Continues to Deliver Top Line Growth in Electricity and Energy Storage Segments
Increases 2021 Revenue Annual Guidance, Reflecting Contributions From Recently Acquired Geothermal Assets
Increased Product Segment Backlog to
KEY FINANCIAL RESULTS
Q2 2021 | Q2 2020 | Change (%) | H1 2021 | H1 2020 | Change (%) | |||||||||||||||||
GAAP Measures | ||||||||||||||||||||||
Revenues ($ millions) | ||||||||||||||||||||||
Electricity | 133.9 | 128.7 | 4.0 | % | 278.9 | 271.5 | 2.7 | % | ||||||||||||||
Product | 7.4 | 43.7 | (83.0 | ) | % | 16.1 | 91.1 | (82.4 | ) | % | ||||||||||||
Energy Storage | 5.6 | 2.5 | 123.8 | % | 18.3 | 4.4 | 320.8 | % | ||||||||||||||
Total Revenues | 146.9 | 174.9 | (16.0 | ) | % | 313.3 | 367.0 | (14.6 | ) | % | ||||||||||||
Gross margin (%) | ||||||||||||||||||||||
Electricity | 37.4 | % | 44.1 | % | 41.3 | % | 47.2 | % | ||||||||||||||
Product | 20.1 | % | 20.6 | % | 12.8 | % | 21.3 | % | ||||||||||||||
Energy Storage | 6.4 | % | (13.6 | ) | % | 45.2 | % | (10.2 | ) | % | ||||||||||||
Gross margin (%) | 35.4 | % | 37.4 | % | 40.1 | % | 40.1 | % | ||||||||||||||
Operating income ($ millions) | 28.6 | 48.1 | (40.5 | ) | % | 78.5 | 109.1 | (28.1 | ) | % | ||||||||||||
Net income attributable to the Company’s stockholders ($ millions) | 13.0 | 23.0 | (43.5 | ) | % | 28.3 | 49.1 | (42.4 | ) | % | ||||||||||||
Diluted EPS ($) | 0.23 | 0.45 | (48.9 | ) | % | 0.50 | 0.95 | (47.4) % | ||||||||||||||
Non-GAAP Measures 1 | ||||||||||||||||||||||
Adjusted Net income attributable to the Company’s stockholders ($ millions) | 13.0 | 23.0 | (43.5 | )% | 37.1 | 49.1 | (24.4 | )% | ||||||||||||||
Adjusted Diluted EPS ($) | 0.23 | 0.45 | (48.9 | ) | % | 0.66 | 0.95 | (30.5 | )% | |||||||||||||
Adjusted EBITDA1 ($ millions) | 84.5 | 97.9 | (13.6 | ) | % | 183.8 | 203.9 | (9.9 | ) | % |
“We continue to deliver growth in our Energy Storage and Electricity segments, while simultaneously signing new contracts in our Product segment, which increased our backlog by 59%,” commented
“In the second quarter, Electricity segment results were impacted by mostly temporary issues related to the Olkaria, Steamboat and
FINANCIAL AND BUSINESS HIGHLIGHTS
- Net income attributable to the Company's stockholders was
$13.0 million , or$0.23 per diluted share, compared to$23.0 million , or$0.45 per diluted share in the second quarter of last year, representing a decrease of 43.5% and 48.9%, respectively, mainly as a result of the lower revenue in the Product segment and lower gross profit at the Electricity segment; - Adjusted EBITDA decreased 13.6% to
$84.5 million , from$97.9 million in the second quarter of last year, mainly due to a$7.5 million reduction in Product segment gross profit this quarter, the low performance in some of the power plants in the Electricity segment and an increase in SG&A expenses. (a reconciliation of GAAP net income to EBITDA and Adjusted EBITDA is set forth below in this release); - Electricity segment revenues increased by 4.0% to
$133.9 million compared to the second quarter of last year, supported by a contribution from the newly addedMcGinness Hills Complex expansion and from Puna’s resumed operations, partially offset by under performance in the Olkaria complex inKenya due a combination of curtailments and lower resource performance. Management expects to restore the Olkaria complex’s generating capacity towards the end of 2021 and expects the Puna complex to generate approximately 30 MW by the end of the year; - Product segment revenues decreased 83.0% to
$7.4 million , down from$43.7 million in the same quarter last year, impacted primarily by COVID-19; - Energy Storage segment revenues were
$5.6 million compared to$2.5 million in the same quarter last year. The increase was mainly related to revenues from ourPomona asset, which was acquired inJuly 2020 , and the commencement ofVallecito , both located inCalifornia ; - Product segment backlog grew by 59% to
