Geothermal energy company Ormat Technologies (TASE: ORA; NYSE: ORA) recorded 10.4% growth in first quarter revenue to $184 million, which is higher than the consensus analysts’ estimate. The company beat the analysts’ estimate on net profit as well, posting earnings per share of $0.35, which compares with an estimate of $0.33. Ormat lowered its annual revenue guidance, however, although it left its EBITDA guidance unchanged.
Ormat’s share price is down 4.20% on the Tel Aviv Stock Exchange this morning, at NIS 246.20.
Ormat, headed by Doron Blachar, builds geothermal power plants, to be operated by the company itself (electricity segment) or by others (product segment). It is also active in energy storage.
In the electricity segment, revenue increased by 12.1% for the first quarter of 2022, in comparison with the corresponding quarter of 2021, to $163 million. Product segment revenue increased 69.2% to $14.6 million, and the company had a product segment backlog of $45.7 at the end of the quarter. Energy storage segment revenue decreased 48.5% to $6.6 million, which the company explained was primarily due to the absence of a one-time revenue of $5.4 million in the first quarter of 2021 related to the February power crisis in Texas.
On a GAAP basis, operating profit declined 9.6% to $45.1 million, among other things because of higher operating costs and recognition of a small decline in value of energy storage assets. Nevertheless, net profit attributable to shareholders rose 20.8% to $18.4 million. Adjusted EBITDA for the first quarter was $108 million, up from $99.2 million in the corresponding quarter. The rise is attributed to the strength of the electricity segment in the quarter.
As mentioned, Ormat has reduced its annual revenue guidance. It now forecasts revenue of $710-735 million in 2022, whereas the previous guidance was $725-750 million. The reduction relates entirely to the electricity segment. Adjusted EBITDA is forecast to be $430-450 million.
“We are encouraged by the company’s ability to continue driving solid operating performance, as we delivered strong quarterly net income and Adjusted EBITDA, along with meaningful year-over-year growth in revenues,” Blachar said. “Overall growth in the first quarter was driven by the McGinness Hills enhancement, the increased capacity at Puna and the addition of the Dixie Valley and Beowawe power plants to our asset portfolio.
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“We recently commenced commercial operation of Tungsten Mountain 2, which successfully increased the total the Tungsten complex by 13 MW, and we are on track to complete construction of the CD4 geothermal power plant, the Tungsten Solar, the Steamboat Hills Solar and the Wister Solar facilities by the end of the second quarter of this year.
“We remain confident in our long-term plans to increase our combined geothermal, energy storage and solar generating portfolio to more than 1.5 GW by 2023. Further, we are on track to deliver an annual adjusted EBITDA of $500 million on a run-rate basis towards the end of 2022 and expect these figures to continue their healthy growth trajectory as we move forward with our plans in 2022 and beyond.”
Published by Globes, Israel business news – en.globes.co.il – on May 3, 2022.
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