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Ormat Technologies Reports Fourth Quarter and Year-End 2023 Financial Results
Press Releases

Ormat Technologies Reports Fourth Quarter and Year-End 2023 Financial Results

DELIVERED A 77.8% INCREASE IN ANNUAL DILUTED EPS AND A 25.0% INCREASE IN ANNUAL ADJUSTED DILUTED EPS COMPARED TO PRIOR YEAR

COMPANY ON TRACK TO MEET 2026 GENERATING CAPACITY GOALS OF 2.1 TO 2.3 GW

HIGHLIGHTS

  • TOTAL REVENUES FOR THE FOURTH QUARTER INCREASED BY 17.4% YEAROVERYEAR DRIVEN BY GROWTH IN BOTH THE ELECTRICITY AND PRODUCT SEGMENTS
  • OPERATING INCOME INCREASED BY 70.8% FOR THE FOURTH QUARTER AND 9.0% FOR THE FULL YEAR COMPARED TO 2022
  • ORMAT ANNOUNCES FULL YEAR 2024 ADJUSTED EBITDA OUTLOOK OF $515 TO $545 MILLION, WITH ADDITIONAL $40 MILLION EXPECTED THROUGH REDUCED TAX EXPENSE AS A RESULT OF ITC BENEFITS

RENO, Nev., Feb. 21, 2024 (GLOBE NEWSWIRE) — Ormat Technologies, Inc. (NYSE: ORA) (the “Company,” “Ormat,” “we” or “us”),  a leading renewable energy company, today announced financial results for the fourth quarter and full year ended December 31, 2023.

KEY FINANCIAL RESULTS

(Dollars in millions, except per share) Q4 2023 Q4 2022 Change (%) FY 2023 FY 2022   Change (%)    
GAAP Measures                
Revenues                
Electricity 183.9   165.2   11.3 % 666.8   631.7   5.5 %
Product 50.4   32.2   56.7 % 133.8   71.4   87.3 %
Energy Storage & Management Services 7.0   8.1   (14.0 )% 28.9   31.0   (6.8 )%
Total Revenues 241.3   205.5   17.4 % 829.4   734.1   13.0 %
                 
Gross margin (%)                
Electricity 39.5 % 43.5 %   36.6 % 39.8 %  
Product 12.6 % 22.8 %   13.4 % 15.3 %  
Energy Storage & Management Services (8.9 )% 11.7 %   6.4 % 21.0 %  
Gross margin (%) 32.5 % 39.0 %   31.8 % 36.6 %  
                 
Operating income 51.6   30.2   70.8 % 166.6   152.8   9.0 %
Net income attributable to the Company’s stockholders 35.7   18.0   98.0 % 124.4   65.8   88.9 %
Diluted EPS ($) 0.59   0.32   84.4 % 2.08   1.17   77.8 %
                     
Non-GAAP Measures 1                    
Adjusted Net income attributable to the Company’s stockholders 40.5   41.2   (1.7 )% 121.9   92.2   32.2 %
Adjusted Diluted EPS ($) 0.67   0.73

 

  (8.2 )% 2.05   1.63   25.0 %
Adjusted EBITDA1 139.0   124.7      11.5 % 481.7   435.5        10.6 %

Reconciliation is set forth below in this release

“I am pleased to report that Ormat delivered another quarter of solid results, marking a strong conclusion to a successful year in 2023,” said Doron Blachar, Chief Executive Officer of Ormat. “Our core Electricity segment achieved record quarterly revenues of $183.9 million, while robust growth of 56.7% in our Product segment boosted Adjusted EBITDA, driving growth of 11.5% compared to the same period last year, establishing positive momentum as we enter 2024.”

“Our annual net income attributable to the Company’s stockholders increased by 88.9% and our annual Adjusted EBITDA results increased by 10.6%. These strong results were the result of our successful operation of new projects launched in 2022, which contributed to 2023 results, and the commercial operation of our geothermal, solar PV and energy storage portfolio throughout the year, supplemented by the successful recovery of operations at our Heber 1 geothermal power plant that went online in May 2023.”

“The escalating demand for sustainable electricity continues to support Ormat’s multi-year growth trajectory. From the beginning of 2023 and to this point in 2024 we have added 239MW of new capacity through development and acquisition, of which 157MW was added to the Electricity segment, including 100MW of geothermal and solar PV assets acquired in January 2024, and 82MW from five new storage facilities in our Storage segment.  This growth helps further advance our efforts towards meeting our 2026 capacity expansion targets, which we believe should help to increase our EBITDA and earnings generation in 2024 and beyond.”