$59.1 million as ofAugust 4, 2021 ;Ormat secured new agreements including a contract withStar Energy Geothermal to supply products to support the 14 MW Salak geothermal project inIndonesia ; Ormat completed the acquisition ofTG Geothermal Portfolio, LLC (a subsidiary ofTerra-Gen, LLC ).Ormat paid$171 million in cash for 100% of the equity interests in a portfolio of entities and assumed debt and associated lease obligations of approximately$206 million book value as ofJune 30, 2021 . The acquired entities own, among other things, two operating geothermal power plants inNevada comprising the 56 MW (net)Dixie Valley geothermal power plant, one of the largest geothermal power plants inNevada , and the 11.5 MW Beowawe geothermal power plant, as well as the rights toCoyote Canyon , a greenfield development asset adjacent toDixie Valley with high resource potential, and an underutilized transmission line, capable of handling between 300MW and 400MW of 230KV electricity, connectingDixie Valley toCalifornia ;- The Puna power plant generated approximately 25 MW during the second quarter of 2021, and we recently reached 28 MW following the repair of one of the turbines. We expect the Puna complex to generate approximately 30 MW by the end of the year. While management believes the PUC information requests regarding the new PPA signed with HELCO will ultimately be resolved,
Ormat will continue selling electricity under its existing long-term PPA until the new PPA takes effect; - The expansion of Ormat’s McGinness Hills Phase 3 geothermal power plant in
Eastern Nevada was completed, increasing the net capacity by approximately 15 MW and bringing the entireMcGinness Hills complex capacity to a total of approximately 160 MW, which is higher than initially expected; and Ormat signed a 15-year PPA with theClean Power Alliance (CPA), the fifth largest electricity provider inCalifornia and the single largest provider of 100% renewable energy to customers in the nation.
1 Reconciliation is set forth below in this release
2021 GUIDANCE
- Total revenues of between
$650 million and$685 million ; - Electricity segment revenues between
$585 million and$595 million ; - Product segment revenues of between
$40 million and$60 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
$31 million .
- Adjusted EBITDA attributable to minority interest of approximately
As we noted in previous quarters, Adjusted EBITDA assumed insurance proceeds related to the 2018 insurance Puna claim of
The Company provides a reconciliation of Adjusted EBITDA, a Non-GAAP financial measure for the three and six months ended
DIVIDEND
On
CONFERENCE CALL DETAILS
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: | 10158320 |
ABOUT
With over five decades of experience,
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
For a discussion of such risks and uncertainties, see "Risk Factors" as described in Ormat’s Form 10-K filed with the
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.
Condensed Consolidated Statement of Operations
For the Three and Six-Month periods Ended
Three Months Ended | Six Months Ended | |||||||
2021 | 2020 | 2021 | 2020 | |||||
(Dollars in thousands, except per share data) | ||||||||
Revenues: | ||||||||
Electricity | 133,864 | 128,685 | 278,852 | 271,541 | ||||
Product | 7,410 | 43,701 | 16,053 | 91,112 | ||||
Energy storage | 5,627 | 2,514 | 18,348 | 4,360 | ||||
Total revenues | 146,901 | 174,900 | 313,253 | 367,013 | ||||
Cost of revenues: | ||||||||
Electricity | 83,736 | 71,950 | 163,587 | 143,318 | ||||
Product | 5,924 | 34,709 | 13,998 | 71,687 | ||||
Energy storage | 5,266 | 2,855 | 10,046 | 4,804 | ||||
Total cost of revenues | 94,926 | 109,514 | 187,631 | 219,809 | ||||
