Ormat Technologies, Inc. · NYSE:ORA
Ormat Technologies — Q3 2014 Earnings Presentation
28 slides from Ormat Technologies's earnings presentation, Nov 6, 2014
Slide 1: Third Quarter 2014 Earnings Call
Ormat Technologies, Inc. Third Quarter 2014 Earnings Call November 6, 2014 Green energy you can rely on Copyright © 2014 Ormat Technologies, Inc.
Slide 2: Disclaimer
Disclaimer Information provided during this presentation 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. These forward-looking sta
Slide 3: Agenda
Agenda • 2014 Third Quarter Prepared Remarks • Quarter Highlights and Operations Update: Isaac Angel, CEO • Financial Overview: Doron Blachar, CFO • Business Update: Isaac Angel, CEO • Q&A 3 Copyright © 2014 Ormat Technologies, Inc.
Slide 4: Agenda
Agenda • 2014 Third Quarter Prepared Remarks • Quarter Highlights and Operations Update: Isaac Angel, CEO • Financial Overview: Doron Blachar, CFO • Business Update: Isaac Angel, CEO • Q&A 4 Copyright © 2014 Ormat Technologies, Inc.
Slide 5: Highlights
Highlights Quarterly financial highlights and recent developments: • Quarterly revenues increased 7.3% to $140.2 million compared to the third quarter of last year; • Gross margin increased from 30.4% in the third quarter of 2013 to 39.6% in the third quarter 2014; • Adjusted EBITDA grew 14.9% to $6
Slide 6: Total Generation (GWh)
Total Generation(GWh) Annual Quarterly 4,253 3,282 3,943 3,092 3,560 3,682 3,110 986 1,037 2009 2010 2011 2012 2013 Q3 2013 Q3 2014 9M 20139M 2014 6 Copyright © 2014 Ormat Technologies, Inc.
Slide 7: Projects Update
Projects Update • 30 MW McGinness Hills Phase 2, Nevada - Q1 2015 • PPA & financing is in place • Field development in advanced process • Equipment on its way to the site • Mammoth complex, California • Assessing refurbishment program • 330 MW Sarulla, Indonesia • Field development and initial const
Slide 8: Product Segment
Product Segment • Signed $22.3 million EPC Contract with the Utah Associated Municipal Power Systems (UAMPS) for a REG Project • Backlog as of Nov. 1, 2014 - approx. $363 million • The backlog includes: • Revenues for the period between Oct. 1 and Nov. 1, 2014 • The supply contract signed for the 33
Slide 9: CapEx Needs & Sources for the Balance of 2014
CapEx Needs & Sources for the Balance of 2014 As of the end of Sept 30, 2014 Capital Needs ($ millions) Sources of Capital ($ millions) 23 Construction & Enhancements1 42.5 Cash and cash equivalents 23 Development & Exploration 229.1 Unused corporate lines of credit 7 Maintenance CapEx 271.7 Total s
Slide 10: Financial Results
Financial Results Doron Blachar, CFO Green energy you can rely on 10 Copyright © 2014 Ormat Technologies, Inc.
Slide 11: Total Revenues
Total Revenues Total Revenues Total Cost of Revenues Segment Contribution +9.5 million (7.3%) -6.2 million (6.8%) 140.2 27% 32% 130.7 91.0 84.8 68% 73% Q3 2013 Q3 2014 Q3 2013 Q3 2014 Q3 2013 Q3 2014 Electricity Segment Product Segment All amounts in million USD 11 Copyright © 2014 Ormat Technologie
Slide 12: Electricity Segment
Electricity Segment Revenues Cost of Revenues +13.5 million (15.2%) +0.4 million (0.6%) 6.7 $102.5 2.5 4.3 $89.0 61.4 61.7 Q3 2013 Net increase in Net increase in Contribution of Q3 2014 Q3 2013 Q3 2014 generation gain on derivative Olkaria and DAC contracts • Average revenue rate was $90 per MWh in
Slide 13: Product Segment
Product Segment Revenues Cost of Revenues -4.0 million (9.6%) -6.6 million (22.3%) 41.8 37.7 29.6 23.0 Q3 2013 Q3 2014 Q3 2013 Q3 2014 Decrease primarily due to: Decrease primarily due to: • Timing of revenue recognition, and different product • Decrease in revenues mix All amounts in million USD 13
Slide 14: Gross Margin
Gross Margin Combined 39.6% 36.3% 30.4% 29.1% Q3 2013 Q3 2014 9M 2013 9M 2014 14 Copyright © 2014 Ormat Technologies, Inc.
