ORA - Earnings call transcript Q2 2021 | Ormat Technologies, Inc.

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Operator

Good morning, and welcome to the Ormat Technologies Second Quarter 2021 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Rob Fink of FNK IR. Please go ahead.

Rob Fink

Thank you, operator. are Officer; Chief of Smadar and Relations. today Ginzburg, Officer; Corporate call Investor Financial Chief Lavi, the Doron Executive Blachar, Assi Finance Hosting Vice President

the would forward-looking in contain relating the as Reform future to forecasts Litigation remind Before events call estimates, statements like Act expectations, Private projections begin, during this Securities we you we of defined that and information current that provided may forward-looking objectives results generally and are may to statements These XXXX. about Actual projected relate result certain those operations current Company's plans, as future from for to and of expectations forward-looking risks based estimates the future and or results management's uncertainties. on and materially a projections, differ are future trends.

of filed please as uncertainties, discussion the a and see annual on and are risks in described reports Form such that with factors quarterly XX-Q report XX-K Technologies' Ormat SEC. Form risk on For

GAAP. posted such issued non-GAAP they considered are as the during well night the the measures from call, the with in isolation addition, the measures such comparable measures reasons directly the and in in was In EBITDA. information will management's GAAP last forth that Because with for website. the should prepared these not present Reconciliations slides press accordance accordance as in be calculated set on in most GAAP, presenting to not financial as is statements Company release adjusted financial

the now at under With everyone that's to I turn call Before the Doron, to that presentation Relations that link Doron accessed call may over I to would found call Blachar. remind Company's the said, ormat.com all Investor a this like turn slide website the I'd the tab. Presentation yours. is on to like on accompanying the management, call over be

Doron Blachar

assets plans to and the are capacity joining We you our The grow This organic originally of was our X.X segments. execution significant quarter than a pipeline, Simultaneously, productive and in generating Energy storage assets in significant growth ramping construction. storage two and as you, Ormat we released energy of contribute our Thank positions to Rob, strategies. other can increasing everyone. in new acquisition generating land Electricity the growth plants morning, gigawatts progressing made us planned Ormat's Storage of for future Thank geothermal, XXXX. for our Storage today. and by quarter progress higher two The progress good secure our and by with plant to two our Nevada, closed our a with was growth. that we of we combined highlighted and Puna we and Hawaii. segment, the generation interconnection reinforces completed up power expansion than portfolio we the to and M&A complex of operating Energy achieve solar continue for stated In recently McGinness efforts our support with belief to our that goals should more

review the additional lay on XXXX end Electricity I our update further our coming While before Assi pipeline, run in annual the our target buildup I to towards Energy than XXXX. backlog EBITDA to sales of operations to the growth and of groundwork year growth, call an rate segments, future and significant regulatory results over financial and more $XXX and support Storage the we continue turn million from adjusted with in to view increased a which the tailwinds we plans. of portfolio our as will accelerate along provide

Assi?

Assaf Ginzburg

you, Thank Doron.

impacted was the second $XXX.X from driver year. product X. which the revenue the the for backlog. results financial the million, down was Slide Total decrease for prior of Let me low start my were by The product XX% quarter segment, review on

Second quarter margin of mainly than was Electricity segment. XX.X%, the XXX resulting points in lower driven $XX the XXXX, second million, gross in gross consolidated a XXXX of basis quarter by profit in the reduction

issues complexes. gross to profit related These the Steamboat mostly quarter, our This $X Electricity Brawley reduced and Olkaria, issues experienced by million. we temporary approximately

For months, $XX the same compared the We quarter income similar year. or or gross for year. the per of same million to delivered period the last six XX.X%, $X.XX net margin in was attributable million stockholders company share $X.XX quarter, to last $XX to

of to the rate costs. is second quarter movement XX% the which no lower in effective the expect mainly EBITDA approximately each rate XXXX million reduction allowances due of decreased the valuation quarter. for was than Adjusted XX.X% to material stand now in rate onetime from We year for tax the the mainly gross assuming expenses $XX.X for legal impacts. quarter, tax XX% Our second full the impacted and annual by effective increased by to second tax quarter G&A effective driven XX.X%, profit by higher XXXX, XXXX, the

X, increased revenue Slide Electricity segment X% the Moving as Steamboat McGinness operation. capacity new to to and complexes contribution Hill as at well revenues by supported million, resuming our breaking $XXX added down. from Puna

