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Ormat Technologies Inc.

Published : August 03rd, 2015

Ormat Technologies Reports 2015 Second Quarter Results

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Headline: Ormat Technologies Reports 2015 Second Quarter Results

Date: 08-03-2015

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 Total Revenues increase 10.1% to $140.5 million and Net Income attributable to 
the Company's stockholders increased 57.8% to $14.4 million

Company Reiterates Full-Year 2015 Revenue and Adjusted EBITDA Guidance


RENO, Nev., Aug. 03, 2015 (GLOBE NEWSWIRE) -- Ormat Technologies, Inc. (NYSE:ORA) today announced financial results for the second quarter ended June 30, 2015.

Second Quarter Highlights and Recent Developments:

  • Total revenues of $140.5 million, compared to $127.6 million in the second quarter of 2014;
  • Electricity revenues of $90.9 million, compared to $91.7 million in the second quarter of 2014;
  • Product segment revenues of $49.6 million, compared to $35.9 million in the second quarter of 2014;
  • Operating income increased by 27.0% to $38.6 compared to $30.4 million in the second quarter of 2014 (excluding an $8.1 million write off);
  • Net income attributable to the company's shareholders of $14.4 million or $0.28 per share (diluted), compared to $9.1 million or $0.20 per share in the second quarter of 2014;
  • Adjusted EBITDA of $67.8 million, compared to $61.8 million in the second quarter of 2014;
  • Declared a quarterly dividend of $0.06 per share for the second quarter of 2015;
  • Closed and received $162.3 million cash from Northleaf Capital Partners for a 36.75% equity investment in certain power plants;
  • Closed $42 million loan agreement to refinance the Amatitlan power plant in Guatemala with Banco Industrial S.A. and its affiliate Westrust Bank. Funding is expected shortly; and
  • Signed an approximate $100.0 million EPC contract in Chile;


Isaac Angel, chief executive officer of Ormat, stated, �Our balanced business model enabled Ormat to deliver another quarter of solid, double-digit revenue growth largely driven by 38.0% growth from our Product segment. We essentially matched last year�s revenue in our Electricity segment, mainly due to the McGinness Hills complex performance, overcoming lower oil and natural gas prices, as well as reduced generation at Puna due to last summer�s hurricane, which impacted our revenue in this segment. The enhancements implemented in our power plants that improved the efficiency of our operating portfolio along with the new capacity that came on line increased the margins in the Electricity segment despite the significant impact of the lower oil and natural gas prices on our revenue. Higher revenue and improvements in our consolidated gross margin drove a 27.0% increase in our operating income excluding an $8.1 million write off in the second quarter of 2014, demonstrating again the strength of our balanced business model.�

�We remain confident in the multi-year plan we outlined at our analyst day in March,� continued Mr. Angel. �We are focused on expanding our geographic reach and broadening our technology offering with a vision to position Ormat as a leading provider of renewable energy. We remain excited about the growing number of opportunities before us and believe the tailwinds expected from the potential PTC extension and other regulatory initiatives in the regions we are targeting, will complement our efforts.�
                                                                                                                 
Guidance

Mr. Angel added, �Our guidance assumes the continued impact on our results due to lower oil and natural gas prices, which translates to a $28.6 million reduction in revenues compared to last year. However, we reiterate our 2015 revenue guidance and expect electricity segment revenues to be between $380.0 million and $390.0 million, and product segment revenues to be between $180.0 million and $190.0 million. We reiterate our 2015 Adjusted EBITDA guidance of $280.0 to $290.0 million for the full year, which is also impacted by current oil and natural gas prices. We expect Northleaf�s annual portion of the adjusted EBITDA guidance to be approximately $14.0 million.�

Second Quarter Financial Summary

Total revenues for the three months ended June 30, 2015 were $140.5 million, an increase of 10.1% compared to $127.6 million for the three months ended June 30, 2014. Electricity revenues were $90.9 million for the quarter compared to $91.7 million in the second quarter last year. Product revenues increased 38.0% to $49.6 million for the second quarter of 2015, from $35.9 million in the second quarter last year.

