful. Just one more follow-up on that. As a reminder, how much capital remains to be spent for both, Baltic Power and Hai Long?
Yeah, no, thanks for that. You know, obviously with FX and different things, it's in and around or slightly under around CAD 3 billion left to go on the two projects, Canadian dollars.
Perfect. Maybe one on a different note, just the Polish batteries. We saw some incremental progress during the quarter. Have you begun evaluating procurement optionality for those projects? Can you just remind us of the key differences you expect in both building and operating battery storage assets in Poland relative to Ontario, for example?
Thanks, Melissa. The projects are moving through. We have a decision gate process within Northland, and every project has to be rigorously reviewed through the stage gate process. As we move through that and the projects meet their requirements, they move forward in the construction phase. Part of that is making sure that we have clarity on our supply chain and making sure that we can meet all of our expectations so that. It's part of the reason I would say that Northland is good on project execution, is we plan these things effectively. We set up the milestones, we hold the project to that as a commitment. That's part of how we do it here at Northland.
In terms of how the systems work, we're seeing jurisdiction by jurisdiction, some commonality, but also some differences. That's not meant to be a vague answer. It's actually an accurate answer. Within Ontario, I will highlight that the Oneida Battery Storage Project has in fact been performing very well. It's been performing on the system and providing much needed services. It's also been contributing well commercially for us in the quarter. The way that the system works in Poland is that similar to Ontario, we do have a contracted revenue stream where we are available for the system in order to provide stability within the overall electricity grid. There's a merchant component as well, where we trade in and out based on prices. In many ways, the two models are similar.
Perfect. Thank you. I'll get back in the queue.
Thank you. Our next question comes from Sean Steuart of TD Cowen. Your line is open.
Thanks. Good morning, everyone. Jeff, a question on the incremental PPA at Hai Long with your corporate offtaker. Can you give some context on, I guess, up financing opportunities associated with that, if you're gonna be able to pull more liquidity out of that asset and, you know, how that could help bridge the pre-completion gap that you cited previously?
Yeah, no, I, you know, I can't really give any more color on the contract itself. I think what I'll just highlight is the incremental term. I would say it's, it's, I think a valuable, you know, agreement probably for everybody involved. I think that's conducive and I'll say is helpful to us evaluating different opportunities in the longer term. So, like, as I said, we'll come back, you know, mid-year later this summer on an update on the project and those opportunities itself. You know, we're feeling pretty good about what's in front of us on that.
Okay, that's good to hear. Broader thoughts on potential asset sales to fund earlier stage development opportunities, how has that market evolved, whether it's sell downs of minority stakes in existing assets or outright exit from operating platforms? Any comments on potential there?
I can take that and obviously Christine can chime in. I think it really depends on markets. I think you'll see it in, you know, as an example in the U.S. is with the regulatory framework in relation to High Bridge, I think earlier stage or even later stage developments that aren't on in relation to wind probably, you know, not much value there in the market or expectation given that regulatory risk. I think there's probably, you know, in that market attraction for operated assets. Really is market dependent. What I would say is we see opportunities across the portfolio to continue to optimize and clip and we'll be very, very value focused on it and opportunistic.
That's where we're in a strong financial position or a good financial position that we can do what's right for our shareholders. We'll value the opportunities here, but I think we see opportunities even on the acquisition side to compete with our development projects as well. We'll continue to look to high-grade and optimize both buy and sell.
Sean, I'll add into that to say, first of all, I appreciate the question, and we're continually evaluating across the portfolio where we see opportunities. I think I've mentioned in previous calls that always the guiding question for us is, are we the best owner of these assets? In many cases, I think the answer is clearly yes. In cases where it's questionable, sometimes we send the teams back to do a bit more work to decide whether or not we are that best owner. Where we're not the best owner, we will take steps accordingly. That review continues all the time, and it's updated based on the performance of the assets, the performance of the teams, and what's going on in the general macro environment as well. We're continually looking at that.
Okay. That's great context. Thanks. That's all I have for now.
Thank you. Our next question comes from Nelson Ng of RBC Capital Markets. Your line is open.
Great. Thanks, and good morning, everyone. Just a quick follow-up on the Hai Long corporate PPA. I think when you guys initially reached financial close back in 2023, the guidance was for roughly like CAD 230 million-CAD 250 million of EBITDA for the first five years on average. Like, do you know, like, roughly is that number going to change, and is that part of the update that you're looking to give mid or late this year?