KPLC. that opening As was and new continuing to caused by added the generation the our mentioned due Olkaria remarks, offset combination lower a generation in local of this resource curtailment capacity Doron by customer, in lower performance reduction

the the in revenues $X.X our representing commercial and resolved one The we for quarter. assets California, of a revenue facility beginning of Steamboat year-over-year acquired lower throughout the contribution from quarter. April XXXX. The growth the second Brawley, that operation XX% by in was nearly in energy mechanical continue which XXX% Pomona later. the of injection revenues revenue was driven surface the our to declined total generation. mainly in a segment, million In million, Valecito the storage of $X.X -- is started backlog due few in expected reduced to In total to X% of in decline the second the Energy which increased year-over-year Products addition, 'XX to experienced wells, And from representing of leak days complex our year. the storage issue had the X% beginning quarter, segment revenue a in

for Gross of Slide for of Olkaria, the decreased margin higher X. This of to to Let's XX.X%. the a the Steamboat year-over-year repair and Brawley a the Electricity complexes. recovery segment to move cost the result related was quarter

second same the year, quarter negative quarter driven of to by in interruption the segment, was record zero to second the last Pomona addition, we the acquisition the margin Puna time again to XX.X% was in quarter a Storage this compared gross did $X.X segment In second compared related compared margin Energy XX.X% The last of improvement Products million Storage a recovery year. In margin the Energy primarily last in The positive business complex, insurance gross the a in reported to assets. year. gross year.

represents Adjusted legal X%. and segment driven EBITDA G&A adjusted of in Slide total of the as $X.XXX million restricted provided appendix costs. million, $XX.X X. million impacted and Electricity year-end. as XXXX, equivalents by Slide EBITDA adjusted storage June reported million which to segment June debt compared to the profit are as equivalents second decreased our to billion. EBITDA cash EBITDA. Products of The quarter, expenses, On was X, adjusted approximately EBITDA the mainly and Reconciliation increased The XX, second $XXX of the net by XX% generated Turning cash and slide. and segment $X higher reduction in $XXX generated adjusted EBITDA gross XX% and the of quarter, the in of total Cash XX X% cash of was

months the return our the In six of debt liquidity our cash breaks million X shareholders and of cash in illustrates to all service to reinvest and and had position. strong capital generated down addition, we cash in use the $XX of marketable operations dividends, our for form ability Slide our securities. from by business,

The as was XXXX, financing June average presented its XX net of in was Slide debt payment of the schedule long-term XX, cost of debt Our billion, on cost. X.X%. And is $X.X deferred appendix.

payment we two finance Directors new On which out were to shareholders Terra-Gen authorized raising HSBC day record closed of dividend approved Bank. policy. XXXX. of the the dividend August will on business on quarterly million, of close be $X.XX $XXX paid $XX July, to XXXX, of Funds pursuant green declared of per provided used corporate X, The the XX, the September as loans, dividend are to of XXXX, and Company August of Board During share, by bonds Company's million acquisition. X, approximately

some pay expect dividend I of three would to to $X.XX developments we over in for quarter. addition, That to a Doron next to call share next years. financial discuss of the my recent and growth plan the In turn like the the like Doron? per overview. concludes our to

Doron Blachar

Thank you, Assi.

by the will other continuous Hills continued tons the X,XXX to the generation Hills offsetting last in to portfolio. XX month now approximately the in mid-XXXX, and of level contribution at shortly. partial and operational from that issues at Olkaria electricity second U.S. emissions, a plant homes, look for Turning curtailment for performance offset were elaborate delivering contribution for McGinness facility geothermal while of in X.X% lower by McGinness our approximately one the completed and efficiency operating capacity. providing of the approximately our in In of year. partially incremental compared our highest we and power Hills industry. XX,XXX still recently field the Steamboat Power our started quarter, operation and of I power that the in Puna see plants that generation These expansion increased are We safety of approximately Slide is operating the COX

in operating addition portfolio, an megawatts XX assets, the we the gigawatt increase X of running of quarter. second the electricity With acquired are

XXXX. resumed operation noted Puna in on November XX, As Slide

ramped last turbine, megawatts XX We XX up generation report. our quarterly have the megawatts Puna of from repair to approximately a following in

year-end. expect reach XX megawatts We to by

about with our the existing under effect the PPA HELCO We in PPA, continue and continued electricity end which have our is of selling XXXX. PUC until and discussions new

Turning to XX. Slide

Kenya. I the start a some challenges our the known me assets, Let with quarter this experienced operating of of in and few we one will discuss in

a the Olkaria reduction has revenue million. capacity result and of Our reduction in combination by generating performance approximately in gross as reduction which results. approximately continued The was of a quarterly megawatts. of This margin capacity the a of in reduced in of curtailment $X.X down XX complex our resulted year-over-year

the We Kenya year. restore are the an end optimistic and continuous in generating capacity by drilling are and of operating through will we the increase production in campaign complex to throughout see the

is similar revenues capacity We reduction until expect a restored. quarterly fully in

the We expenses reduced in and complex, loss megawatts. injection of gross we a The one million. the had pump wells also approximately the at a to the Steamboat by Brawley production back to now is caused one full wells the failure X of of complex our In $X reduction that in resulting in a Steamboat capacity complex, margin and revenue leak experienced mechanical failure that generating increased operation.