The slight decrease in the electricity segment was primarily attributable to lower generation at the Puna power plant due to well field maintenance and lower energy rates resulting from the decrease in oil prices as well as lower revenues in some of Ormat�s power plants due to lower natural gas prices. The decrease was offset by the commencement of operations of second phase of the McGinness Hills power plant in Nevada, which began commercial operation in February 2015.

The company reported net income attributable to the company�s shareholders of $14.4 million or $0.28 per share (diluted) in the second quarter of 2015 compared to $9.1 million or $0.20 per share for the second quarter of 2014. The net income includes a $1.7 million related loss from extinguishment of a liability resulting from the repurchase of a portion of the  OFC Senior Secured Notes as well as non-recurring and non-operating expenses of $0.4 million associated with due diligence related to a potential M&A transaction that management ultimately decided not to pursue.

Adjusted EBITDA for the three months ended June 30, 2015 was $67.8 million, compared to $61.8 million for the three months ended June 30, 2014 an increase of 9.7%. The reconciliation of GAAP net cash provided by operating activities and net income to EBITDA and Adjusted EBITDA and additional cash flow information is set forth below in this release.

On August 3, 2015, ORMAT�s Board of Directors approved a payment of a quarterly dividend of $0.06 per share. The dividend will be paid on September 2, 2015 to shareholders of record as of the close of business on August 18, 2015. In addition, the company expects to pay quarterly dividends of $0.06 per share in the next quarter.

Webcast Conference Details

Ormat will host a listen-only webcast to discuss its financial results and other matters discussed in this press release at 9 a.m. ET on Tuesday, August 4, 2015. The live, listen-only webcast will be available at www.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 Events & Presentations in the Investor Relations section of Ormat's website.

An archive of the webcast will be made available on the website under Events & Presentations in the Investor Relations tab.

Participant Telephone Numbers
Participant Dial In (Toll Free):  1-877-511-6790
Participant International Dial In:  1-412-902-4141
Canada Toll Free 1-855-669-9657
   
 Please ask to be joined into the Ormat Technologies, Inc. call. 


CONFERENCE REPLAY
US Toll Free:  1-877-344-7529
International Toll:  1-412-317-0088
Canada Toll Free: 1-855-669-9658
Replay Access Code:  10068472


About Ormat Technologies

With five decades of experience, Ormat Technologies, Inc. is a leading geothermal company and the only vertically integrated company currently engaged in geothermal and recovered energy generation (REG), with the objective of becoming a leading global provider of renewable energy. 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 69 U.S. patents, Ormat�s power solutions have been refined and perfected under the most grueling environmental conditions. Ormat has 470 employees in the United States and over 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 installed to utilities and developers worldwide, totaling over 2,000 MW of gross capacity. Ormat�s current 647 MW generating portfolio 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 February 26, 2015.

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 Statements of Operations
For the Six and Three-Month Period Ended June 30, 2015 and 2014
(Unaudited)

                         
     Three Months Ended
June 30
 
   Six Months Ended
June 30
 
    2015   2014   2015   2014
                         
     (In thousands, except per share data)     (In thousands, except per share data) 
  Revenues:                       
  Electricity $   90,926     $   91,692      $    180,879     $   186,509  
  Product     49,561         35,911         79,839         83,530  
  Total revenues     140,487         127,603         260,718         270,039  
  Cost of revenues:                       
  Electricity     62,522         67,322         118,103         124,356  
  Product     27,182         20,324         47,807         52,267  
  Total cost of revenues     89,704         87,646         165,910         176,623  
  Gross margin     50,783         39,957         94,808         93,416  
  Operating expenses:                       
  Research and development expenses (income)     414         232         777         145  
  Selling and marketing expenses     4,283         3,216         7,716         6,595  
  General and administrative expenses     7,443         6,072         17,647         13,668  
  Write-off of unsuccessful exploration activities             8,107         174         8,107  
  Operating income     38,643         22,330         68,494         64,901  
  Other income (expense):                       
  Interest income     44         90         53         201  
  Interest expense, net     (18,859 )       (22,072 )       (36,687 )       (42,590 )
  Foreign currency translation and transaction gains (losses)     (571 )       (55 )       (1,937 )       (693 )
  Income attributable to sale of tax benefits     4,731         6,130         10,283         12,847  
  Gain from sale of property, plant and equipment             7,628                 7,628  
  Other non-operating income (expense), net     (1,675 )       343         (1,392 )       406  
  Income before income taxes and equity in losses of investees     22,313         14,394         38,814         42,700  
  Income tax provision     (6,056 )       (4,967 )       (11,515 )       (11,287 )
  Equity in losses of investees, net     (984 )       (114 )       (1,759 )       (311 )
  Net income     15,273         9,313         25,540         31,102  
  Net income attributable to noncontrolling interest     (859 )       (177 )       (1,094 )       (414 )
  Net income attributable to the Company's stockholders  $    14,414      $    9,136      $    24,446      $    30,688  
                         
