• Ormat Technologies Reports First Quarter 2021 Financial Results

    Source: Nasdaq GlobeNewswire / 05 May 2021 16:30:00   America/New_York

    CONTINUE TO DELIVER REVENUE GROWTH AT BOTH ELECTRICITY AND ENERGY STORAGE SEGMENTS
    REITERATE 2021 ANNUAL ADJUSTED EBITDA GUIDANCE
    INCREASED ENERGY STORAGE PIPELINE TO 2 GW

    RENO, Nev., May 05, 2021 (GLOBE NEWSWIRE) -- Ormat Technologies, Inc. (NYSE: ORA) today announced financial results for the first quarter ended March 31, 2021.

    KEY FINANCIAL RESULTS

     Q1 2021  Q1 2020  Change (%) 
    GAAP Measures        
    Revenues ($ millions)        
    Electricity145.0  142.9  1.5%
    Product8.6  47.4  (81.8
    		)%
    Energy Storage12.7  1.8  589.1
    		%
    Total Revenues166.4  192.1  (13.4
    		)%
             
    Gross margin (%)        
    Electricity44.9% 50.0%   
    Product6.6% 22.0%   
    Energy Storage62.4% (5.6)%   
    Gross margin (%)44.3% 42.6%   
             
    Operating income ($ millions)49.9  61.1  (18.3)%
    Net income attributable to the Company’s stockholders15.3  26.0  (41.4)%
    Diluted EPS ($)0.27  0.51  (47.1)%
    Non-GAAP Measures       
             
    Adjusted Net income attributable to the Company’s stockholders24.1  26.0  (7.3)%
    Adjusted Diluted EPS ($)0.42  0.51  (17.6)%
    Adjusted EBITDA1 ($ millions)99.2  106.0  (6.4
    		)%

    (1) Reconciliation is set forth below in this release

    “Our first quarter results reflect continued strength from our Electricity and our rapidly growing Energy Storage segments that were able to partially offset a $9.9 million reduction in gross profit in the Product segment that was adversely impacted by the COVID-19 pandemic and the $4.9 million of insurance income related to Puna that was received in the first quarter of last year,” commented Doron Blachar, Chief Executive Officer. “We continue to show revenue growth in both the Electricity and Energy Storage segments and are expecting to maintain growth and improve Adjusted EBITDA.”

    “Ormat’s pipeline of energy storage projects continues to expand, and we have secured large quantities of batteries that will be delivered over the next four years on competitive terms in order to support our growing needs,” added Mr. Blachar. “This segment continues to contribute positive Adjusted EBITDA and we are increasingly confident that growth will accelerate.”

    “This year we will lay additional groundwork to accelerate the growth of our Electricity and Energy Storage segments,” added Mr. Blachar. “Governments around the world continue to support renewable energy, and the current U.S. administration has indicated an eagerness to invest in infrastructure, particularly for clean energy. We are well-positioned to take advantage of these trends. We expect to increase our combined geothermal, energy storage and solar generating portfolio to approximately 1.5 GW by 2023, with a significant contribution coming from our energy storage business. This will enable an annual run-rate of $500 million in Adjusted EBITDA towards the end of 2022.”