Doron Blachar, continued, “Looking forward, we are on track with our capacity expansions in both the Electricity and the Storage segments, with the potential to reach capacity of between 2.1 GW to 2.3 GW by the end of 2026. We anticipate an increase of 7% and 10% in total revenues and Adjusted EBITDA, respectively, for 2024. Our commitment to strategic execution combined with our investment in high-quality geothermal and energy storage assets positions Ormat for continued growth, while also contributing to the global push to reduce greenhouse gas emissions. We remain firm in our dedication to delivering value to our shareholders and advancing sustainable communities and economies in the regions in which we operate.”

FINANCIAL AND RECENT BUSINESS HIGHLIGHTS

  • Net income attributable to the Company’s stockholders for the fourth quarter and for the year 2023 was $35.7 million and $124.4 million, respectively, an increase of 98.0% and 88.9%, respectively, compared to last year. Diluted EPS for the fourth quarter and for the year 2023 were $0.59 and $2.08 per share, respectively, an increase of 84.4% and 77.8%, respectively, compared to last year.
  • Adjusted net income attributable to the Company’s stockholders and diluted adjusted EPS for the fourth quarter decreased 1.7% and 8.2% compared to last year due to higher tax rates during Q4 2023 compared to income tax benefits for the same period last year, in addition to the fact that Electricity Segment gross margin and adjusted EBITDA in the fourth quarter of 2022 included $6.4 million of business interruption income related to Heber 1.
  • Adjusted net income attributable to the Company’s stockholders and diluted adjusted EPS for the full year 2023 increased 32.2% and 25.0% compared to the previous year.
  • Adjusted EBITDA for the fourth quarter and for the year 2023 were $139.0 million, and $481.7 million, respectively, an increase of 11.5% and 10.6%, respectively, compared to 2022. Adjusted EBITDA in the quarter increased mainly due to the recovery of the Heber complex and Puna power plant, the contribution from the new North Valley power plant and the new PTCs associated with our new geothermal assets.
  • Electricity segment revenues increased 11.3% for the fourth quarter and 5.5% for the year compared to 2022, supported in the quarter by contributions from new projects added early in 2023, as well as improved generation at the Heber and Puna power plants.
  • Product segment revenues increased 56.7% for the fourth quarter and 87.3% for the year compared to 2022, supported by higher backlog and the timing of revenue recognition.
  • Product segment backlog stands at $152.0 million as of February 21, 2024.
  • Energy Storage segment revenues decreased 14.0% for the fourth quarter and 6.8% for the year compared to 2022, driven mainly by lower merchant rates at PJM and CAISO.

IN ADDITION:

  • Received Hawai‘i Public Utilities Commission’s approval of the Power Purchase Agreement (PPA) between Puna Geothermal Venture (PGV) and Hawaiian Electric. The approval follows PGV’s completion and submission of its final environmental impact statement for operations in Puna, Hawai’i.
  • Completed the acquisition of contracted operating geothermal and solar assets from Enel Green Power North America, helping advance Ormat’s Electricity segment growth plans and further strengthening the Company’s presence in the U.S. renewable energy sector.
  • Signed a 25-year power purchase agreement with Dominica Electricity Services Ltd. (DOMLEC) for the development of a 10MW binary geothermal power plant in the Caribbean country of Dominica.
  • Secured a 15-year Energy Storage service agreement with San Diego Community Power (SDCP) for the 20MW/40MWh Pomona 2 Energy Storage System (BESS) located in Los Angeles County, California.

2024 GUIDANCE

  • Total revenues of between $860 million and $910 million.
  • Electricity segment revenues between $710 million and $730 million.
  • Product segment revenues of between $115 million and $135 million.
  • Energy Storage revenues of between $35 million and $45 million.
  • Adjusted EBITDA to be between $515 million and $545 million.
    • Adjusted EBITDA attributable to minority interest of approximately $18 million.

The Company provides a reconciliation of Adjusted EBITDA, a non-GAAP financial measure for the quarter and year ended December 31, 2023. However, the Company does not provide guidance on net income and is unable to provide a reconciliation for its Adjusted EBITDA guidance range to net income without unreasonable efforts due to high variability and complexity with respect to estimating certain forward-looking amounts. These include impairments and disposition and acquisition of business interests, income tax expense, and other non-cash expenses and adjusting items that are excluded from the calculation of Adjusted EBITDA.

DIVIDEND

On February 21, 2024, the Company’s Board of Directors declared, approved, and authorized payment of a quarterly dividend of $0.12 per share pursuant to the Company’s dividend policy. The dividend will be paid on March 20, 2024, to stockholders of record as of the close of business on March 6, 2024. In addition, the Company expects to pay a quarterly dividend of $0.12 per share in each of the next three quarters.

