Ormat Technologies, Inc.1 (NYSE: ORA) today (8/7) announced financial results for the second quarter ended June 30, 2019.
"Ormat delivered in the second quarter a 5.6% growth in electricity segment revenue and a 5.7% increase in generation without any contribution from our Puna power plant in Hawaii that is temporarily shut down following the Kilauea volcano eruption last year," commented Isaac Angel, Chief Executive Officer. "We continue to make good progress in our efforts to resume operations at Puna. We expect that our plant refurbishment activities will be completed on schedule by the end of 2019 and expect that the plant will resume operations as soon as the local permitting and transmission network upgrades being undertaken by our local utility partner are completed by early 2020. Excluding Puna, which contributed gross profit of $1.8 million in the second quarter, our electricity segment produced gross margin of 41.7%, in line with expectations that margins in the second and third quarters would be lower than the first and fourth quarters due to normal seasonality in our electricity segment. This quarter benefited from minimal well field issues and a lower number of pump replacements, partially mitigating the seasonal decline typically seen in gross margins in the second and third quarters and boosted overall profitability. We expect continued growth in the electricity segment in the second half of 2019, as our 7 MW Tungsten Solar expansion is now online. We remain on track with our near-term growth target and plan to add approximately 120 MW to 135 MW to our portfolio by the end of 2021. We are also optimistic about the longer-term outlook for growth at Ormat resulting from the continuing expansion of our international geothermal portfolio, as indicated most recently by the expansion of our operations in Indonesia, where we recently acquired 49% of the Ijen project."
Mr. Angel continued, "Timing of product segment orders led to a slight year-over-year decline in revenues, but we maintain a healthy backlog of approximately $201 million, including approximately $26 million of new orders booked during the second quarter, and a pipeline of additional opportunities around the world. Two large Turkish contracts continue to weigh on margins in this segment, but we believe this is a short-term phenomenon and we expect margin expansion in the second-half of this year."
FINANCIAL HIGHLIGHTS FOR THE SECOND QUARTER OF 2019
- Total revenues of $184.1 million, up 3.2% compared to the second quarter of 2018;
- Electricity segment revenues of $129.1 million, up 5.6% compared to Q2 2018, with the growth resulting from recently expanded operations at McGuinness Hills and Olkaria, as well as contributions from recently acquired USG, combining to partially offset the loss of revenues resulting from the temporary shut down of the Puna power plant;
- Electricity segment gross margin was 42.8% compared to 33.5% for Q2 2018. Excluding the impact from Puna, Electricity segment gross margin would have been 41.7% in Q2 2019 and 37.6% in Q2 2018;
- Product segment backlog was approximately $201 million as of August 7, 2019;
- Net income was $36.2 million in Q2 2019 compared to net income of $2.7 million in Q2 2018 primarily due to a decrease in income tax provision;
- Net income attributable to the Company's stockholders in Q2 2019 was $33.9 million, or $0.66 per diluted share, compared to a loss of $0.3 million, or $0.01 per diluted share in Q2 2018;
- Adjusted Net income attributable to the Company's stockholders3 in Q2 2019, was $20.6 million, or $0.40 per diluted share, compared to $16.6 million, or $0.32 per diluted share in Q2 2018;
- Ormat's second quarter effective tax rate benefit is 11.2%; Excluding a non-recurring tax benefit occurring this quarter, Ormat's income tax provision effective tax rate would have been 31.1%;
- Adjusted EBITDA increased 17.4% to $94.9 million from $80.8 million in Q2 20182. Adjusted EBITDA includes approximately $4.1 million and negative $0.6 million of Adjusted EBITDA related to Puna in Q2 2019 and Q2 2018, respectively. Adjusted EBITDA excluding any impact from Puna was $90.8 million in Q2 2019 and $81.4 million in Q2 2018; The Puna related EBITDA included $6.8 million of insurance proceeds received for business interruption in Q2 2019. No proceeds were received in Q2 2018;
- The Company declared a quarterly dividend of $0.11 per share for the second quarter of 2019.
RECENT DEVELOPMENTS
- Commenced commercial operation of our first-ever geothermal and solar hybrid project, a 7MW AC solar expansion of our Tungsten Mountain geothermal project in Churchill County, Nevada.
- Completed the acquisition of 49% ownership in the Ijen geothermal project, which is under development in Indonesia.
- Closed a $23.5 million non-recourse loan to refinance the Plumsted and Stryker projects, two 20 MW each battery energy storage assets located in New Jersey.