    FINANCIAL AND BUSINESS HIGHLIGHTS

    • Net income attributable to the Company's stockholders was $15.3 million, or $0.27 per diluted share, compared to $26.0 million, or $0.51 per diluted share in the first quarter of last year, representing a decrease of 41.4% and 47.1%, respectively, mainly as a result of the February power crisis in Texas, which led to emergency regulations impacting our Rabbit Hill energy storage project, as well as the slowdown in Ormat’s Products segment;
    • Adjusted net income attributable to the Company's stockholders was $24.1 million, or $0.42 per diluted share compared to $26.0 million or $0.51 per diluted share in 2020. Net income attributable to the Company's stockholders in the first quarter of 2021 was adjusted to exclude a one-time net expense of $12.1 million pre-tax and $8.8 million after tax related to the February power crisis in Texas, which caused a significant increase in demand for electricity on the one hand and a decrease in the electricity supply in the region on the other hand, leading to a significant increase in the Responsive Reserve Service market price. The following is a breakdown of the pre-tax net expense as recorded in our P&L:
      • Revenue of $5.4 million under Energy Storage segment
      • Expense of $3.0 million under General and Administrative Expenses
      • Loss of $14.5 million under Derivatives and Foreign Currency Transaction Gains (Losses);
    • Adjusted EBITDA decreased 6.4% to $99.2 million, from $106.0 million in the first quarter of last year mainly due to a $9.9 million reduction in Product segment gross profit this quarter and BI insurance income of $4.9 million recorded in the first quarter of last year (a reconciliation of GAAP net income to EBITDA and Adjusted EBITDA is set forth below in this release);
    • Electricity segment revenues increased slightly compared to the first quarter of last year, supported by a contribution from newly added capacity at the Steamboat Complex and from Puna’s resumed operation, partially offset by curtailments in the Olkaria complex in Kenya due to COVID-19 and lower resource performance in the complex that caused a reduction in generation. We are evaluating a recovery plan to restore the complex’s generating capacity;
    • Product segment revenues decreased 81.8% to $8.6 million, down from $47.4 million in the same quarter last year, impacted mainly by COVID-19;
    • Product segment backlog stands at $37.2 million as of May 5, 2021;
    • Energy Storage segment revenues were a record $12.7 million compared to $1.8 million in the same quarter last year. The increase was mainly related to higher revenues at our Rabbit Hill project driven by the February power crisis in Texas, and revenues from our Pomona asset in California which was acquired in July 2020;
    • We announced the commercial operation of the 10 MW/40 MWh Vallecito Battery Energy Storage System (Vallecito BESS). The Vallecito BESS provides local resource adequacy to Southern California Edison (SCE) under a 20-year energy storage resource adequacy agreement. In addition, the facility will provide ancillary services and energy optimization through participation in merchant markets run by the California Independent System Operator (CAISO);
    • The Puna power plant is currently generating approximately 20 MW. We plan to connect two injection wells during the second quarter and are targeting close to full capacity in mid-2021. While the enactment of the new PPA, signed with HELCO at the end of 2019, was recently delayed by the PUC, we will continue selling electricity under our existing long-term PPA;
    • McGinness Hills expansion is completed and we are in late stage of start-up; and
    • We released two energy storage systems for construction, the 20 MW/MWh Andover and the 7 MW/MWh Howell, that are located in New Jersey and will sell ancillary services to PJM. We are targeting commercial operation in the first half of 2022.

    2021 GUIDANCE

    • Total revenues of between $645 million and $680 million;
    • Electricity segment revenues between $570 million and $580 million;
      • The electricity segment includes $33 million from the Puna power plant in Hawaii, assuming we will meet our target of bringing the plant close to full operation in mid-2021;
    • Product segment revenues of between $50 million and $70 million;
    • Energy Storage revenues of between $25 million and $30 million;
    • Adjusted EBITDA to be between $400 million and $410 million;
      • Adjusted EBITDA attributable to minority interest of approximately $32 million.

    The Company provides a reconciliation of Adjusted EBITDA, a Non-GAAP financial measure for the three months ended March 31, 2021. However, the Company is unable to provide a reconciliation for its Adjusted EBITDA guidance range due to high variability and complexity with respect to estimating forward looking amounts for impairments and disposition and acquisition of business interests, income tax expense, and other non-cash expenses and adjusting items that are excluded from the calculation of Adjusted EBITDA.

    DIVIDEND

    On May 5, 2021, the Company’s Board of Directors declared, approved, and authorized payment of a quarterly dividend of $0.12 per share pursuant to the Company’s dividend policy. The dividend will be paid on June 1, 2021 to stockholders of record as of the close of business on May 18, 2021. In addition, the Company expects to pay a quarterly dividend of $0.12 per share in each of the next three quarters.

    CONFERENCE CALL DETAILS

    Ormat will host a conference call to discuss its financial results and other matters discussed in this press release on Thursday, May 6th, at 9 a.m. ET. The call will be available as a live, listen-only webcast at investor.ormat.com. During the webcast, management will refer to slides that will be posted on the website. The slides and accompanying webcast can be accessed through the News & Events in the Investor Relations section of Ormat’s website.

    An archive of the webcast will be available approximately 60 minutes after the conclusion of the live call.
    Investors may access the call by dialing:

    Participant dial in (toll free):1-877-511-6790
    Participant international dial-in:1-412-902-4141
      
    Conference replay 
    US Toll Free:1-877-344-7529
    International Toll:1-412-317-0088
    Replay Access Code:10154447
      

    ABOUT ORMAT TECHNOLOGIES

    With over five decades of experience, Ormat Technologies, Inc. is a leading geothermal company and the only vertically integrated company engaged in geothermal and recovered energy generation (“REG”), with robust plans to accelerate long-term growth in the energy storage market and to establish a leading position in the U.S. energy storage market. 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. The Company has engineered, manufactured and constructed power plants, which it currently owns or has installed for utilities and developers worldwide, totaling approximately 3,200 MW of gross capacity. Ormat leveraged its core capabilities in the geothermal and REG industries and its global presence to expand the Company’s activity into energy storage services, solar Photovoltaic (PV) and energy storage plus Solar PV. Ormat’s current 932 MW of geothermal and Solar generating portfolio is spread globally in the U.S., Kenya, Guatemala, Indonesia, Honduras, and Guadeloupe and its 83 MW energy storage portfolio is located in the U.S.