Brawley. at production full We are restore working to

The XXXX of second the updated the power plant, guidance and accordingly. Olkaria performance impacted by we will of Brawley annual half and be have lower our

This of XX. to July, the our asset. total accretive capacity we Turning generating Slide the acquisition acquisition of approximately net a XX.X added megawatts In portfolio. closed to Terra-Gen

and being requirements forefront in bought transmission the companies renewable mandates This these we now The line, makes and increasingly In place resource in on greenfield more energy. Dixie looking kilowatt Nevada remains important. XX own renewable to of considered. the Valley for is operating to plants of plants with capable we are XXX XXX at California acquired a in XXX the of transmission asset potential underutilized Dixie addition, generating reliable Nevada, California. supportive already centers the the and increasingly California megawatts. adoption California to and dynamic XXX With adjacent in affordable megawatts important. high an Valley electricity, with between of development both proximity acquisition, and Utility connecting energy driving of total to handling line population this

update Turning on XX to backlog. for Slide an our

year, While the beginning impacted encouraging backlog by continued are recovery. see to our lower to the the starting segment at we products signs result of be the of of

of phenomenon. We have an seen business, our that short-term clear this reinforcing this a in signs backlog, confidence improvement including of is expansion our

We the megawatt early the including in segment, been contract in in has accordingly. products segment product during recent backlog revenue XX compared and during to products contract a increased by quarter, to X, the the weakness this with this million, products reach Indonesia a offsetting a year. million product our Storage of $XX our weakness contracts geothermal Geothermal new few signed to our continued supply $XX equipment As new $XX Star plant have adjusted May anticipate annual and Salak power Energy August consistent another improvements XXXX million supply Despite Japan. to XX% XXXX, in in a of in guidance Partially Energy our improvement we segment. to segment

at continues consolidated mentioned important earlier of become and part XX, more business a I Slide as results. our As discussed this to

quarter, due the positive to in Coast we The higher EBITDA, and and new Texas prices. higher East enjoyed our and projects for generated market construction segment both California. two This projects in again Ohio storage revenues released

with only firm for resources, the and excellent XX. Moving to electricity XX.X CPUC generation. I natural to carbon-free gigawatts of of fuels is the more independent. of deliver the Imperial be and in fill for Geothermal factor, of this and new [indiscernible] fossil power poised increasing and must weather mentioned not One baseload and deployment with by service implemented new load is efforts geothermal a firm this flexible by X to we entities, contracts through California. this the energy California energy the achieve emissions a XXXX energy No to requiring renewable complement and for reliable in to power geothermal, in LSEs, produce quarter XXX% factor our previously is to renewable did CPA as intermittent of clean electricity XXXX. form an this us Heber Valley, XX% renewable energy generation California replacement nuclear generation. XX% demand supportive its XX-megawatt resources procurement with gigawatt an zero on-site than by storage electric plant sign Slide ruling enable capacity goal geothermal need procure massive mandates for being state. recent but and affordable energy example capacity

request our issued ever for for our for also first look partners. X actively the for storage and Heber bids opportunities XX-megawatt We

Moving XX. Slide to and XX

XXXX. XXXX have our will portfolio communicated, XX% expected almost year support we of significant the geothermal by mainly robust plans, which As be increase buildup buildup of our a is end projects. comprised growth by to This total

in increase is us above our XXX more Achieving XXX end million add growth as beginning by of XXXX. onwards. Our our medium-term growing year-end of an the expected in by goal enhance in plans that megawatts segment megawatts to plan in Electricity to we XXXX. XX And XXX to the the megawatts to by rapidly additional Energy this portfolio, an with Storage since growth year-end the to goals. XX portfolio $XXX the XXXX, XXX added and rate XXXX our annual EBITDA target reach growth is projects our underway to to to XXXX grow we run than adjusted and displays Slide we of of majority forward continue XXXX help comprise expect towards move XX that our

the track experiencing While XXXX. of we process, we delays still the end for in our are are meet some to targets permitting on growth

