Ormat Technologies Reports Third Quarter 2024 Financial Results

REVENUE AND ADJUSTED EBITDA GROWTH HIGHLIGHT CONTINUED PROGRESS TOWARDS ACHIEVING GROWTH TARGETS

HIGHLIGHTS

• ELECTRICITY SEGMENT REVENUES AND ADJUSTED EBITDA INCREASE DRIVEN BY SOLID OPERATIONAL EXECUTION AND A STRATEGICALLY EXPANDED GENERATION PORTFOLIO
• COMPANY NARROWS ITS FULL YEAR REVENUE GUIDANCE AND INCREASES ITS FULL YEAR ADJUSTED EBITDA GUIDANCE, FOLLOWING STRONG THIRD QUARTER RESULTS
• COMPANY ANNOUNCED IN OCTOBER THE COMMERCIAL OPERATION OF ITS LARGEST STORAGE PROJECT TO DATE AND PLANS TO COMPLETE THE PROJECT'S INVESTMENT TAX CREDIT TRANSFER BY END OF YEAR

RENO, Nev., Nov. 06, 2024 (GLOBE NEWSWIRE) -- Ormat Technologies, Inc. (: ORA), a leading renewable energy company, today announced financial results for the third quarter ended September 30, 2024.

KEY FINANCIAL RESULTS TBU

“Our third quarter financial performance was driven by the strong contribution of our recently acquired Enel assets and the results of two successful drilling campaigns at our Puna and Olkaria power plants. Adjusted EBITDA grew by 16.3% during the quarter, driven by growth across all three of our operating segments. In addition, we generated higher transferred PTCs during the quarter at improved PTC rates. This robust performance enabled us to raise our 2024 annual Adjusted EBITDA guidance, highlighting Ormat’s strong financial results thus far this year and our confidence in our coming quarter.” said Doron Blachar, Chief Executive Officer of Ormat Technologies."

“We continue to make great progress in our strategic efforts to balance our Energy Storage portfolio between contracted and merchant exposure as we focus on delivering consistent stability and improved margins. Our progress is highlighted by the recent commercial operation of our 80MW/320MWh Bottleneck storage project. This key development comes in addition to multiple other contracts signed during the third quarter: an RA (Resource adequacy) agreement with the City of Riverside for our 80MW/320MWh Shirk storage facility and the signing of our first two tolling agreements in Texas for our 60MW/120MWh Lower Rio storage facility and our 60MW/120MWh Bird Dog storage facility. These achievements serve as a testament to our team’s ability to execute across Ormat’s portfolio expansion strategy and to bring profitable projects to fruition.”

Blachar continued, “As we look ahead, we continue to see strong industry tailwinds globally for both Geothermal and Energy Storage that will help accelerate improved profitability. We expect that as electricity demand continues to increase due to global decarbonization efforts, the electrification of the modern economy, as well as the rapid expansion of data centers and computing needs, we will remain well-positioned to capitalize on these trends and convert them into continued returns.”

FINANCIAL AND RECENT BUSINESS HIGHLIGHTS

• Net income attributable to the Company’s stockholders for the third quarter was $22.1 million, compared to $35.5 in the same period last year. Diluted EPS for the third quarter was $0.36, compared with $0.59 in the prior year period. This decrease in net income from the same period last year was mainly driven by a $9.4 million tax income, recorded in the third quarter of 2023 related to changes in Kenya tax laws.
• Adjusted net income attributable to the Company’s stockholders for the third quarter was $26.3 million, compared to $28.2 million last year. Adjusted EPS was $0.42, compared to $0.47 in the prior year period.
• Adjusted EBITDA for the third quarter was $137.7 million, an increase of 16.3% compared to 2023. The year-over-year increase in Adjusted EBITDA was driven by contribution of the Enel assets we acquired in the first quarter of 2024, the sale of tax benefits from newly built plants, improved performance and pricing of our Puna power plant and a legal settlement with a battery supplier, which we expect to continue to receive over the next 18 months, which reflects the loss of revenues as a result of battery non- supply.
• Electricity segment revenues increased 4.7% year-over-year. Third quarter revenue growth was driven by the contribution of our acquired Enel assets and higher generation and pricing at Puna. The increase was partially offset by the partial outage at our Dixie Valley power plant, which is currently in the startup phase following an unplanned outage. The decrease in the Electricity segment gross margin was mainly impacted by higher depreciation related to the acquired Enel assets.
• Product segment revenues decreased 6.2% due to the timing of revenue recognition during the third quarter.
• Product segment backlog stands at approximately $165.0 million as of November 5, 2024, and includes approximately $33.0 million in new contracts signed during the third quarter.
• Energy Storage segment revenues decreased 11.1% year-over-year, due to higher energy rates realized in ERCOT during the previous year as the result of an inclement weather event.
• G&A expenses increased mainly due to one-time consulting fees of $4.8 million related to a settlement agreement with a third-party battery systems supplier.
• Other operating income was $6.3 million recorded in the third quarter 2024 and represents the non-refundable portion of the recovery of damages received from a third-party battery systems supplier as part of a settlement agreement entered into in August 2024, which reflects the impact associated with lost revenues due to delays caused by batteries that were not supplied.
  