CONFERENCE CALL DETAILS

Ormat will host a conference call to discuss its financial results and other matters discussed in this press release on Thursday, February 22, 2024, at 10:00 a.m. ET.

Participants within the United States and Canada, please dial 1-888-770-2286, approximately 15 minutes prior to the scheduled start of the call. If you are calling outside of the United States and Canada, please dial +1-646-960-0440. Access code for the call is 9122486. Please request the “Ormat Technologies, Inc. call” when prompted by the conference call operator. The conference call will also be accompanied by a webcast live on the Investor Relations section of the Company’s website.

A replay will be available one hour after the end of the conference call. To access the replay within the United States and Canada, please dial 1-800-770-2030. From outside of the United States and Canada, please dial +1-647-362-9199. Please use the replay access code 9122486. The webcast will also be archived on the Investor Relations section of the Company’s website.

ABOUT ORMAT TECHNOLOGIES

With over five decades of experience, Ormat Technologies, Inc. is a leading geothermal company and the only vertically integrated company engaged in geothermal and recovered energy generation (“REG”), with robust plans to accelerate long-term growth in the energy storage market and to establish a leading position in the U.S. energy storage market. The Company owns, operates, designs, manufactures and sells geothermal and REG power plants primarily based on the Ormat Energy Converter – a power generation unit that converts low-, medium- and high-temperature heat into electricity. The Company has engineered, manufactured and constructed power plants, which it currently owns or has installed for utilities and developers worldwide, totaling approximately 3,200 MW of gross capacity. Ormat leveraged its core capabilities in the geothermal and REG industries and its global presence to expand the Company’s activity into energy storage services, solar Photovoltaic (PV) and energy storage plus Solar PV. Ormat’s current total generating portfolio is 1,385 MW with a 1,215 MW geothermal and solar generation portfolio that is spread globally in the U.S., Kenya, Guatemala, Indonesia, Honduras, and Guadeloupe, and a 170 MW energy storage portfolio that is located in the U.S.

ORMAT’S SAFE HARBOR STATEMENT

Information provided in this press release may contain statements relating to current expectations, estimates, forecasts and projections about future events that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that we expect or anticipate will or may occur in the future, including such matters as our projections of annual revenues, expenses and debt service coverage with respect to our debt securities, future capital expenditures, business strategy, competitive strengths, goals, development or operation of generation assets, market and industry developments and the growth of our business and operations, are forward-looking statements. When used in this press release, the words “may”, “will”, “could”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “projects”, “potential”, or “contemplate” or the negative of these terms or other comparable terminology are intended to identify forward-looking statements, although not all forward-looking statements contain such words or expressions. These forward-looking statements generally relate to Ormat’s plans, objectives and expectations for future operations and are based upon its management’s current estimates and projections of future results or trends. Although we believe that our plans and objectives reflected in or suggested by these forward-looking statements are reasonable, we may not achieve these plans or objectives.  Actual future results may differ materially from those projected as a result of certain risks and uncertainties and other risks described under "Risk Factors" as described in Ormat’s annual report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 24, 2023, and in Ormat’s subsequent quarterly reports on Form 10-Q that are filed from time to time with the SEC.

These forward-looking statements are made only as of the date hereof, and, except as legally required, we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES
Condensed Consolidated Statement of Operations
For the Three-and Twelve-Month periods Ended December 31, 2023, and 2022