Moving Slide XX. and XX to

Slide two The we growth Green facilities have construction. second Energy or layer XX from announced construction, demonstrates for comes our projects Storage released segment. storage We energy the now new of X. Pomona started the and Bowling

obviously interconnection development, justification. in stages the included projects agreement, execution of control an other and all of and different are will The our to subject in release require site plans economic growth

at potential New can gigawatts includes Slide energy XX California. in Texas, and XX, projects, currently mainly you stands and on storage our pipeline named X see As Jersey

require and segment lines Moving in To significant The investment this credit. of cash to $XXX the of capital fund Slide both XX. Electricity robust growth growth, next available storage and we our million over couple have of over years. will

capital previously revised our recent which our discussed. discussion initiatives. turn capital Slide $XXX expenditures, acquisition account is of of to as and future and Ormat XX liquidity total other with remainder for the capital positioned Our Slide appendix. Overall, in XXXX guidance, to spend access to ample development expected on has for includes approximately to XXXX excellent additional Please million been XX the fund for detailed well a for

revenues million revenues $XXX million $XXX We million, and expect $XXX segment with between $XXX and total Electricity between million.

expected We million $XX segment $XX million. expect for be products and $XX Energy Guidance revenues are between million. $XXX revenue between million Storage to to

EBITDA $XXX $XXX expect to million. adjusted We and between be million

million. to approximately We be minority expect interest to EBITDA annual $XX attributable adjusted

in for remarks. insurance noted approximately million. $XX This concludes of As our XXXX quarters, EBITDA previous guidance includes prepared proceeds adjusted

like to you please? questions. I'd Operator, the for Now open call if

Operator

Kaye our come And Oppenheimer. will first Noah Instructions] from of question [Operator

Noah Kaye

start, wrong. raised just XXXX correct like Terra-Gen to looks me target And completed. please you the guess it geothermal acquisitions I'm size for portfolio you I your if

of organic that other In XXX megawatts words, of the upside? roughly growth that? target? further remain think there. organic any would Or as additions kind Should about your targets same an So just in we is be M&A further of part being M&A

Doron Blachar

organic. Thank The you the growth for targets are question.

additional similarly, we was they And on that. have will Terra-Gen on So be if top top of that. of acquisitions,

Noah Kaye

seems transmission stages geothermal new would Okay. And using solar Can bit the might a most What for expansion likely sense? What planning when about little make initial line? you plans facility? underutilized transpire? most talk the in that and a that

Assaf Ginzburg

Assi. is This

two So we basically, have options.

is electricity option to first to planning and this are and The add and to them Nevada, line. to, with more to assets like we in -- continue develop more move California

there Although into have be calls as our bottleneck California to -- a need we control in will take mentioned consideration. that in to during we is before,

second knowing of the time. a PUC be there California And parties that's use something this to this the venturing capacity to line California. now looking into, keeping our requiring why renewable is to will by very The over either renewable fact the in the asset, utilities party. is joint that's option offering others will of to good I think is also a say or And amount third that capacity we're ourselves. allow to third and to access it lot the in we And especially doing baseload while by demand increase

third-party to or course, of and All in either capacity, the of using to subject the the increase it, bypass bottleneck ability it permits area to lines. is by control the

Noah Kaye

is next really helpful. around Okay. That's operational focus. question The

of that to any you trying leak at here? The the some we're surface at issues are Brawley, called what issue threats common understand is, -- the transformer out think to Steamboat. there I

You to Olkaria. about talked us before

for to are lot pain timing like You labor the a of availability common those. a you're overcome pushed of right some issues. permitting what how been everything we've a with understand from mentioned seen certainly, Because just has out of thread little now delays to project Is looks bit you of those? any working common logistics that companies a kind thread? couple there to points struggle there's new the your and for I if and for want

Doron Blachar

similar is somewhat. states, any look answer no. And trend technologies countries, different different about all these. don't see simple The you No. We of different between

think I its own is we've So years needs be maintained situation. been one operated. has asset that and each unique many asset Geothermal operating an to for and

COVID, of much. and the permitting This one together. the But related that's in related causing usually, that no the them. And there's the but Different all working maybe that said one, does office, quarter, not too the that so fact only projects. in some common that not to to some the other last is you all of them have the of their is in don't items regulators, different thread one delays they are happened And locations. working happen of BLM items from

only, the common think, I permitting that's So is issue. denominator across projects the

Noah Kaye

think, dialogue us you're you update regulators. board some give of briefly Can and an committee of independent the that the Okay. with having And touched you just some I on there? last quarter, review the

