ORA - Earnings call transcript Q3 2024 | Ormat Technologies, Inc.

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Operator

Good morning, and welcome to the Ormat Technologies Third Quarter 2024 Earnings Conference Call. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Josh Carroll with Alpha IR. Please go ahead.

Joshua Carroll

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

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

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

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

would to link call to over CEO, on to at on presentation like Investor website the that's the I'd the Doron? Before slide accessed Presentation Ormat's accompanying turn over said, tab. With everyone that the under call I Doron maybe a the found ormat.com Blachar. I Relations to call now turn management, like remind this that company's

Doron Blachar

today. you, Thank us everyone. for and you good morning, joining Thank Josh,

to strong quarter, achieving third significant continued results. the while delivering financial Ormat also its growth long-term progress targets, towards make During

strength by adjusted segment, of which Puna portfolio, solid increase a the performance at quarter benefits our continues financial operational highlighted improvements, Our quarter our XX.X% increased In business, global strong California. From project the we we experience growth to tailwinds the a macro operating to continue driven consistently was which and more during see hour in Texas, by performance we the in quarter performance the XX by of to operating and to industry growth. largest was EBITDA, megawatt from demand we our as This prices. Within generated our operational that progress to of a of from and portfolio, storage commercial the the quarter profitable assets we higher portfolio, in our during X signing setting recently stable our and the another by tolling facility consistent improved for facility, operation operating the Energy RA achieved PTC have massive energy growing marked Bottleneck from in support highlighted progress for in driven EBITDA agreements strengthen. acquired significant driven we of made our stage momentum the Electricity third contributions increased transition related Storage for Enel an announcement accelerated renewable is by X recent our data megawatts/XXX centers. the agreement in the perspective, California segments, in our signing

sign Our to while will additional which continue strong is prices, product our backlog. continuing contracts these to strengthen business well trends, elevated very on capitalize maintain at and positioned segment long-term to ability

long-term us operating to these trends over growing of expect approximately goals end reach by the to and portfolio our We of time our profitability X.X to our that X.X improve XXXX. should allow gigawatts

and in among news we In established independent committee anti-corruption published compliance share claims other by you I related a good investigation by the Exchange would has We requested company the and Assi, the company this to regarding March staff short the XXXX, Department of made and with to with investigate, Securities SEC action we intend Justice against directors seller special law. to were recommend notified the by call the a its to report SEC transfer I as received. October of the a does of things, we concluded these information that to an time. recently provided certain Commission Before like not XX, claims. XXXX, at enforcement On

program happy of so we commitment have the day. to this every company's to behind the of devote and are important and compliance work can our proud are strength compliance the does attention Ormat We to our us we full

our will to over the Now, further on updates before I plans, I call the to for review financial quarter. Assi operations and provide turn the results

Assi?

Assaf Ginzburg

Thank you, Doron.

our review the Total start of a me my million, revenue highlights of financial X. X.X% on increase $XXX.X third on basis. an Slide quarter Let was year-over-year for

share related by tax income previous and decrease slides attributable appendix income third was $X.XX diluted Reconciliations quarter XXXX revenues. Net or last of net company's share the was to our year. of top XXXX, in laws. Adjusted net in per income resulting income growth provided was per versus $X.XX Our $XX.X Ormat's profit was of margin XXXX presentation. in a company's diluted consolidated period. consolidated quarter solid line in the million $XX.X the tax share the the in of segment, adjusted quarter in $XX.X $X.XX of Kenya of are in the stockholders diluted in $XX the captured million to or the quarter back to third mainly year. the EPS million segment's to stockholders to the driven million attributable by during expansion was the share $X.X in XX.X% $XX.X per compared million quarter gross million to XX.X% recorded Electricity a or changes per year's $XX.X quarter million predictable the in as diluted net third compared X.X% a $X.XX The driven or prior third versus income and serves in the gross testament which

compared sale generated contribution in million was $XXX.X Third quarter in newly year built to acquired the power of quarter of of adjusted period. the EBITDA improved first XXXX, an performance prior in increase from year-over-year the extremely EBITDA strong from increase assets operational was $XXX.X The and plant. driven the XX.X% million, Puna our adjusted benefits the we at by plants and tax pricing higher Enel

addition, with our In the negotiated from adjusted EBITDA agreement we battery compensation during received also a settlement supplier. benefit from results quarter recently a

of this recognized XX result, a will we XXXX, started will be months over As total as million a income. recognize whereby April $XX compensation

quarter. This settlement have payments will income. the we million or quarters, They an margin. on next quarter, our clarify, will $X.XX period And the in Storage recognized operating of should to To impact XXXX. the related be not recognized as we X approximately million $X.X each September April and only between revenues recognize