Gross profit | 51,975 | 65,386 | 125,622 | 147,204 | ||||
Operating expenses: | ||||||||
Research and development expenses | 1,128 | 1,172 | 2,004 | 2,791 | ||||
Selling and marketing expenses | 3,988 | 4,854 | 8,264 | 9,648 | ||||
General and administrative expenses | 18,240 | 11,870 | 36,846 | 28,615 | ||||
Business interruption insurance income | — | (585 | ) | — | (2,982 | ) | ||
Operating income | 28,619 | 48,075 | 78,508 | 109,132 | ||||
Other income (expense): | ||||||||
Interest income | 808 | 441 | 1,071 | 843 | ||||
Interest expense, net | (18,626 | ) | (19,785 | ) | (37,642 | ) | (37,058 | ) |
Derivatives and foreign currency transaction gains (losses) | 658 | 671 | (16,208 | ) | 1,064 | |||
Income attributable to sale of tax benefits | 7,420 | 5,672 | 13,775 | 9,804 | ||||
Other non-operating income (expense), net | (21 | ) | 304 | (352 | ) | 382 | ||
Income from operations before income tax and equity in earnings (losses) of investees | 18,858 | 35,378 | 39,152 | 84,167 | ||||
Income tax (provision) benefit | (4,268 | ) | (11,766 | ) | (7,275 | ) | (29,914 | ) |
Equity in earnings (losses) of investees, net | 605 | 1,658 | 1,147 | 923 | ||||
Net income | 15,195 | 25,270 | 33,024 | 55,176 | ||||
Net income attributable to noncontrolling interest | (2,169 | ) | (2,224 | ) | (4,739 | ) | (6,097 | ) |
Net income attributable to the Company's stockholders | 13,026 | 23,046 | 28,285 | 49,079 | ||||
Earnings per share attributable to the Company's stockholders: | ||||||||
Basic | 0.23 | 0.45 | 0.51 | 0.96 | ||||
Diluted | 0.23 | 0.45 | 0.50 | 0.95 | ||||
Weighted average number of shares used in computation of earnings per share attributable to the Company's stockholders: | ||||||||
Basic | 55,992 | 51,043 | 55,990 | 51,040 | ||||
Diluted | 56,316 | 51,362 | 56,502 | 51,448 |
Condensed Consolidated Balance Sheet
For the Periods Ended
2021 | 2020 | ||||
(Dollars in thousands) | |||||
ASSETS | |||||
Current assets: | |||||
Cash and cash equivalents | 250,009 | 448,252 | |||
Marketable securities at fair value | 45,960 | — | |||
Restricted cash and cash equivalents | 79,868 | 88,526 | |||
Receivables: | |||||
Trade | 137,688 | 149,170 | |||
Other | 11,881 | 17,987 | |||
Inventories | 28,526 | 35,321 | |||
Costs and estimated earnings in excess of billings on uncompleted contracts | 13,837 | 24,544 | |||
Prepaid expenses and other | 20,220 | 15,354 | |||
Total current assets | 587,989 | 779,154 | |||
Investment in unconsolidated companies | 103,890 | 98,217 | |||
Deposits and other | 57,347 | 66,989 | |||
Deferred income taxes | 124,284 | 119,299 | |||
Property, plant and equipment, net | 2,175,637 | 2,099,046 | |||
Construction-in-process | 531,634 | 479,315 | |||
Operating leases right of use | 19,765 | 16347 | |||
Finance leases right of use | 7,633 | 11633 | |||
Intangible assets, net | 185,508 | 194,421 | |||
24,863 | 24,566 | ||||
Total assets | 3,818,550 | 3,888,987 | |||
LIABILITIES AND EQUITY | |||||
Current liabilities: | |||||
Accounts payable and accrued expenses | 108,408 | 152,763 | |||
Billings in excess of costs and estimated earnings on uncompleted contracts | 13,452 | 11,179 | |||
Current portion of long-term debt: | |||||
Senior secured notes | 25,144 | 24,949 | |||
Other loans | 36,265 | 35,897 | |||
Full recourse | 56,843 | 17,768 | |||
Operating lease liabilities | 2,978 | 2,922 | |||
Finance lease liabilities | 3,139 | 3,169 | |||
Total current liabilities | 246,229 | 248,647 | |||
Long-term debt, net of current portion: | |||||
Limited and non-recourse: | |||||
Senior secured notes | 301,330 | 315,195 | |||
Other loans | 267,310 | 284,928 | |||
Full recourse: | |||||
Senior unsecured bonds | 674,643 | 717,534 | |||
Other loans | 54,961 | 59,556 | |||
Operating lease liabilities | 16,531 | 12,897 | |||