Doron Blachar

regulators. you don't to cooperate update, is time any only I continue the frame The have common for investigation. we I thing We that's and know that with quite can think this

finish until on elaborate it As and what we they're its customer, doing. they can't

Noah Kaye

You they, what I or doing? you are the mean mean apologize. the regulators what committee

Doron Blachar

you from cannot this until them. I fact is finish. that would of you not thing anyway, this say you But the know, is infer okay? The common, one that, quite other should anything comment they as probably Both

Operator

Securities. Julien with our question And of America come from Dumoulin-Smith will Bank next

Julien Dumoulin-Smith

in and first I geographies wanted on your just one, of talk some the decades. here opportunity. to revisions couple pricing have of repricing in, about, the upwards start pointed Admittedly, of frankly, peers in to some California a off your sharpest

and contract that if to some Nevada expansion as, the negotiations expirations of those of curious, transmission acquisition maybe speak you But associated the extend, of ability of you contract out any you the opportunities expirations perhaps and/or these geothermal to blend some which the in some some have necessarily not what status latest of well preemptively line will, near-dated therein? derived opportunities. extent future address as I'm in to are, don't So mind, if to repricing the the opportunities on and

Doron Blachar

is And confirm Okay. Well, pricing obviously, definitely in and I few before. you got leads an We demand can California. energy requirements states the said. decision other Thank something renewable you. much we that for California. greater over with see intense and more mentioned last uplift see to what a around CPUC much I that the weeks, that happened in actually, in This

and call, our X We it. mentioned, in -- are MCCAs, the basically, if various various a issued discussions stronger you I that are feel for on PPAs, in for Heber the we request also much in fact complex bid, offering utilities, bid actually we discussion. today we to other the to

market this think, we approached order a line it the from the after is situation I in utilize been which connecting jammed. The definitely, can by and is combine California. line, current Nevada to we've Nevada and to companies control unique to how is transmission quite required. the is electricity long mentioned, asset to it's are a that transfer So And see our to transmission Assi gets benefit. substation, various discussing changing forces we And as to wherever time, regarding

Julien Dumoulin-Smith

the therein? pricing is the a pricing Got on be Heber any it. and obviously, And may about this comments current as transient. contracts mark-to-market but here? that know you mean or complex over balance, the based over on at But on And until I see it the maybe time just it's not net And in time? somewhat or look signed. whether you think your repricing here tomorrow, the Brady, across as you where can't portfolio, obviously, I understanding Steamboat say you do increase --

Doron Blachar

think, signed not when also negotiation is and on pricing, Campbell as in we terms it's that I others XXXX track for it's is say back, PPA because sites might the depends hard Pressure I'd coming Okay. Don still not That high on time very, very we as much enjoy site-specific. XXXX It's well. lower. agreed higher site-specific. the it the and but $XX. And very of as start some the

Julien Dumoulin-Smith

focus it. in their some to Got the extent efforts the curtailment directly potential can them comment and if are any suppose if just here? to specifically -- Kenyan And Kenya And of perhaps on relief efforts? cost-cutting and/or Can status the abroad Excellent. here updates I in and other And here. -- other pivot side their with any around what that? back you I the relief you on engaged should conversations broadly, we but of any say more of on investigation cost-cutting

Doron Blachar

Look The start Kenyan the basic project government-owned And KPLC, with basic. is that's previously, the The basic. the bank. is a with financed by we which have the that signed a contract DFC company. U.S. utility we can government OPIC,

in to in you other press energy situation us places, as make Kenya. Ormat prices. looking for been about the have more longer. whatever renewable set. Ormat We trying there term. because find operating And operate room and to a discussing the general, has have win-win And see in of in And years, customers. win-win both been that the for always in committees parties. Kenya committed supporting long some to we will Kenya And in to XX reduce do set the with these There energy expect we in situation we be were player the and and, there, We're as to think, long-term well I we this. there's and for Kenya We've discussion its a a is agreement than Kenya for for always in will mentioned, seen, at been with for very look

discussions discussions. this some at very, very it's Although stage, over but there, early

Julien Dumoulin-Smith

broad the bit. mind Do a you -- this time of X-month for you process. ongoing been a clarifying it's it think? that supposed to of But Is it's as be know suppose Right. sense that I it say, line? on was still, of year something and Any early Kenyan, kind I resolution time line? you

Doron Blachar

of any them. time in don't from We rush. no sense No. are Obviously, we have any line

sense any time line. of no there's So

started in are we us early said, not they with other IPPs, as I Ormat, general that last but at month. As discussion with discussion very, well targeted general as a very

Julien Dumoulin-Smith

it. Got

scaling sorry, just efforts respect been to comments impacts, one efforts their efforts, any storage Any last and therein on And questions the been material I deviation? and people your underway et here, availability able specific as budget being of cetera. terms on here. just in time to execute With pricing your apologize. there's have on just

Doron Blachar

No.