    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’s Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 26, 2021 and from time to time, in Ormat’s quarterly reports on Form 10-Q that are filed with the SEC.

    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.

     
    ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES
    Condensed Consolidated Statement of Operations
    For the Three-Month periods Ended March 31, 2021 and 2020
       
      Three Months Ended March 31,
      2021  2020 
           
      (Dollars in thousands, except per share data)
    Revenues:      
    Electricity 144,988  142,856 
    Product 8,643  47,411 
    Energy storage 12,721  1,846 
    Total revenues 166,352  192,113 
    Cost of revenues:   
    Electricity 79,851  71,368 
    Product 8,074  36,978 
    Energy storage 4,780  1,949 
    Total cost of revenues 92,705  110,295 
    Gross profit 73,647  81,818 
    Operating expenses:   
    Research and development expenses 876  1,619 
    Selling and marketing expenses 4,276  4,794 
    General and administrative expenses 18,606  16,745 
    Business interruption insurance income —  (2,397)
    Operating income 49,889  61,057 
    Other income (expense):   
    Interest income 263  402 
    Interest expense, net (19,016) (17,273)
    Derivatives and foreign currency transaction gains (losses) (16,866) 393 
    Income attributable to sale of tax benefits 6,355  4,132 
    Other non-operating income (expense), net (331) 78 
    Income from operations before income tax and equity in earnings (losses) of investees 20,294  48,789 
    Income tax provision (3,007) (18,148)
    Equity in earnings (losses) of investees, net 542  (735)
    Net income 17,829  29,906 
    Net income attributable to noncontrolling interest (2,570) (3,873)
    Net income attributable to the Company's stockholders 15,259  26,033 
    Earnings per share attributable to the Company's stockholders:   
    Basic: 0.27  0.51 
    Diluted: 0.27  0.51 
    Weighted average number of shares used in computation of earnings per share attributable to the Company's stockholders:      
        Basic 55,988  51,036 
        Diluted 56,735  51,526 
           


    ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES
    Condensed Consolidated Balance Sheet
    For the Periods Ended March 31, 2021 and December 31, 2020
        
     March 31, 2021 December 31, 2020
    ASSETS     
    Current assets:   
    Cash and cash equivalents376,630  448,252 
    Marketable securities at fair value27,735  — 
    Restricted cash and cash equivalents88,449  88,526 
    Receivables:   
    Trade139,711  149,170 
    Other10,513  17,987 
    Inventories38,408  35,321 
    Costs and estimated earnings in excess of billings on uncompleted contracts20,876  24,544 
    Prepaid expenses and other22,613  15,354 
        Total current assets724,935  779,154 
    Investment in unconsolidated companies104,519  98,217 
    Deposits and other52,956  66,989 
    Deferred income taxes119,217  119,299 
    Property, plant and equipment, net2,148,589  2,099,046 
    Construction-in-process471,548  479,315 
    Operating leases right of use15,627  16,347 
    Finance leases right of use8,336  11,633 
    Intangible assets, net189,249  194,421 
    Goodwill24,237  24,566 
        Total assets3,859,213  3,888,987 
        
    LIABILITIES AND EQUITY     
    Current liabilities:     
    Accounts payable and accrued expenses148,071  152,763 
    Billings in excess of costs and estimated earnings on uncompleted contracts12,686  11,179 
    Current portion of long-term debt:     
       Senior secured notes24,963  24,949 
       Other loans36,240  35,897 
    Full recourse26,168  17,768 
    Operating lease liabilities2,935  2,922 
    Finance lease liabilities3,171  3,169 
        Total current liabilities254,234  248,647 
    Long-term debt, net of current portion:   
    Limited and non-recourse:     
      Senior secured notes306,891  315,195 
      Other loans276,186  284,928 
    Full recourse:     
      Senior unsecured bonds698,271  717,534 
      Other loans59,601  59,556 
    Operating lease liabilities12,332  12,897 
    Finance lease liabilities5,851  9,104 
    Liability associated with sale of tax benefits107,105  111,476 
    Deferred income taxes87,421  87,972 
    Liability for unrecognized tax benefits3,094  1,970 
    Liabilities for severance pay18,202  18,749 
    Asset retirement obligation64,354  63,457 
    Other long-term liabilities6,086  6,235 
        Total liabilities1,899,628  1,937,720 
          
