Electricity revenues increased 14.7% to $89.0 million Company raised revenue guidance for 2013
Ormat Technologies, Inc. (NYSE: ORA) today announced financial results for the third quarter of 2013.
Quarterly financial highlights compared to the same quarter last year:
- Electricity revenue increased by 14.7% to $89.0 million;
- Gross margin grew 75 basis points to 30.4%;
- Operating income reached $29.8 million compared to $12.1 million;
- Net income attributable to the Company’s shareholders was $13.0 million or $0.28 per share, compared to a net loss of $0.6 million or $0.01 per share;
- Adjusted EBITDA grew 25.0% to $60.3 million; and
- Declared dividend of $0.04 per share
Operational highlights and recent developments:
- Increased electricity generation by 5.0% to 985,531 MWh, driven by new capacity coming on line at Olkaria III Plant 2 in Kenya, and increased generation at the McGuiness Hills plant;
- Successfully completed the world’s largest binary geothermal plant, the 100 MW Ngatamariki in New Zealand, under a $142.0 million EPC contract;
- Secured a 10-year Power Purchase Agreement (PPA) with the Southern California Public Power Authority to supply power from the Heber 1 geothermal plant in California beginning December 16, 2015. The new PPA replaces the Standard Offer Contract No. 4 (SO#4), which is tied to natural gas prices, with fixed-price contract at a higher rate;
- Entered into a joint development agreement with eBay to develop a 5 MW recovered energy generation power plant in Utah to supply cleaner electricity to eBay’s new data center; and
- Signed an agreement for a greenfield development of the Hu’u Dompu geothermal prospect in Indonesia
Dita Bronicki, Chief Executive Officer of Ormat, stated: “During the third quarter, we continued to deliver strong financial and operational results. In the electricity segment, we benefitted from the first full quarter of commercial operation of the Olkaria III Plant 2 in Kenya, which helped drive a 5.0% increase in generation. In addition, gross margin increased in the electricity segment to 31.1% due to the contribution of the new plants added to our portfolio in the past two years and to our continued focus on improving operational efficiencies at our existing plants. Looking ahead, we are poised to continue these positive trends and we aim to bring new capacity on line and replace legacy PPAs with more favorable agreements.”
“A substantial milestone in the product segment is the completion of the 100MW Ngatamariki geothermal power plant. The completion of the plant in less than 24 months from the award with generation at 104% of its designed output is a further testament to our execution capability and the suitability of our technology to large geothermal facilities. Looking forward, our backlog remains strong as we secured new orders in the third quarter 2013 and stands at approximately $173.0 million with more than $120.0 million expected to be recognized in 2014.”
Ms. Bronicki concluded, “We are raising our 2013 guidance and expect total revenue to be between $525.0 million to $535.0 million with electricity segment revenues to be approximately $330.0 million and product segment revenues to be between $195.0 million and $205.0 million.”
For the three months ended September 30, 2013, total revenues reached $130.7 million from $132.3 million in the third quarter of 2012 a decrease of 1.2%. Electricity revenues increased 14.7% to $89.0 million from $77.6 million in the three months ended September 30, 2012. Product revenues decreased 23.6% to $41.8 million from $54.7 million in the three months ended September 30, 2012.
Operating income for the three months ended September 30, 2013 was $29.8 million, compared to $12.1 million for the three months ended September 30, 2012. Third quarter 2012 results included a $7.3 million impairment loss related to the OREG 4 recovered energy generation power plant.
For the three months ended September 30, 2013, the Company reported net income attributable to the Company’s shareholders of $13.0 million or $0.28 per share (diluted), compared to net loss of $0.6 million or $0.01 per share (diluted) for the three months ended September 30, 2012.
Adjusted EBITDA for the three months ended September 30, 2013 was $60.3 million, compared to $48.2 million for the three months ended September 30, 2012 an increase of 25.0%. The reconciliation of GAAP net cash provided by (used in) operating activities and net income to EBITDA and Adjusted EBITDA and additional cash flows information is set forth below in this release.
Net cash provided by operating activities was $32.2 million in the nine months ended September 30, 2013, compared to $62.4 million in the nine months ended September 30, 2012.
On November 5, 2013, ORMAT’s Board of Directors approved a payment of a quarterly dividend of $0.04 per share pursuant to the Company’s dividend policy, which targets an annual payoff ratio of at least 20% of the Company’s net income. The dividend will be paid on December 4, 2013 to shareholders of record as of closing of business on November 20, 2013.
As of September 30, 2013 cash, cash equivalents were $35.4 million. In addition, as of September 30, 2013, the company had $145.2 million of unused corporate borrowing capacity under existing lines of credit with different commercial banks.
Conference Call Details
Ormat will host a conference call to discuss its financial results and other matters discussed in this press release at 9:00 A.M. EST on Wednesday, November 6, 2013. The call will be available as a live, listen-only webcast at www.ormat.com. During the webcast, management will refer to slides that will be posted on the web site. The slides and accompanying webcast can be accessed through the Webcast & Presentations in the Investor Relations section of Ormat’s website.
An archive of the webcast will be available approximately 10 minutes after the conclusion of the live call.
With over four decades of experience, Ormat Technologies, Inc. is a leading geothermal company and the only vertically integrated company solely engaged in geothermal and recovered energy generation (REG). The company owns, operates, designs, manufactures and sells geothermal and REG power plants primarily based on the Ormat Energy Converter—a power generation unit that converts low-, medium- and high-temperature heat into electricity. With over 82 U.S. patents, Ormat’s power solutions have been refined and perfected under the most grueling environmental conditions. Ormat has over 500 employees in the United States and about 600 overseas. Ormat’s flexible, modular solutions for geothermal power and REG are ideal for the vast range of resource characteristics. The company has engineered, manufactured and constructed power plants, which it currently owns or has supplied to utilities and developers worldwide, totaling approximately 1600 MW of gross capacity. Ormat’s current generating portfolio of 595 MW (net) is spread globally in the U.S., Guatemala and Kenya.
Ormat’s Safe Harbor Statement
Information provided in this press release may contain statements relating to current expectations, estimates, forecasts and projections about future events that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to Ormat’s plans, objectives and expectations for future operations and are based upon its management’s current estimates and projections of future results or trends. Actual future results may differ materially from those projected as a result of certain risks and uncertainties. For a discussion of such risks and uncertainties, see “Risk Factors” as described in Ormat Technologies, Inc.’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 11, 2013.
These forward-looking statements are made only as of the date hereof, and we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
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