Our are on presentation time. are on that plans the

batteries. have all required spec-level required, We

on a with long-term pricing. agreement have suppliers We with battery commitments delivery and

So as be as long projects as we time the contract, they stand all with on with the we them. should announced

Operator

from Our next Osborne Company. with [Operator Instructions] & Jeff Cowen question comes

Jeff Osborne

moving parts. my the I on some couple the a Just to you guidance old new guidance wondering and a was end. if of could give us walk on the

you've relative have the the if the three underperformance I to wondering and then was you could adding you of sort sites. is the the acquisition gap the what the of bridge acquisition, obviously had So at deficiencies three locations? of

Doron Blachar

we hand, so of addition the of Terra-Gen we the a announcement items worked guidance. On there the basically, million a the that, is that bit closing, XXXX, $XX the months, upgrade Terra-Gen. need In one of EBITDA. system. Obviously, said full and to expect we we six Look, Okay. the through don't two in have

positive. the that's So

had we have quarter. we higher we the issue side, mainly in legal in -- [indiscernible] significantly expenses negative Kenya, I that this the the mentioned that also Brawley. and And the On that

Jeff Osborne

no? the without a the down Brawley acquisition, the it expenses with been safe have Olkaria but and facility, and So is assumption, legal would or the guidance

Doron Blachar

fact come say, But Terra-Gen I consideration will is into $XX will offsetting not projection have Olkaria Electricity don't the Brawley had. If in the, the issues changes what Steamboat, the million you take the the was on that guidance we of by the we segment. all or that beside product lowered segment, of and down the

Now normal. back as script, the capacity. to Steamboat the we of by do full back year said we to And on to Olkaria expect the go is end already

Jeff Osborne

Julien's on Got it. question. And couple follow-ups just of a

Or payments? Kenya, can the capability due on they or becoming on terms? payment their So touch past current you the on are

Doron Blachar

they've the but As payments I the are all general, year. making the has since ongoing few very quarters, end I the July payments, been But in all paying they ongoing They due making last as said payments. the not in the of are KPLC lot actually on say, of progress of XXXX, in of will a payments. making good making been

Jeff Osborne

to coming sizable M&A touch you or on can or other Do That's two not? the quarter acquisition what like? And looks hear. any good then similar in anticipate the Terra-Gen you pipeline to

Doron Blachar

Honestly, storage any I That's, in can are time. specific at we we most for this we cannot storage and mainly comment at say say acquisition. the M&A. think, opportunities, solar various M&A on energy the I can that looking

Jeff Osborne

last for renewal And just any Is it. question other Got up following was X September RFP around question pricing. have that than the the on facilities Julien's up Heber there of in for are contracts again outstanding the that you XXXX existing response?

Doron Blachar

first I 'XX. the think in 'XX, one is in not

Operator

question Lowish And David our Atlas. comes with next from

David Lowish

here Impact David Partners. from Atlas

in being you XXXX? in on talk comment if what terms quick me through question, I may? of mean just a about financial Hawaii the your implications for Can you suspended. now PPA and and does Just that specific Just of new sort

Doron Blachar

megawatts. that We PPA of generation PPA refurbishment that existing the we included the PUC had about facility -- and that, have of years. have would taken two the us XX the following to increase suspended the new an about would And

a of the megawatts PPA for end XX today have 'XX. We until

the delay and suspension So any have approved. PPA X might specifically, once is of XXXX, megawatts about impact. the a of is of PPAs. this doesn't The something XXXX real it or year impact again, additional But have a for

Assaf Ginzburg

side, are current prices to $XX XXXX. other actually in now. getting prices and made If actually the is the in add, what $XX revenue otherwise we're Puna higher more the would than new somewhere may have therefore, Oil we PPA. And between on David, what right are is XXXX than I

it that good one on is get why will this return push many think of over at us. hand has PPA. there of will it PPA. capacity the So is average customer a because impact more of point, there decision And the many, lower and years and positive this extension try very what to for price And reason we the that's in a we on more our

David Lowish

you it the is with has -- that that why problem was could just sorry, what And clarify PUC again the PPA?