Slide We million. the X. Turning Electricity revenue break at by segment performance level. the segment revenue to down to $XXX.X X.X% increased

later a $XX.X on XX.X% the the declined second same outage the an approximately in growth for signed geothermal still decline third in by the Product update to was $XX.X year. power segment the quarter at REG but year segment our assets $X.X similar last million level acquired segment partial we November to in million due new in year, our the mainly by provide quarter expected which solid includes, period the our call. The that earnings starting to of Dixie revenue will period the of quarter. addition during by million backlog of in campaign. strong, second The and declined million increase plant backlog was segment, driven Dixie at in weaker by Valley. In as million Products Puna to manufacturing year Portugal, Third from an to X.X% to it the Doron prior quarter versus our of $X.X the at in compared Storage revenues started announced ERCOT recently the was weaker complex, stands second was as unplanned things, were partially driven following offset Electricity revenues this which current growth Enel plant, the other contribution the revenue quarter XXXX, market. $XXX revenues successful among lower drilling Energy facility. prices The Valley contract performance in X,

ERCOT spike in events. positively was impacted the weather to XXXX due quarter Third by market in prices

X. slides The during was XX.X% total and XX.X% was segment generated at Electricity X% in the accounted in contributed Electricity are Dixie our from Energy Slide the The of third comparison Ormat's year. facility segment of shutdown, lower adjusted the EBITDA Reconciliation quarter margin our Breaking the in appendix down provided of adjusted the Valley EBITDA X. XX% Product of quarter, segment EBITDA margin from Slide quarter. presentation. the EBITDA earnings the on to for EBITDA. Storage previous segment previously The due adjusted to the third Moving noted partial for at XX% generation we in consolidated and the adjusted driven call. Gross down primarily level back total by which segment second the

to the value an quarter, XXXX which tax attributable in second the mainly power benefits in a X. million PTC compared commenced income Moving related related in operation $XX.X to million Slide increase of to we is the In year. to of Beowawe recorded to increase last This quarter and $XX.X third the transferable plant, PTC.

will benefits proceeds to cash up to in to ITC receive continue we PTC XXXX. $XXX anticipate in and We that related million

complete we Heber PTC third of monetization the Complex. $XX sold And the equity ITC million complete the quarter, to of we expect the and During from and the Heber quarter in of collected transactions we tax fourth generated Bottleneck Complex.

early we base Heber our pushed to transaction note that that XXXX. may is possible is expectation, be this the case While it

lower As strategy. we effectively of the our previously, proceeds intensity growth have will capital these noted multiyear

Looking at Slide XX.

debt cash months, Ormat's our debt $XXX.X end Cash equivalents cash to $XXX.X reinvest September and equivalent was X consistently debt in servicing net XXXX, cash was to XX the grow obligations of capital approximately XXXX, million XX, generate use while September to shareholders. flows business for Our at cash of breaks XXXX. compared restricted as of equivalents to the and billion, returning and and net EBITDA. ability of the million as also to our to Slide cash $X.X XX, and X.Xx our down illustrating

majority schedule. and debt the XXXX, our company our Slide total $X.X as that September debt of presented the of for of X.XX% debt on approximately cost XX are the payment Our rates. deferred reiterate the was billion, and liabilities average fixed at The XX, at costs is net which we stands appendix, interest financing outlines in of

XX. Slide to Moving

We $XXX available total have million liquidity. approximately of

the for expected in $XXX approximately Electricity XXXX in segment is construction, drilling million to Slide XX detailed the for million invest exploration, the Our as of capital in expenditure appendix. $XX We plan remaining and maintenance. approximately

to assets for remainder XXXX. of of plan $XX construction also the the We our during storage million invest

will benefits As on the cash tax combined expected are consistently increasing fund we we from CapEx. our continue growth our plans, to executing which progress with utilizing cash our with generation, the

to maintain to quarterly excellent $X.XX access December overview. I X, per shareholders discuss have continue We to payment on of payable share call That as on of our record some additional over XXXX, would ample turn declared, our developments. November as financial needed. approved Doron On X, to November and Directors like capital now of XXXX, my to of recent XX, liquidity of to and the concludes Board authorized dividends XXXX.