          
          
    Redeemable noncontrolling interest9,706  9,830 
          
    Equity:     
    The Company's stockholders' equity:     
        Common stock56  56 
        Additional paid-in capital1,264,828  1,262,446 
        Retained earnings558,644  550,103 
        Accumulated other comprehensive income (loss)(6,920) (6,620)
        Total stockholders' equity attributable to Company's stockholders1,816,608  1,805,985 
    Noncontrolling interest133,271  135,452 
        Total equity1,949,879  1,941,437 
        Total liabilities, redeemable noncontrolling interest and equity3,859,213  3,888,987 
          

    ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES
    Reconciliation of EBITDA and Adjusted EBITDA
    For the Three-Month Periods Ended March 31, 2021 and 2020

    We calculate EBITDA as net income before interest, taxes, depreciation and amortization. We calculate Adjusted EBITDA as net income before interest, taxes, depreciation and amortization, adjusted for (i) termination fees, (ii) impairment of long-lived assets, (iii) write-off of unsuccessful exploration activities, (iv) any mark-to-market gains or losses from accounting for derivatives, (v) merger and acquisition transaction costs, (vi) stock-based compensation, (vii) gain or loss from extinguishment of liabilities, (viii) gain or loss on sale of subsidiary and property, plant and equipment and (ix) other unusual or non-recurring items. EBITDA and Adjusted EBITDA are not measurements of financial performance or liquidity under accounting principles generally accepted in the United States, or U.S. GAAP, and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net earnings as indicators of our operating performance or any other measures of performance derived in accordance with U.S. GAAP. We use EBITDA and Adjusted EBITDA as a performance metric because it is a metric used by our Board of Directors and senior management in evaluating our financial performance. However, other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do.

    The following table reconciles net income to EBITDA and Adjusted EBITDA for the three-Month periods ended March 31, 2021 and 2020.

      Three Months Ended March 31
      20212020
      (Dollars in thousands)
    Net income 17,829  29,906 
    Adjusted for:   
    Interest expense, net (including amortization of deferred financing costs) 18,753  16,871 
    Income tax provision (benefit) 3,007  18,148 
    Adjustment to investment in an unconsolidated company: our proportionate share in interest expense, tax and
    depreciation and amortization in Sarulla    		 2,465  2,677 
    Depreciation and amortization 40,829  35,288 
    EBITDA 82,883  102,890 
    Mark-to-market gains or losses from accounting for derivative 2,086  (561)
    Stock-based compensation 2,097  1,989 
    Merger and acquisition transaction costs 484  540 
    Reversal of a contingent liability (418) — 
    Allowance for bad debts related to February power crisis in Texas 2,980  — 
    Hedge losses resulting from February power crisis in Texas 9,133  — 
    Settlement expenses —  1,188 
    Adjusted EBITDA 99,245  106,046 
           

    ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES
    Reconciliation of Adjusted Net Income attributable to the Company's stockholders and Adjusted EPS
    For the Three-Month Periods Ended March 31, 2021 and 2020

    Adjusted Net Income attributable to the Company's stockholders and Adjusted EPS are adjusted for one-time expense items that are not representative of our ongoing business and operations. The use of Adjusted Net income attributable to the Company's stockholders and Adjusted EPS is intended to enhance the usefulness of our financial information by providing measures to assess the overall performance of our ongoing business.

    The following tables reconciles Net income attributable to the Company's stockholders and Adjusted EPS for the three-month periods ended March 31, 2021 and 2020.

       
      Three Months Ended March 31
    (Dollars in millions except, per share data) 2021 2020
           
    Net income attributable to the Company's stockholders $15.3 $26.0
           
    One-time net expense related to February power crisis in Texas $8.8 $—
           
    Adjusted Net income attributable to the Company's stockholders $24.1 $26.0
           
    Weighted average number of shares diluted used in computation of earnings per share attributable to the
    Company's stockholders    		  56.7  51.5
           
    Diluted Adjusted EPS  0.42  0.51


    Ormat Technologies Contact:
    Smadar Lavi
    VP Corporate Finance and Head of Investor Relations
    775-356-9029 (ext. 65726)
    slavi@ormat.com    		 Investor Relations Agency Contact:
    Rob Fink
    FNK IR
    646-415-8972
    rob@FNKIR.com

    Primary Logo

Share on,