IN ADDITION, SINCE THE END OF THE SECOND QUARTER, THE COMPANY:

• Announced the successful commencement of commercial operations at the 80MW/320MWh Bottleneck Energy Storage facility in the Central Valley of California. The Bottleneck facility is the Company’s largest energy storage facility.
• Secured a 15-year RA agreement with the City of Riverside for the Shirk Energy Storage facility, which includes a guaranteed COD for March 1, 2026.
• Signed the first tolling agreements in Texas for two 60MW/120MWh Energy Storage Facilities. The agreements secure fixed, long-term revenues, and de-risked Ormat’s Texas storage portfolio by approximately 50%, aligning with the Company’s long-term plan to improve segment profitability and accelerate growth.
• Secured land parcels in Nevada’s BLM auction to further advance geothermal development in the state.

2024 GUIDANCE

• Total revenues of between $875 million and $893 million.
• Electricity segment revenues between $710 million and $715 million.
• Product segment revenues of between $130 million and $138 million.
• Energy Storage revenues of between $35 million and $40 million.
• Adjusted EBITDA to be between $540 million and $555 million.
  • Adjusted EBITDA attributable to minority interest of approximately $20 million.

The Company provides a reconciliation of Adjusted EBITDA, a non-GAAP financial measure for the three and nine months ended September 30, 2024. 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 November 6, 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 December 4, 2024, to stockholders of record as of the close of business on November 20, 2024.

CONFERENCE CALL DETAILS

Ormat will host a conference call to discuss its financial results and other matters discussed in this press release on Thursday, November 7, 2024, at 10:00 a.m. ET.

To join the call, please dial +1-646-960-0440, approximately 15 minutes prior to the scheduled start of the call. The access code for the call is 2705841. Please request the “Ormat Technologies, Inc. call” when prompted by the conference call operator. The conference call will also be accompanied by a live webcast which will be hosted 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, please dial +1-647-362-9199. Please use the replay access code 2705841. 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 3,400 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 1,500MW with a 1,230MW geothermal and solar generation portfolio that is spread globally in the U.S., Kenya, Guatemala, Indonesia, Honduras, and Guadeloupe, and a 270MW 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 23, 2024, 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 nine-Month periods Ended September 30, 2024, and 2023

ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES
Condensed Consolidated Balance Sheet
For the Periods Ended September 30, 2024, and December 31, 2023

ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES
Reconciliation of EBITDA and Adjusted EBITDA
For the Three- and Nine-Month Periods Ended September 30, 2024, and 2023

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 not designated as hedging instruments; (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.

The following table reconciles net income to EBITDA and Adjusted EBITDA for the three-and-nine-month periods ended September 30, 2024, and 2023:

ORMAT TECHNOLOGIES, INC AND SUBSIDIARIES
Reconciliation of Adjusted Net Income attributable to the Company's stockholders and Adjusted EPS
For the Three and Nine-month Periods Ended September 30, 2024, and 2023

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 reconciles Net income attributable to the Company's stockholders and Adjusted EPS for the three and Nine-month periods ended September 30, 2024, and 2023.