On November 6, 2024, Ormat Technologies Inc (ORA, Financial) released its 8-K filing detailing its financial results for the third quarter of 2024. The company, a leader in the geothermal energy power business, operates through three segments: Electricity, Product, and Energy Storage. Despite a slight revenue miss, the company reported a strong performance in adjusted earnings per share (EPS), surpassing analyst expectations.
Performance Overview
Ormat Technologies Inc (ORA, Financial) reported total revenues of $211.8 million for Q3 2024, a 1.8% increase from the same period last year, but slightly below the analyst estimate of $216.79 million. The company's adjusted EPS stood at $0.42, exceeding the analyst estimate of $0.30. This performance was driven by the strong contribution from recently acquired Enel assets and successful drilling campaigns at the Puna and Olkaria power plants.
Segment Analysis
The Electricity segment, which involves the development and operation of power plants, saw a 4.7% increase in revenue to $164.6 million. However, the Product segment experienced a decline of 6.2% to $37.4 million, while the Energy Storage segment saw an 11.1% decrease to $9.8 million. Despite these challenges, the company achieved a 16.3% growth in adjusted EBITDA, reaching $137.7 million, highlighting the effectiveness of its operational strategies.
Financial Achievements and Challenges
Ormat Technologies Inc (ORA, Financial) reported a gross profit of $58.9 million, with a gross margin of 27.8%, slightly down from 28.8% in Q3 2023. The net income attributable to the company's stockholders was $22.1 million, a significant decrease of 37.7% from the previous year. The diluted EPS also fell by 39.0% to $0.36. These declines were attributed to increased general and administrative expenses and higher interest expenses.
“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,” said Doron Blachar, Chief Executive Officer of Ormat Technologies.
Balance Sheet and Cash Flow
As of September 30, 2024, Ormat Technologies Inc (ORA, Financial) reported total assets of $5.59 billion, up from $5.21 billion at the end of 2023. The company's cash and cash equivalents stood at $88.1 million, a decrease from $195.8 million at the end of 2023, reflecting significant investments in property, plant, and equipment. Total liabilities increased to $3.07 billion, primarily due to higher long-term debt.
Strategic Developments and Future Outlook
Ormat Technologies Inc (ORA, Financial) continues to expand its energy storage portfolio, with the recent commercial operation of the 80MW/320MWh Bottleneck storage project and new contracts in Texas. The company remains optimistic about future growth, driven by global decarbonization efforts and increased electricity demand.
“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,” Blachar added.
Overall, Ormat Technologies Inc (ORA, Financial) demonstrated resilience in its Q3 2024 financial performance, with strong adjusted EBITDA growth and strategic advancements in its energy storage segment, positioning the company well for future opportunities in the renewable energy sector.
Explore the complete 8-K earnings release (here) from Ormat Technologies Inc for further details.