  Three Months Ended
December 31,
Twelve Months Ended
December 31
  2023   2022   2023   2022  
  (Dollars in thousands, except per share data)
Revenues:        
Electricity 183,921   165,187   666,767   631,727  
Product 50,432   32,177   133,763   71,414  
Energy storage 6,987   8,122   28,894   31,018  
Total revenues 241,340   205,486   829,424   734,159  
Cost of revenues:        
Electricity 111,201   93,270   422,549   380,361  
Product 44,073   24,835   115,802   60,479  
Energy storage 7,610   7,171   27,055   24,495  
Total cost of revenues 162,884   125,276   565,406   465,335  
Gross profit 78,456   80,210   264,018   268,824  
Operating expenses:        
Research and development expenses 2,452   1,388   7,215   5,078  
Selling and marketing expenses 4,307   3,783   18,306   16,193  
General and administrative expenses 18,654   14,119   68,179   61,274  
Impairment charge   30,695     32,648  
Write-off of unsuccessful exploration activities 1,415     3,733   828  
Operating income 51,628   30,224   166,585   152,803  
Other income (expense):        
Interest income 2,363   1,237   11,983   3,417  
Interest expense, net (25,803 ) (23,841 ) (98,881 ) (87,743 )
Derivatives and foreign currency transaction gains (losses) 712   (2,013 ) (3,278 ) (6,044 )
Income attributable to sale of tax benefits 18,676   7,540   61,157   33,885  
Other non-operating income (expense), net 1,272   (197 ) 1,519   (709 )
Income from operations before income tax and equity in earnings (losses) of investees 48,848   12,950   139,085   95,609  
Income tax (provision) benefit (8,188 ) 8,778   (5,983 ) (14,742 )
Equity in earnings (losses) of investees, net (1,827 ) (1,498 ) 35   (3,072 )
Net income 38,833   20,230   133,137   77,795  
Net income attributable to noncontrolling interest (3,107 ) (2,190 ) (8,738 ) (11,954 )
Net income attributable to the Company’s stockholders 35,726   18,040   124,399   65,841  
Earnings per share attributable to the Company’s stockholders:        
Basic: 0.59   0.32   2.09   1.17  
Diluted: 0.59   0.32   2.08   1.17  
Weighted average number of shares used in computation of earnings per share attributable to the Company’s stockholders:        
Basic 60,367   56,077   59,424   56,063  
Diluted 60,505   56,501   59,762   56,503  

ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES
Condensed Consolidated Balance Sheet
For the Periods Ended December 31, 2023, and 2022

  December
31, 2023
  December
31, 2022
ASSETS
Current assets:      
Cash and cash equivalents 195,808     95,872
Marketable securities at fair value    
Restricted cash and cash equivalents 91,962     130,804
Receivables:      
Trade 208,704     128,818
Other 44,530     32,415
Inventories 45,037     22,832
Costs and estimated earnings in excess of billings on uncompleted contracts 18,367     16,405
Prepaid expenses and other 41,595     29,571
Total current assets 646,003     456,717
Investment in unconsolidated companies 125,439     115,693
Deposits and other 44,631     39,762
Deferred income taxes 152,570     161,365
Property, plant and equipment, net 2,998,949     2,493,457
Construction-in-process 814,967     893,198
Operating leases right of use 24,057     23,411
Finance leases right of use 3,510     3,806
Intangible assets, net 307,609     333,845
Goodwill 90,544     90,325
Total assets 5,208,279     4,611,579
       
LIABILITIES AND EQUITY
Current liabilities:      
Accounts payable and accrued expenses 214,518     149,423
Short term revolving credit lines with banks (full recourse) 20,000    
Commercial paper 99,971    
Billings in excess of costs and estimated earnings on uncompleted contracts 18,669     8,785
Current portion of long-term debt:      
Limited and non-recourse (primarily related to VIEs): 57,207     64,044
Full recourse 116,864     101,460
Financing Liability 5,141     16,270
Operating lease liabilities 3,329     2,347
Finance lease liabilities 1,313     1,581
Total current liabilities 537,012     343,910
Long-term debt, net of current portion:      
Limited and non-recourse: 447,389     521,885
Full recourse: 698,187     676,512
Convertible senior notes 423,104     420,805
Financing liability 220,619     225,759
Operating lease liabilities 19,790     19,788
Finance lease liabilities 2,238     2,262
Liability associated with sale of tax benefits 184,612     166,259
Deferred income taxes 66,748     83,465
Liability for unrecognized tax benefits 8,673     6,559
Liabilities for severance pay 11,844     12,833
Asset retirement obligation 114,370     97,660
Other long-term liabilities 22,107     3,317
Total liabilities 2,756,693     2,581,014
       
Commitments and contingencies      
Redeemable noncontrolling interest 10,599     9,590
       
Equity:      
The Company’s stockholders’ equity:      
Common stock 60     56
Additional paid-in capital 1,614,769     1,259,072
Treasury stock, at cost (17,964 )   -17,964
Retained earnings 719,894     623,907
Accumulated other comprehensive income (loss) (1,332 )   2,500
Total stockholders’ equity attributable to Company’s stockholders 2,315,427     1,867,571
Noncontrolling interest 125,560     153,404
Total equity 2,440,987     2,020,975
Total liabilities, redeemable noncontrolling interest and equity 5,208,279     4,611,579

ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES
Reconciliation of EBITDA and Adjusted EBITDA
For the three and twelve month period ended December 31, 2023 and 2022