Doron Blachar

Thank you, Assi.

segment at a Electricity to Puna our and growth XX, portfolio. our Enel million performance positively Electricity strategically acquired was Turning our increase segment. hour, by X.X ended continued our impacted X.X% Slide the megawatt improvement from September months the we leading complex. in look In XXXX, assets X XX The for generated a generation in operating

an update XX to capacity reservoir Puna have operating improvement we increased At growth. complex, in Turning the and which for continuous our turn, generation has driven performance, our on observed footprint. Slide in

third successfully capacity this experience of Olkaria we our offtaker, XXX from also was At prices drilling our We Kenya, while quarter. following megawatts power this reached throughout campaign. continue reduced the to plant And from trend higher our benefited we successful curtailment in quarter.

revenues result, by X.X% the Olkaria prior quarter year. third from during versus As increased our a approximately

electricity of during As Assi quarter this an occurred experienced facility this the our outage generation Valley year. Dixie noted quarter also unplanned that earlier, second to lower due

quarter, $X.X million a by our result, and the negatively third $X.X EBITDA respectively. and during revenue roughly impacted were As million

have shutdown EBITDA and million, facility respectively. generation assets the result. results a generating We revenue of strengthen On assets $X.X third are increase to continued with final earnings currently as completing the Enel of our $X.X million and the to positive in a of the and stages note, moving quarter expect forward our

translate We into in enhancing geothermal which through progress improved X will once acquired the continue great returns to complete, make assets, expanded performance.

previously of facility Fort expected earlier that compared in Finally, XXXX, our completed released to Cove Utah power and than larger for We the acquisition plant was end initial the model. partially X by anticipate will to XX be XX-megawatt construction. our

Turning to Slide XX.

the as stands backlog segment we quarter Product during $XX is the new can slide, Our million which contracts of to XXXX. total added on approximately to backlog of the million, you the see at of And second similar $XXX quarter.

reached XX. Moving underlying to the our experienced Riverside Texas continue Rio highlighted Storage megawatt hour. our by make to City agreements profitability. we facility and revenue facilities, lower, XX storage of each performance XX as Despite ERCOT progress Lower normalized agreement to in more first into our with year-over-year we great This our predictable for megawatt/XXX the business segment Dog with Slide well Bird stronger tolling our megawatts, as RA a we more the at shared X megawatt transitioning consistently in lower prices, XXX is for in portfolio due hour

Flemington past our such Bottleneck East ago, that that our is expect commercial an also that key a largest became will XX-year XX forward. the excited year. a that from tolling few Energy storage facility the highlight of a megawatts/XXX to agreement development some for & from operational came benefits improving Bottleneck for we revenue over earlier Consistent the our with going contracted This will generate facility, capture to I'm announced and Diego continue in theme, megawatt EBITDA stable week Storage online facility San exciting is and we Gas operation our Ormat revenues facilities Electric. quarters, results hour play energy role which with as that the recently which facility as we this just Additionally, our

XX. Moving to Slide

X.X to We on have reach track by gigawatt remain XXXX. our capacity to target between portfolio to gigawatts X.X year-end continue

which of on remain to the growth XX% reminder, support Storage The segments. are are focus and to growth positioned As see we growth U.S. majority well seeing expect efforts that we capture U.S. and rate our increasing to the capacity demand the strong currently we for electricity, through to both regulatory to a annual an continues with focused our main market. due the between for XX%, the Electricity

hybrid Turning which we and solar PV Slides XX, and now XX to geothermal our projects have underway. display currently

to in remain project of complete to track Indonesia the continue We end Ijen XXXX. on by the

add or XXX Slides XXX In to which different Storage of total, total under of discuss X our growth. we believe to currently XX to and we COD storage Energy projects segment we development XX to portfolio. storage achieve XXXX, by expect Moving our that end have hour will a the megawatts megawatt

close revenues Slide are our continuing to As first focused the narrowing are EBITDA. growth meaningful turn balanced remain XXXX merchant we our guidance. into we our for the across the of In market of achieving and storage have to a previously has year-over-year in Ormat adjusted on noted, a split revenue and portfolio delivered XX discussion of prices. Please XXXX, X of we our Heading revenues guidance. year, months contracted

revenues million. and Storage Electricity be and year $XX $XXX revenues between $XXX revenues full revenues Product $XXX million $XX million million. between $XXX expect $XXX segment and segment and and $XXX between expected We million to expected million are million. million are to be between to range

improved successfully will and strategic to increasing evidenced to execute new as agreements. through ability PPA of over that our continued have are past performance the product objectives adjusted $XX returns X EBITDA and drive results our adjusted third strong size And to portfolio we to approximately $XXX to million our remarks the quarters we million. I up, wrap and higher minority be secure annual increasing end long-term between full To operating and the XX. quarter our EBITDA prepared $XXX now Slide tolling reflect to on against We year agreements million. range will expect finally, EBITDA our pricing expect our adjusted interest attributable guidance by