  Earnings per share attributable to the Company's stockholders - Basic and diluted:                       
  Basic:                       
  Net Income (loss)  $    0.29      $    0.20      $    0.51      $    0.67  
                         
  Diluted:                       
  Net Income  $    0.28      $    0.20      $    0.49      $    0.67  
                         
  Weighted average number of shares used in computation of earnings per share attributable to the Company's stockholders:                       
  Basic     48,881         45,606         48,063         45,545  
  Diluted     50,600         45,963         49,444         45,827  
                         


Ormat Technologies, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
As of June 30, 2015 and December 31, 2014
(Unaudited)

           
       June 30,     December 31, 
      2015   2014
               
         (In thousands) 
   ASSETS 
  Current assets:             
  Cash and cash equivalents     $      137,665      $      40,230  
  Restricted cash, cash equivalents and marketable securities         104,870           93,248  
  Receivables:             
  Trade          58,089           48,609  
  Related entity                  451  
  Other          14,066           10,141  
  Due from Parent                 1,337  
  Inventories          16,401           16,930  
  Costs and estimated earnings in excess of billings on uncompleted contracts         7,093           27,793  
  Deferred income taxes         186           251  
  Prepaid expenses and other          31,055           34,884  
  Total current assets          369,425           273,874  
  Deposits and other         18,038           20,044  
  Deferred income taxes         1,775          
  Deferred charges         36,512           37,567  
  Property, plant and equipment, net          1,519,945           1,437,637  
  Construction-in-process          277,990           296,722  
  Deferred financing and lease costs, net         25,836           27,057  
  Intangible assets, net         27,029           28,655  
  Total assets    $     2,276,550     $     2,121,556  
   LIABILITIES AND EQUITY 
  Current liabilities:             
  Accounts payable and accrued expenses     $      98,481      $      88,276  
  Deferred income taxes         975           974  
  Short-term revolving credit lines with banks (full recourse)                  20,300  
  Billings in excess of costs and estimated earnings on uncompleted contracts         49,731           24,724  
  Current portion of long-term debt:            
  Limited and non-recourse:            
  Senior secured notes          32,981           34,368  
  Other loans          17,995           17,995  
  Full recourse         17,203           19,116  
  Total current liabilities          217,366           205,753  
  Long-term debt, net of current portion:            
  Limited and non-recourse:            
  Senior secured notes          320,235           360,366  
  Other loans          255,627           264,625  
  Full recourse:            
  Senior unsecured bonds         250,136           250,289  
  Other loans          26,737           34,351  
  Unconsolidated investments         5,215           3,617  
  Liability associated with sale of tax benefits          27,298           39,021  
  Deferred lease income          59,070           60,560  
  Deferred income taxes         73,887           66,220  
  Liability for unrecognized tax benefits         7,151           7,511  
  Liabilities for severance pay         19,424           20,399  
  Asset retirement obligation          19,894           19,142  
  Other long-term liabilities          697           2,956  
  Total liabilities          1,282,737           1,334,810  
               
  Equity:             
  The Company's stockholders' equity:             
  Common stock          49           46  
  Additional paid-in capital          845,173           742,006  
  Retained earnings          59,155           41,539  
  Accumulated other comprehensive income          (8,519 )         (8,668 )
            895,858           774,923  
  Noncontrolling interest          97,955