We calculate EBITDA as net income before interest, taxes, depreciation, amortization and accretion. We calculate Adjusted EBITDA as net income before interest, taxes, depreciation, amortization and accretion, adjusted for (i) mark-to-market gains or losses from accounting for derivatives; (ii) stock-based compensation; (iii) merger and acquisition transaction costs; (iv) gain or loss from extinguishment of liabilities; (v) cost related to a settlement agreement; (vi) non-cash impairment charges; (vii) write-off of unsuccessful exploration activities; and (viii) other unusual or non-recurring items. We adjust for these factors as they may be non-cash, unusual in nature and/or are not factors used by management for evaluating operating performance. We believe that presentation of these measures will enhance an investor’s ability to evaluate our financial and operating performance. EBITDA and Adjusted EBITDA are not measurements of financial performance or liquidity under accounting principles generally accepted in the United States, or U.S. GAAP, and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net earnings as indicators of our operating performance or any other measures of performance derived in accordance with U.S. GAAP. Our Board of Directors and senior management use EBITDA and Adjusted EBITDA to evaluate our financial performance. However, other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do.

Starting in the fourth quarter of 2022, we include accretion expenses related to asset retirement obligation in the adjustments to net income when calculating EBITDA and adjusted EBITDA. The presentation of EBITDA and adjusted EBITDA includes accretion expenses for the three and twelve months ended December 31, 2023; however, the prior year has not been recast to include accretion expenses as the amounts were immaterial. 

The following table reconciles net income to EBITDA and Adjusted EBITDA for the three- and twelve-month period ended December 31, 2023 and 2022:

  Three Months Ended
December 31,
  Year ended
December 31,
  2023     2022     2023     2022  
  (Dollars in thousands)   (Dollars in thousands)
Net income   38,833     20,230     133,137     77,795  
Adjusted for:              
Interest expense, net (including amortization of deferred financing costs)   23,440     22,604     86,898     84,326  
Income tax provision (benefit)  8,188     (8,778 )   5,983     14,742  
Adjustment to investment in an unconsolidated company: our proportionate share in interest expense, tax and depreciation and amortization in Sarulla   5,243     3,758     16,069     13,199  
Depreciation and amortization 59,331     55,637     221,415     198,603  
EBITDA   135,035     93,451     463,502     388,665  
Mark-to-market on derivative instruments (2,490 )   (1,064 )   (2,206 )   1,613  
Stock-based compensation 4,243     3,017     15,478     11,646  
Make-whole premium related to long-term debt prepayment             1,102  
Reversal of a contingent liability related to a business combination transaction     (1,829 )       (1,829 )
Impairment of long-lived assets     30,693         32,648  
Reversal of a contingent liability related to a business combination transaction             115  
Merger and acquisition transaction costs 816     427     1,234     675  
Write-off of unsuccessful exploration activities 1,415         3,733     828  
Adjusted EBITDA 139,019     124,695     481,741     435,463  

ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES
Reconciliation of Adjusted Net Income attributable to the Company’s stockholders and Adjusted EPS
For the Three and twelve-month periods ended December 31, 2023, and 2022

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 reconcile Net income attributable to the Company’s stockholders and Adjusted EPS for the three and twelve-month periods ended December 31, 2023 and 2022.

  Three Months Ended December 31,   Year Ended December 31,
  2023   2022     2023     2022  
               
GAAP Net income attributable to the Company’s stockholders 35.7   18.0     124.4     65.8  
Impact of changes in the Finance Law in Kenya 2.0       (7.4 )    
Impairment of long-lived assets   24.3         25.8  
Tax asset write-off in Sarulla, our unconsolidated company 1.0       1.0      
Write-off of unsuccessful exploration activities 1.1       2.9     0.7  
M&A costs 0.6   0.3     1.0     0.5  
Reversal of earn-out   (1.4 )       (1.4 )
Make-whole premium related to repayment of long-term debt           0.8  
Adjusted Net income attributable to the Company’s stockholders 40.5   41.2     121.9     92.2  
GAAP diluted EPS 0.59   0.32     2.08     1.17  
Impact of changes in the Finance Law in Kenya 0.03       (0.12 )    
Impairment of long-lived assets   0.43         0.46  
Tax asset write-off in Sarulla, our unconsolidated company 0.02       0.02      
Write-off of unsuccessful exploration activities 0.02       0.05     0.01  
M&A costs 0.01   0.01     0.02     0.01  
Reversal of earn-out   (0.03 )       (0.03 )
Make-whole premium related to repayment of long-term debt           0.01  
Diluted Adjusted EPS ($) 0.67   0.73     2.05     1.63  

Ormat Technologies Contact:
Smadar Lavi
VP Head of IR and ESG Planning & Reporting
775-356-9029 (ext. 65726)
slavi@ormat.com
  Investor Relations Agency Contact:
Joseph Caminiti or Josh Carroll
Alpha IR Group
312-445-2870
ORA@alpha-ir.com

 

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