ITC PTC our target the financial across monetization meaningful and This positioning growth to well of performance well improved profitability we both flow the and cash that future our through from deliver our benefits XXXX support operations beyond. in Additionally, and are for long-term growth and strong the our and us us positioned confidence gives value to enterprise. are achieve stakeholders improved drive

the Now, call Operator, I to would like open please. questions. for

Operator

you. Thank

line Instructions] Your from Noah We comes will Kaye begin the [Operator question first Oppenheimer. with session. question-and-answer the now of

Noah Kaye

with I the on a looks a was there. also to permitting. auction. can proposed that development. It at won you land benefit. by the something you'd highlighted categorical And exclusion fair amount to like Day start BLM hoping Maybe a start geothermal of looks like commenting potential results it there's NEPA geothermal for you That's as Investor

And capitalize projects start geothermal the for zero emissions baseload the us think strong the you up speed help about for power. to talk to some just development. heart So, really this bit of on implications demand new can of a is little whether to really at this you

Doron Blachar

Thanks, Noah.

Regarding auction, companies nominated we acquired open BLM we ask Basically, for the works the to nominate the way then the actually all lands are the it auction. that and is auction. BLM that the lands they for

secure able were additional few well as sites. that to as we we the So, nominated all lands

So, after sites we secure have exploration, additional resource to full had to come some this by to initial definitely additional land us a permitting big allow able and will we to acquired that us portfolio. The a the on position and but site development our growth faster. review be shorten core it exploration while. to the phase we've expedite our the develop that do project been into exploration and a the you It program for also step. sites, some our land will mentioned working quite We've it for category get hole is will phase and enable team,

last We in U.S. X hole have over the core campaigns about the done year,

sites. process shortened, that, next year. we the for -- drilling hole be fact year to All next targets that the improved hopefully do to the and another process core able an the And entire some has them exploration we'll our moving actually in for successful going to X well were of X part them. additional campaign are definitely to we believe the parallel And to between we're -- of exceed full-size and and meet the

Noah Kaye

for Very it's does setting be you'd CapEx year? budgets comment enhancements helpful. in think made in some probably to I on lapping -- spend be the development of Maybe for how year, of might think know this electricity CapEx you you what that year. of progress for but you early I the process mean terms all you that on what next can would the much able this -- next

to bit kind a go growth. dry of presumably So, more core after powder

Doron Blachar

expect year higher difference over are think to full-size next drilling. I because exploration I will CapEx. earlier, definitely. said be Yes, on hole 'XX the program to a CapEx core from moving as biggest the than be And part there a I we

a So, core 'XX the deep if maybe of full-size core we to will million, And hole you do hole and $XXX,XXX, full-size $X a range between is to how wells plan well million, XXXX. done cost, a year the on million. that $X few go we've in $X.X next depends to $X million in

Operator

of next with Your Capital. ROTH Justin the from question Clare line comes

Justin Clare

wanted to I start off So, here.

U.S., in could change we administration that IRA the get With a in new it the possible does look the legislation.

and So, of at just or Safe Have wondering storage to you for about geothermal PTC how change? qualify policy risk looked can you're any projects ensure you potential mitigating the thinking ITC. Harboring a

positioned So, there. how just wondering you're

Doron Blachar

Thanks, Justin.

extend and than would on a part, question extend has end it then say a low it. they So, The on something will or the been the not then for there's they more this and going whether is geothermal, I PTCs decade. that

And the develop is so PTC say we I anything would if previous that change all geothermal projects along. Harbor PTCs have we've in the concept the for been are operating administration, all will for And for for that getting Safe that geothermal. we extended part afterwards. the will that Safe Harbor on the of prepared they Trump will the geothermal, we something

category So the other. are that the project geothermal, same Safe we to I construction Storage, still, think, definitely is we apply Energy going at not as same, looking we the But already. in the are in the to are Harbor. And

there change need batteries. We change takes will them to how a secured U.S. anybody see have anything. the few bring But place. months are the If still until into we We

as Safe the we've we the last So, the been decade. hope than this on we Harbor think, PTCs are that Storage. on more also continue. But on a I for last, looking is his And how he's done the geothermal geothermal, working Energy administration, in they for do will