Doron Blachar

They've see and to and or doesn't the to PUC local them not. require the with study the reached problem or actually DLNR them county need to a environmental impact an out The asking do PPA. we have if

plant power years. the raised many PUC is So question. the opening The for

and this there. not of will discussing been county, PUC emission new a change plant, plant And a a less be and there for the have think efficient. is we and think smaller site such also the newer need we with there decision a the But will We geothermal power study. over more the power the don't study facility, plant because operating power a do is DLNR

So actually, from the PUC environmental the positive. perspective, it's But a still, that. suspended

You can ask need study. them impact do environmental to an not we whether or

David Lowish

Because time? sort to that should it the means effectively of something of with And of potential regular haven't that recurring what's you hit. Okay. $X I sort trying of bit of on these I just as is both think how understand -- we about do we the, about you're, think an is Got Brawley? I guess, it think of this sort that this million that's think happened? a to as the it's sort come investors? have of issues to these of the at sort frequency you that offsetting Steamboat, that? should just that a of at you're just M&A -- Or sort you. basis? same extent, is a you And -- clear. Would I'm you technical happened characterize how some acquisition, the How of just can back but we Can unlucky sort about -- think should

Doron Blachar

year, fact unlucky. in one or that This I'm something, No. 'XX -- are that can for we quarter, in item tell they years, which is think quarter, is I the one we that a we I'm happen, issues, not unlucky. all here might And eight very that quarter only I you try same to sure both had they unlucky and is to maintain having had mechanical they of the similar combined the because had that, in same issues that any few power avoid like in occurred we them this but a the plants occurred but that quarter. do at

Operator

from comes question next Bank our with Fried Ella Leumi. And

Ella Fried

a questions Well, couple I have of left.

question The broader you broader more could, the product the and if geothermal the or a segment. is one energy discuss, to aspect first request look at the commercial of

the in think the to countries, the it will -- few sector pre-corona sector for the a you you you ago? general slow As in product Or levels? do demand actually and return specifically? your the the to many for and mainstream closer like of are see in has that the levels the current see energy Or years wind return product if like a very coming sectors be levels the assets on decreased to solar increase

Doron Blachar

Thank you, Ella.

move a a see geothermal move to we everywhere. everywhere. So more to We more see renewable

actually seen few and more trying on plants. tendered the globally the last a developers Over new on segment geothermal product months, projects we've recovery power develop more being to

this up this continue today. we and we and but at also that tendering last are will quarter, when we Our that the went negotiating look pipeline we quarter. backlog And trend contracts that this the have hope

energy. the basic wants for is On of CPUC an has the demand to we think gigawatt outcome of I develop demand availability, This that, only geothermal. outside geothermal U.S. that X the the out U.S. Any renewable see of XX% in of this gigawatt increased baseload XX.X And potential renewable basically is country energy. is in which see requirements geothermal. geothermal, geothermal. we general, of the with the And of

Ella Fried

Only?

Doron Blachar

Yes.

increasing. demand this see we So

CPUC PPAs. we've think, day of by to sign this following, approached been after looking have the been We some -- ruling, a CPAs I approached

in So and for or see U.S. will a the returns see energy actually that support We change to the don't new the demand geothermal. in energy, act the in continue the including market. renewable we a geothermal. administration for geothermal Biden storage globally greater And looking we're

Ella Fried

a at million, if possible is be three feasibly Or $XXX we million will $XXX year, say, over the two, demand? you think it look it levels years? of So in let's slower the next,

Doron Blachar

Okay.

need to I think the follow backlog. you

product anything like ahead. know that We I sign as As that to But expect now that. million of support years. year will good the don't guidance would increase, the I it a $XXX backlog one we segment think, revenue or go is the give grow. revenue I backlog say grows, will to reach the into future

Ella Fried

first Okay. about, about is territory. agreement If remember the I And that the Japan. existent, with regarding actually mentioned if priority still mistaken, it's you don't Japan. ORIX Japanese I'm in know historical question time And I having you not actually had next that's the

So words if Japanese project you a say that mentioned? could few about you this

Doron Blachar

a one. see in ORIX different in It's project smaller to The The It's in still we the Japan the Japan company. past. connected Japan not done -- in is large projects most few a of a are is agreement project. fact. not ORIX. We've the with that

this So have we projects. But stage, will a we to do But priority. If a have any they will we do at able priority. be we'll don't it. so project, soon-to-go have hopefully,

Ella Fried

I see.