Yeah, thanks for that, Nelson. I'll focus really as opposed to going four years back, just with what we outlaid at Investor Day. We kinda, we said, look, between the two projects, we're gonna build about CAD 0.80 in free cash flow, as part and parcel of our 2030 targets. What I would say is, I'd reiterate that. I think our update for the project is just more near term funding and optimization is what we're gonna be really talking about at that mid-year update. You know, in and around summer.
Okay, got it. On the Polish battery project, in terms of the, I think the number was about EUR 200 million is the total cost. Can you give a bit of color in terms of how much of that would be funded by project-level debt?
Yeah. Like, what. We'll update in due course as we progress that. Obviously, we've talked about the two projects, one starting, you know, construction here in the coming weeks and one a little bit of follow on from that, and we'll give an update there. What I would say is we will balance, we're still comfortable, and I hate using that word comfortable, but we're confident in executing and see the economics holding. What I would say is we will balance the PF and leverage levels just on the merchant split relative to the capacity payment. As Christine talked to is there is a capacity component of that contract.
It is at a lower percentage of what we would see is, at Oneida, which was kinda 60/40. We'll update in due course, but I would expect with the higher merchant exposure to be slightly lower gearing ratio on the PF.
Okay. Got it. Just one last question. In terms of High Bridge, you guys are no longer pursuing that due to economic reasons, and you mentioned regulatory risk. I think there's a provision for another, I think, CAD 9 million. Is that like Will that project be required to pay any penalties to NYSERDA, or is that just the cost of winding down that development?
Yeah, there's a couple things in there. Is the overall P&L impact for that, I'm just gonna round close to CAD 35 million. CAD 25 million is historical cost write- off, and then you have circa CAD 10 million in relation to close out penalties and the like on LCs, et cetera. That's what that relates to, and that's the way to broadly think of the High Bridge impacts. CAD 25 million circa historical costs and about CAD 10 million closeout.
Great. Thanks a lot. I'll leave it there.
Thank you. Our next question comes from Mark Jarvi of CIBC.
Yeah, thanks. Good morning, everyone. Just in terms of when you guys are pursuing new natural gas investments, whether it's with the existing assets or potentially greenfield, where do you stand right now in terms of communication with the large OEMs in terms of just where you're seeing timelines, costs? How does that kind of factor into the projects that you're kind of moving up the queue in terms of priorities, like things that, I guess, maybe go down a bilateral agreement versus competitive tenders? I'm just curious how that all kind of folds in together.
Mark, it's a great question. I would say the answer to it is all of the above and probably a bit more beyond. I would say in the last six weeks, I've had one-to-ones with most of our major potential equipment manufacturers. In some cases, we have long-standing, decades-long relationships that we rely on. We also have been talking to some potential new kids on the block. We also look at different opportunities that might exist in the market, just with other industry participants who might be having different planning than they were otherwise having. We're looking at all of that.
The answer is, it really depends site by site, and that's a bit the difficulty of kind of pre-planning your supply chain because the requirements site by site and jurisdiction by jurisdiction within Canada can be quite different. We don't really see that a one-size-fits-all approach matches what the system operators are looking for today. Now, if that changes, that's great. That, you know, we can adapt to that as well. Right now, I would say we continue to keep open opportunities on with all of our suppliers. But we, of course, have strong relationships with some of our suppliers. Like, we've been doing natural gas for 38 years, so those relationships go back a long time, and we have a very good understanding with one another.
I think when we have the right opportunities, we'll be able to move forward on them.
Just if, in terms of opportunities then, you know, even if it's greenfield or something where you actually have to install a new gas turbine, does that mean that you'd be more focused on bilateral where you can come in and line up the costs when you sign the actual contract terms, as opposed to trying to put your neck out on the line a little bit on contract terms, capacity pricing before you have all the equipment costs locked in?
In Northland Power, we don't like to make commitments to our system operators unless we know how and when we're going to be able to deliver on them. That's part of our DNA in Northland Power. I appreciate not everybody might approach that in the same way, and there's puts and takes in all of that. For us, we really like to know what we can do and when we can do it. That's back to our decision gate process. It would be truly exceptional for us to step outside that. Right now, we don't see any reason to do so. We think that our process works well and delivers best value and makes us the trusted, reliable partner that we think system operators need to rely on.