Justin Clare

it. Got

And we maybe Okay. on you was terms wondering then to comment trend continuing provide under? when where how compare what PPAs that then some XXXX, you're update seeing an sense I you're extend Any are what in upward? new contracts trend if of in in might those you and -- expiring might Are pricing geothermal seeing for currently XXXX. also have could you on the And do the for just capacity PPAs projects. operating PPAs to

Doron Blachar

Yes.

see today we pricing of and continues trend the north $XXX. So,

Heber negotiating We future multiple on in 'XX, re-contracting have said. plants new similar prices The that a -- contracting what it we well expired signed at as power ones. are as the that for re-contracting with have players PPA PPA we I've

mentioned expect similar We beginning be waiting And expect and I process, of we to in that next GX in end negotiations I final this as are year. extension 'XX of before. pricing, his that offtaker maybe approval year, the also Mammoth re-contracting on to the will for the of for finish the happen we are

offtakers would demand. would we And to like project we I that contract we have this a So, have, increase say few in almost it. see for every that

Operator

the [Operator comes Instructions] Mark of with question Strouse line Your next from JPMorgan.

Mark W. Strouse

new agreements in can Just Is on the there the color give kind relative color comes XXXX the about as tolling that online? any accretion levels any you margin of of pricing to Texas? that

Assaf Ginzburg

that we per I $XX,XXX ] hour So, basically to hours numbers, And numbers California. of Texas market California for batteries environment the for say for give specific around get is today's in hours the but that month. will are we X in batteries X half $XX,XXX value the won't [

next our already It's a do in versus a Texas year. gross numbers shorter. XXXX go last few years the few XX% the half. margin came around We think days slightly in from few over should expansion, in So X-year when transaction. It's in full that a we just the towards expect believe will to are margin a we Bottleneck the margin months. recovery online operate we to XX% expect that when around flat And ago

And then we first have be And second the will Texas Texas XXXX, projects. the that the the in we So then have of one step. half next XXXX, project. in of

eventually, So XX%. to closer way, we get will to the going anywhere visit XX% probably XX%. we're But from to on

Mark W. Strouse

kind then there? be a are of can And your Okay. more relatedly, optimistic contracts What was about there Where operating? of latest merchant merchant to kind pricing? talk kind on to you pricing the what you're seeing year? trends Is of with earlier compared reason this it

Assaf Ginzburg

any will events did million year, have in Texas. general, did we as -- some, was today we revenue. U.S. And additional would the $X this enough in we year, With weather you last that say, Texas, assets I had not less good impact our it saw not profitability. much QX in versus I say that in that weather in

time will I we from happen to can dollars million and our those time to a do line. So, top few say add to expect that they

say, then are. we the quite PJM, good I where is this will So, we year, margins. general, throughout on experienced And in

are all first quarter that you that events. But largest not project them the now, So, right is already margin I gross Montague, the weather put positive asked which under everything have PPAs. even key, the in of in to there was Storage, that besides and have, though construction the Louisa we we able this no question, and did think

megawatt it's those for Dog, quite trajectory the somewhere next XXX East Coast Coast and few the and hour about Montague $XX have to throughout in think fully Rio Bottleneck is the XXX $XX Bird you contracted. when trending Lower the fully hours megawatt in East around is been So, prices favorable, each one megawatts, per years, year. is contracted.

We have with coming XXXX full PPA. in of a Arrowleaf the also end

time exposures. to good we're volatility will the weather a because model, time environment to us. from we earlier, is I as like do secure said, still that in in and model much the to said a less We some say But there And model. contracts volatility. geothermal be I expect, have some balance impactful be to between for there merchant more events. some Texas. the reduce shift is will the we reason to business people That's volatility The So, but part the I as a in why in as some to decided to that of Texas. believe able there exposure of of like the volatility, as will I keep company, result,

Operator

We have back for queue I in this the turn no management questions time. at our closing to further will remarks. over call now

Doron Blachar

you, continues Ormat's Ormat develop that profitable one [ thank has in actions. you've seen, I ] the did is that close investigation about decided to say told its and as I'd act in everyone. like its that and that to talk it So U.S. that item that script no would grow highlight with operations And globally. we you on the the and other if fact remember the has SEC formally to the company

] issues. investigated decided independent Directors letter a that to Board special the has that from Following we SEC, committee to of disseminate this the received these special [ committee,

act, positive operating. demonstrates it commitment are we a company's and comply So, with all to very this wherever laws very, the is

So thank you in you, see the everyone, you. looking to future. support for and your Thank

Operator

conference That call. Thank and concludes today's for disconnect. now you your you participation may

Ormat (ORA) 7 Nov 242024 Q3 Earnings call transcript