Finance lease liabilities | 5,190 | 9,104 | |||
Liability associated with sale of tax benefits | 101,883 | 111,476 | |||
Deferred income taxes | 88,156 | 87,972 | |||
Liability for unrecognized tax benefits | 3,464 | 1,970 | |||
Liabilities for severance pay | 17,691 | 18,749 | |||
Asset retirement obligation | 65,342 | 63,457 | |||
Other long-term liabilities | 6,094 | 6,235 | |||
Total liabilities | 1,848,824 | 1,937,720 | |||
Redeemable noncontrolling interest | 9,871 | 9,830 | |||
Equity: | |||||
The Company's stockholders' equity: | |||||
Common stock | 56 | 56 | |||
Additional paid-in capital | 1,267,448 | 1,262,446 | |||
Retained earnings | 565,225 | 550,103 | |||
Accumulated other comprehensive income (loss) | (7,646 | ) | (6,620 | ) | |
Total stockholders' equity attributable to Company's stockholders | 1,825,083 | 1,805,985 | |||
Noncontrolling interest | 134,772 | 135,452 | |||
Total equity | 1,959,855 | 1,941,437 | |||
Total liabilities, redeemable noncontrolling interest and equity | 3,818,550 | 3,888,987 |
Reconciliation of EBITDA and Adjusted EBITDA
For the Three and Six-Month Periods Ended
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 following table reconciles net income to EBITDA and Adjusted EBITDA for the Three and Six-Month periods ended
Three Months Ended | Six Months Ended | ||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||
(Dollars in thousands) | (Dollars in thousands) | ||||||||||
Net income | 15,195 | 25,270 | 33,024 | 55,176 | |||||||
Adjusted for: | |||||||||||
Interest expense, net (including amortization of deferred financing costs) | 17,818 | 19,344 | 36,571 | 36,215 | |||||||
Income tax provision (benefit) | 4,268 | 11,766 | 7,275 | 29,914 | |||||||
Adjustment to investment in an unconsolidated company: our proportionate share in interest expense, tax and depreciation and amortization in Sarulla | 2,899 | 3,199 | 5,364 | 5,876 | |||||||
Depreciation and amortization | 42,126 | 36,812 | 82,955 | 72,100 | |||||||
EBITDA | 82,306 | 96,391 | 165,189 | 199,281 | |||||||
Mark-to-market gains or losses from accounting for derivative | (990 | ) | (1,482 | ) | 1,096 | (2,043 | ) | ||||
Stock-based compensation | 2,623 | 2,264 | 4,720 | 4,253 | |||||||
Reversal of a contingent liability | — | — | (418 | ) | — | ||||||
Allowance for bad debts related to February power crisis in | — | — | 2,980 | — | |||||||
Hedge Losses resulting from February power crisis in | 9,133 | ||||||||||
Merger and acquisition transaction costs | 474 | 618 | 958 | 1,158 | |||||||
Other write-off | 134 | — | 134 | — | |||||||
Settlement expenses | — | 89 | — | 1,277 | |||||||
Adjusted EBITDA | 84,547 | 97,880 | 183,792 | 203,926 |
Reconciliation of Adjusted Net Income attributable to the Company's stockholders and Adjusted EPS
For the Three and Six-Month Periods Ended
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 and Six-month periods ended
Three Months Ended | Six Months Ended | ||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||
(Dollars in millions, except per share data) | |||||||||||
Net income attributable to the Company's stockholders | $ | 13.0 | $ | 23.0 | $ | 28.3 | $ | 49.1 | |||
One-time net expense related to February power crisis in | — | — | 8.8 | — | |||||||
Adjusted Net income attributable to the Company's stockholders | $ | 13.0 | $ | 23.0 | $ | 37.1 | $ | 49.1 | |||
Weighted average number of shares diluted used in computation of earnings per share attributable to the Company's stockholders: | 56.3 | 51.4 | 56.5 | 51.4 | |||||||
Diluted Adjusted EPS ($) | 0.23 | 0.45 | 0.66 | 0.95 |
Ormat Technologies Contact: VP Corporate Finance and Head of Investor Relations 775-356-9029 (ext. 65726) slavi@ormat.com | Investor Relations Agency Contact: FNK IR 646-415-8972 rob@FNKIR.com |
Source:
2021 GlobeNewswire, Inc., source