Sounds good. Then you brought up, Christine, the potential for some acquisitions, not just necessarily selling assets, potentially acquiring some. Can you share anything else on that, whether that includes operating and development assets, anything in terms of regional focus or technology that you're seeing as better opportunities today?
We are looking and evaluating, and that's all I'll say about that.
Okay, thanks.
Thank you. Our next question comes from Benjamin Pham of BMO. Your line is open.
Hey, good morning. I wanted to go back to your development backlog. You've revised a couple of projects that you previously paused that are now taken out. That 8 GW there that you have advancing going forward, can you unpack that somewhat to maybe give us a number on projects that are not paused? In other words, like if you actually take out projects that don't look like they're actually going to happen, like what would the backlog be in gigawatts?
Thanks for the question. Our pipeline is as it is in our disclosure. I think as I mentioned in my opening comments, we do have right now, there are some jurisdictions where we await final terms so that we know what we're bidding on. Part of that, you know, we hold a license, we have an opportunity, but to know if we're gonna move forward with a project, we need to know the commercial terms on which the project could exist and what we're investing on. I would say right now, the pipeline remains active. We have projects that we're moving through. Various projects are in different levels of maturity.
We've highlighted the two that we made decisions on this quarter to discontinue, but the other projects are, you know, they continue to be evaluated. Whether they make it through our decision gates or not is a second question. They have to come through investment committee, and then as we get to sort of the next phase of having to spend more money, then we, the project team has to bring it forward and say, here's why we think there is a path forward to this meeting all of our thresholds inside Northland. That is those decision gates are very important milestones inside of our company. We tried to show a bit of that at Investor Day, showing early phase and sort of more maturity, and that reflects where projects move through our decision gates.
Very early phase, there's lots of optionality, and that's the way it should be. Then as we get closer to spending more money, we need to have more certainty.
May just to add to that, it's a good starting context since you, let's say you have from my quick math, it looks like you still have the Korean, some Korean projects there. You got this, you got the Scotland floating as well. It looks like you still have it teed up in a sense that it might move forward and on those projects, but right now it seems like it's much lower probability. Really that backlog you have there, the 8 GW you're working on, I mean, it is, in terms of anything active pipeline, it is smaller than that 8 GW.
Yeah, Ben, I think what you summarized it, when you look at those two projects, the floating in Korea is us evaluating and then pre-prioritizing. You know, if you look at Scotland, the fixed bottom, and then Korea, it's really clarity on regulatory timing and framework. Those are the two I would highlight. I think we see options and I think across the rest of the portfolio, but those are the two specific examples that we'll continue to wait and see.
I think as we see in our different markets, there was a previous question on this on potential acquisitions in M&A is I think the Polish battery projects are a good example of things where we can create value in the markets we're in, with our operating expertise, our supply chain, ability to execute a market understanding. We see opportunities to continue to supplement that pipeline.
I mean, it's really, it's a competition for capital, like I've talked about many times in these calls. If the best opportunities are within our portfolio, great. If the best opportunities are outside our portfolio, then we go to those instead. It continues to be a competition for capital. There's nobody in this company who, you know, before their decision gets to investment, there's nobody in this company who can say that they know with certainty what's happening with their project. They have to advance it and bring forward the best set of opportunities that they can.
A related question to this, like when you think about the Northland enterprise today, over 2 GW, you're adding some more megawatts, as well come 2027, what is the ideal size for development pipeline for you when you think about the offices you have, the staff you have, where EBITDA is going? How you think about, just replenishing that over time?
I think for me and for Northland, the focus is on quality over quantity, 'cause I would rather have, you know, clarity on what we're trying to drive towards instead of people trying to do a lot of things without the net level of focus. One of the things that we talked about at Investor Day was with respect to our DEVEX. We wanna make sure that the DEVEX that we spend is highly focused and effective. The plan that we laid out at Investor Day, the team is completely focused on delivering that plan, and we see that we have optionality in the ways that we deliver that plan, which it puts us in a good place. The team is pushing forward on delivering that, and that's the laser focus. As Jeff referred to, we continue to look outside.
If there are ways to high grade, if there are other opportunities outside of our portfolio, we look at that. The team is laser focused on delivering what we have in front of us, and we feel like that this plan is well in hand.
Okay. Understood. Thanks for the color.
Thank you. I'm showing no further questions at this time. I'd like to turn it back to Christine Healy for closing remarks.
Thank you everyone for joining us today, and, thank you for your continued support.
This concludes today's conference call. Thank you for participating, and you may now disconnect.