kind a it's of So stand-alone this point. at

in about Because an $XXX increase can you two debt, together, -- development increase could numbers if has. quite if at be the there to but of together, the next kind the assume I'm during area? that of the or not the relate we net of also that Company I this Okay. -- the general, least net spoke question, you numbers let's about in will I modeling I'm XX% of, seems the when mistaken? debt But be put an say, And years -- expect financial resources about just when there

Assaf Ginzburg

So is I answer. Ella, Assi. will this

As we it transaction was roughly July total of the assets of We billion. for in of end the the million. $X Terra-Gen the of $XXX -- closed do a expect quarter

towards increase of million. net if the you invested already the we XXXX, our we us we be of end to during take consideration, for for $X.X $XX to that's building, immediately debt-to-EBITDA. then at point should roughly the you of our our will now CapEx. debt closer that was put Net North will majority to $XXX million amount assets will that for guidance start amounts already but CDX, in at that will of did cash why will at you And additional to them roughly the of Meadow, free billion. look give And increase And closer when billion. result that to, you that million if million. the the this year, into Xx roughly the majority in $XXX Valley EBITDA, I debt invested. it year flow, net page say, all of $X.X end our are though, EBITDA that roughly debt from When at $XXX the net point Dixie the So look net back of debt the until look most to be of will the to of

Operator

And of is of question our next Securities. Dumoulin-Smith follow-up a America Julien from Bank

Julien Dumoulin-Smith

the top you want I target. the so sure rate. we're make have targets all but a Terra-Gen despite of you talked this that many your go balance you've had year-end back whether very that, 'XX the talked incremental segment, to be put I crystal to indeed sheet, it's product target number I or just about today, use that pulls, you want recently? call, approved because, transaction to the there et guys. at puts perhaps, that the rate about here Because cetera. your that about year-end I And Sorry being run to and clear all PPA, that, right? clear Hawaii all organic just just at to out run is you of want incremental to target Terra-Gen of

Doron Blachar

million, we see than $XXX quarter be Terra-Gen. including will we a We approximately little Look, bit Today, million. the more was said believe last $XXX $XXX more than number that million.

in delays full EBITDA, EBITDA. the have planned impacted of Some XXXX permitting potential the

$XXX will impact Terra-Gen be we So to But at the that the top full million. we be million. above $XXX time, do say of expect of cannot this on

Julien Dumoulin-Smith

just transmission clarify is want you All to putting of sorry talked right. right? this talked I there. have And about about part time That's transaction. just and piece Excellent. you here, to sure line already, wanted -- make higher but right the of then to this, you in earlier, the all I investment terms line work right? transmission that Yes, costs, that own to clarify you Okay. You interconnect here. interconnect valuable all this transmission heard already this the I as

Doron Blachar

substations are connecting and other the line asset control an and or can bypassing the is line be to this is either we see approached PPA. companies control it fully own us We of an have over correct. of the line this transmission Nevada the to XX-megawatt that's and today, line. output upgrading generation capacity. because with working And transmission other Dixie underutilized wheeled only Yes, additional transmission how that What can with the additional said utilize the that we we And California substation. substation to

next additional asset years So an few will utilized the and that this not utilized. is is be

Julien Dumoulin-Smith

it. Got

you if to that, the Just cost clarify line interconnect incremental transition into the transmission because have the already CAISO, the that's itself?

Doron Blachar

yes. Yes,

Assaf Ginzburg

added The above connected capacity the we that the CAISO. to megawatts capacity if the already -- above XX added

Doron Blachar

Julien? Hello?

Julien Dumoulin-Smith

Sorry. Could you hear there? me

Doron Blachar

you, We didn't Julien. hear

Julien Dumoulin-Smith

fact line, you transmission that, on own interconnect upgrade It will cost with I was just just RFP? will expectation this apologize. the capacity And suppose that be transmission to summarize scale the that ability in your not site. upcoming then to California a the I once you participating that into that the resolve up you California, unlock respect

Assaf Ginzburg

that, I would capacity there not of the that's that say for go try to in control to control bypass system. we will and way will a utilizing is third-party why also say increase sure, And lines. I

is I in future think to be discussed So calls. this

Operator

our turn remarks. any to concludes I like session. to closing question-and-answer this Doron the for And over would conference back Blachar

Doron Blachar

Thank you.

So everyone. a you've seen, This you, thank quarter. productive as was, very

the U.S. focusing in the see business and and energy demand investing today California to outside of Thank and to in the the meet and increasing geothermal in We we the enhanced are our continually that storage on in grow you. order portfolio

Operator

for attending Thank you The now concluded. today's presentation. conference has

You disconnect. may now

Ormat (ORA) 7 Aug 212021 Q2 Earnings call transcript