Ormat Technologies Reports First Quarter Revenue of $151.6 Million and Adjusted EBITDA of $80.2 Million
Ormat Technologies, Inc. receently announced financial results for the first quarter ended March 31, 2016.
First Quarter Highlights and Recent Developments:
Total revenues of $151.6 million, up 26.1% compared to the first quarter of 2015;
Product segment revenues of $43.7 million, up 44.4% compared to the first quarter of 2015;
Electricity segment revenues of $107.9 million, up 19.9% compared to the first quarter of 2015;
Electricity generation increased 16.4% to 1.4 million MWh;
Gross margin increased to 42.1% of total revenues compared to 36.6% in the first quarter of 2015;
Operating income grew 69.3% to $50.5 million compared to $29.9 million in the first quarter of 2015;
Adjusted EBITDA of $80.2 million, up 22.8% compared to $65.3 million in the first quarter of 2015;
Net income attributable to the company’s shareholders of $29.3 million, or $0.59 per diluted share, compared to $10.0 million, or $0.21 per diluted share, in the first quarter of 2015;
Declared a quarterly dividend of $0.07 per share for the first quarter of 2016;
Signed definitive agreements to acquire geothermal power plant in the Island of Guadeloupe; and
Signed an agreement to jointly build, own, and operate the Rabbit Hill Energy Storage Project located in Georgetown, Texas which moves us for the first time into the energy storage arena.
“This was a strong start to 2016, as our focus on manufacturing and operational efficiency drove both top-line growth and margin expansion, enabling us to deliver a 22.8% increase in Adjusted EBITDA and a 191.8% increase in net income compared to the first quarter last year,” noted Isaac Angel, Chief Executive Officer. “We expect our gross margins in the products segment during 2016 to be higher than normal, thanks to lower commodity prices, the contribution of several large contracts, and higher revenue contribution. Gross margins should normalize in 2017. In the electricity segment, the contribution of second phase at our McGinness Hills and Don A. Campbell plants as well as the fourth plant at Olkaria are driving margin expansion, as additional capacity typically operates at higher gross margins due to more efficient utilization of infrastructure and related personnel expenses. Overall, our diversified revenue streams, and our methodical focus on operational excellence is enabling us to overcome challenges related to lower oil and natural gas prices and we were able to deliver strong and improving results.”
“In our electricity segment, we continue to expect to add 160 to 190 megawatts of capacity by the end of 2018,” continued Mr. Angel. “We will achieve this by bringing new plants online, expanding existing plants and adding capacity from our acquisition of a geothermal power plant in the Island of Guadeloupe in the Caribbean”. During the quarter, we also made our first announcement related to one of the key component in our long-term strategic goals. We signed an agreement to jointly build, own, and operate with Alevo, an energy storage project in Georgetown, Texas. Entering the energy storage market will advance our goals of transitioning from a geothermal company to a recognized leader in the renewable energy industry”.
Guidance
Mr. Angel added, “We reiterate our guidance and expect full-year 2016 total revenue of between $620 million and $640 million with product segment revenue of between $210 million and $220 million. For the electricity segment, we expect revenues to be between $410 million and $420 million. We expect 2016 Adjusted EBITDA of $300 to $310 million for the full year. We expect annual Adjusted EBITDA attributable to minority’s interest to be approximately $17 million. This amount assumes the inclusion of the second phase of the Don A. Campbell power plant in the joint venture with Northleaf.”
Financial Summary
First Quarter Results
For the three months ended March 31, 2016, total revenues were $151.6 million, up from $120.2 million in the first quarter of 2015, an increase of 26.1%. Electricity revenues increased 19.9% to $107.9 million in the three months ended March 31, 2016, up from $90.0 million in the three months ended March 31, 2015. Product revenues increased 44.4% to $43.7 million in the three months ended March 31, 2016, up from $30.3 million in the three months ended March 31, 2015.
The company reported net income attributable to the company’s shareholders of $29.3 million, or $0.59 per diluted share, compared to net income attributable to the company’s shareholders of $10.0 million, or $0.21 per diluted share, for the same period last year.
Adjusted EBITDA for the three months ended March 31, 2016 was $80.2 million, compared to $65.3 million for the three months ended March 31, 2015, an increase of 22.8%. The reconciliation of GAAP net cash provided by (used in) operating activities and net income to EBITDA and Adjusted EBITDA and additional cash flows information is set forth below in this release.
On May 4, 2016, ORMAT’s Board of Directors approved a payment of a quarterly dividend of $0.07 per share pursuant to the company’s dividend policy. The dividend will be paid on May 24, 2016 to shareholders of record as of closing of business on May 18, 2016. In addition, the company expects to pay quarterly dividends of $0.07 per share in the next two quarters.