Slide 15: Gross Margin by Segment
Gross Margin Electricity Segment Product Segment 39.8% 38.9% 37.9% 35.6% 31.1% 29.9% 28.5% 29.0% Q3 2013 Q3 2014 9M 2013 9M 2014 Q3 2013 Q3 2014 9M 2013 9M 2014 15 Copyright © 2014 Ormat Technologies, Inc.
Slide 16: Operating Income
Operating Income Total 43.8 Electricity Segment Product Segment 32.4 29.8 20.7 11.4 9.1 Q3 2013 Q3 2014 Q3 2013 Q3 2014 Q3 2013 Q3 2014 The increase was principally due to: • Increase in gross margin in both Electricity and Product segments All amounts in million USD 16 Copyright © 2014 Ormat Techno
Slide 17: Interest Expense, Net
Interest Expense, Net Interest Expense, Net +4.0 million (21.9%) Gross Interest Expense Capitalized Interest 22.5 22.3 20.3 18.5 1.8 0.8 Q3 2013 Q3 2014 Q3 2013 Q3 2014 Q3 2013 Q3 2014 Increase was primarily due to • Two drawdowns (OFC 2 and OPIC), which replaced revolving corporate lines of credit
Slide 18: Net Income Attributable to the Company's Stockholders & EPS
Net Income Attributable to the Company's Stockholders & EPS Net Income Attributable to the Company's Stockholders Earnings per Share $1.03 $47.2 $0.72 $33.1 $16.5 $0.36 $13.0 $0.28 Q3 2013 Q3 2014 9M 20139M 2014 Q3 2013 Q3 2014 9M 2013 9M 2014 The increase was attributable to • $14.0 million increas
Slide 19: Adjusted EBITDA
Adjusted EBITDA Total Electricity Segment Product Segment 199.6 175.7 164.5 134.2 69.2 60.3 59.8 48.9 41.5 35.1 +9.0 million (14.9%) +23.9 million (13.6%) 11.3 9.5 Q3 Q3 9M 9M Q3 Q3 9M 9M Q3 Q3 9M 9M 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 Q3-13 Q3-14 9M-13 9M-14 Q3-13 Q3-14 9M-1
Slide 20: Cash, Cash Equivalents and Short-Term Bank Deposit
Cash, Cash Equivalents and Short-Term Bank Deposit 122.6 178.8 83.9 140.0 80.2 76.4 35.3 57.4 16.5 27.4 12.9 3.9 42.5 Dec. 31 2013 Cash grant Proceeds from Proceeds from Cash from Capital net proceeds Repayment of Net change in Cash to OPC & Repurchase Other September 30, from the U.S. Heber Solar O
Slide 21: Payment of Principal Due by Period
Payment of Principal Due by Period The annual average interest rate for the total debt is 6.0% Q1-2014 Q2-2014 Q3-2014 Q4-2014 Year 2014 Long-term non-recourse debt & limited recourse debt 0 0 0 4,499 4,499 Senior Secured Notes (non-recourse) due 2020 0 0 0 15,513 15,513 Long-term loans (full recour
Slide 22: Financing Updates
Financing Updates • Repaid loan facility with EIG* for the Amatitlan plant in Guatemala • The outstanding amount was approximately $30.0 million • The Note was scheduled to mature on June 15, 2016 carried an interest rate of 9.83% • New financing agreement with improved terms is negotiated • Signed
Slide 23: Business Update
Business Update Isaac Angel, CEO Green energy you can rely on Copyright © 2014 Ormat Technologies, Inc.
Slide 24: Revenues Guidance for 2014
Revenues Guidance for 2014 • Electricity Segment - between $375 and $380 million • Product Segment - between $175 and $180 million • Total: between $550 and $560 million 24 Copyright © 2014 Ormat Technologies, Inc.
Slide 25: Regulatory Updates
Regulatory Updates Continues support for renewables & geothermal • California • On September 26, 2014 Governor Brown signed AB-2363 • Law requires the PUC to determine the integration costs for renewable resources • Intermittent renewables (Solar & wind) integration costs will be captured in a cost
Slide 26: Short Term Outlook
Short Term Outlook • New management and organization structure • Streamline decision making process • Reduce overhead • Near term outlook • Improving power plants’ efficiency • Optimizing EBITDA • Expanding global footprint • Reassessing medium/long-term company's strategy 26 Copyright © 2014 Ormat
Slide 27: Q&A
Q&A Green energy you can rely on Copyright © 2014 Ormat Technologies, Inc.
Slide 28: Reconciliation of Adjusted EBITDA and Additional Cash Flows Information
Reconciliation of Adjusted EBITDA and Additional Cash Flows Information Ormat Technologies, Inc. and Subsidiaries Reconciliation of EBITDA, Adjusted EBITDA and Additional Cash Flows Information For the Nine and Three-Month Periods Ended September 30, 2014 and 2013 (Unaudited) We calculate EBITDA as