Northland Power Inc (Ontario) T.NPI

Free Cash Flow Declines Reason for Concern?

[Curiosity1011]

Adjusted Free Cash Flow of $41 million for the three months ended December 31, 2022, was 78% or $141 million lower than the same quarter of 2021.

Adjusted Free Cash Flow per share (a non-IFRS measure) decreased in the fourth quarter to $0.16 from $0.80 in 2021 and increased on a full-year basis to $1.95 from $1.77 in 2021.

In 2023, management expects Adjusted Free Cash Flow to be in the range of $1.70 to $1.90 per share (decline or flat).

My question then is Q4 normally such a low cash flow quarter for NPI? Seems like a lot of one off expenses were paid for, which contributed to the decline. However the decline overall is concerning.

Overall sales, adjusted EBITDA and net income all increased however, which are positives.
I guess the market will tell us which of these metrics matters most tomorrow.

 

[Curiosity1011]

Net income attributable to common shareholders - or EPS - $1.12 in 2022 vs. $0.45 in 2021. This positive seems like where the news should focus on.

[BayWall]

Looks like the stock is flat. Interest rates continue to go up today. US 10 year treasury nearing 4%, last time this was in 2007, before the meltdown of stocks. Webcast today, mostly what was covered already on Investor's Day. Northland will continue to hold onto natural gas facilities in Ontario and Sask as the demand for electricity is great. So no selling of these assets in the

[BayWall]

Cash flow from operations in Q4 remained the same like in 2021. I guess this is the most important cash flow element. And the company did well on derivatives. I think this is what the analysts missed to take into account on their EPS estimates. Northland appears to have good advisors when it comes to managing currency, commodity and interest rate risk. Fair value gain on derivative