Ormat Technologies, Inc. · NYSE:ORA
Ormat Technologies — Q3 2015 Earnings Presentation
26 slides from Ormat Technologies's earnings presentation, Nov 4, 2015
Slide 1: Third Quarter 2015 Earnings Call
Ormat Technologies, Inc. Third Quarter 2015 Earnings Call November 4, 2015 Green energy you can rely on Copyright © 2015 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 • 2015 Third quarter prepared remarks • Q3 2015 highlights: Isaac Angel, CEO • Financial overview: Doron Blachar, CFO • Operations & business updates: Isaac Angel, CEO • Q&A 3 Copyright © 2015 Ormat Technologies, Inc.
Slide 4: Q3 2015 Highlights and Recent Developments
Q3 2015 Highlights and Recent Developments • Total revenues increased 16.1% to a quarterly record of $162.9 million, vs. $140.2 million in the third quarter of 2014 • Product segment revenues increased 73.9% to $65.6 million, vs. $37.7 million in the third quarter of 2014 • Electricity revenues of $
Slide 5: Financial Results
Financial Results Doron Blachar, CFO Green energy you can rely on 5 Copyright © 2015 Ormat Technologies, Inc.
Slide 6: Total Revenues
Total Revenues Total Revenues Total Cost of Revenues Segment Contribution +22.6 million (16.1%) +18.8 million (22.1%) $162.9 $140.2 $103.5 $84.8 27% 40% 60% 73% Q3 2014 Q3 2015 Q3 2014 Q3 2015 Q3 2014 Q3 2015 Electricity Segment Product Segment All amounts in million USD 6 Copyright © 2015 Ormat Tec
Slide 7: Electricity Segment
Electricity Segment Revenues Cost of Revenues -5.3 million (5.1%) -0.2 million (0.4%) $102.5 $97.2 $61.7 $61.5 Q3 2014 Q3 2015 Q3 2014 Q3 2015 • Lower energy rates due to actual natural gas and oil prices • Decrease in O&M costs in many of our • Reduction in net gain on derivative contracts power pl
Slide 8: Product Segment
Product Segment Revenues Cost of Revenues +27.9 million (73.9%) +19.0 million (82.4%) $65.6 $42.0 $37.7 $23.0 Q3 2014 Q3 2015 Q3 2014 Q3 2015 All amounts in million USD 8 Copyright © 2015 Ormat Technologies, Inc.
Slide 9: Gross Margin
Gross Margin Combined Electricity Segment Product Segment 39.6% 39.8% 38.9% 36.4% 36.8% 36.0% Q3 2014 Q3 2015 Q3 2014 Q3 2015 Q3 2014 Q3 2015 9 Copyright © 2015 Ormat Technologies, Inc.
Slide 10: Operating Income
Operating Income Total Electricity Segment Product Segment +2.7 million (6.1%) $46.5 $43.8 $32.4 $28.3 $18.1 $11.4 Q3 2014 Q3 2015 Q3 2014 Q3 2015 Q3 2014 Q3 2015 All amounts in million USD 10 Copyright © 2015 Ormat Technologies, Inc.
Slide 11: Interest Expense, Net
Interest Expense, Net Interest Expense, Net Gross Interest Expense Capitalized Interest -4.7 million (21.1%) $22.5 $23.3 $17.7 $18.9 $0.8 $1.1 Q3 2014 Q3 2015 Q3 2014 Q3 2015 Q3 2014 Q3 2015 Decrease was primarily due to • Lower interest expense as a result of debt payment • $1.1 million decrease in
Slide 12: Net Income Attributable to the Company's Stockholders & EPS
Net Income Attributable to the Company's Stockholders & EPS Net Income Attributable to the Earnings per Share (Diluted) Company's Stockholders $72.1 $1.41 $23.4 $16.5 $0.46 $0.36 Q3 2014 Q3 2015 Q3 2015 Q32014 Q3 2015 Q3 2015 Excluding deferred Excluding deferred tax asset and tax asset and related
Slide 13: Adjusted EBITDA
Adjusted EBITDA Total Electricity Segment Product Segment 212.2 204.4 161.8 166.5 79.0 69.1 56.0 58.8 42.6 45.7 13.1 20.2 Q3 Q3 9M 9M Q3 Q3 9M 9M Q3 Q3 9M 9M 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 Q3-14 Q3-15 9M-14 9M-15 Q3-14 Q3-15 9M-14 9M-15 Q3-14 Q3-15 9M-14 9M-15 D&A 23.6 2
Slide 14: Cash, Cash Equivalents, Marketable Securities and Short-Term Bank Deposit
Cash, Cash Equivalents, Marketable Securities and Short-Term Bank Deposit 117.6 156.8 60.8 30.6 13.9 5.7 $171.5 123.0 42.0 22.7 $40.2 15.4 Dec. 31 2014 Share Net change in Proceeds Cash from Issuance of Capital Debt Repurchase Cash paid to Cash dividend Sept. 30, exchange restricted from the loan op
Slide 15: Payment of Principal Due by Period
Payment of Principal Due by Period The average interest rate for the total debt is 6.06% Q1-2015 Q2-2015 Q3-2015 Q4-2015 Year 2015 Long-term non-recourse debt & limited recourse debt 0 0 0 5,373 5,373 Senior Secured Notes (non-recourse) due 2020 0 0 0 15,849 15,849 Long-term loans (full recourse) 0
Slide 16: Operations & Business Updates
Operations & Business Updates Isaac Angel, CEO Green energy you can rely on Copyright © 2015 Ormat Technologies, Inc.
Slide 17: Operations Update
Operations Update Annual Generation1 Quarterly Generation1 4.3 4.5 3.5 3.9 3.3 3.6 3.7 1.0 1.1 2010 2011 2012 2013 2014 Q3 2014 Q3 2015 9M 2014 9M 2015 1Million MWh 17 Copyright © 2015 Ormat Technologies, Inc.
Slide 18: Operation Update
Operation Update • Completed 19 MW Don A. Campbell phase 2, Nevada • Began commercial operation on September 17, 2015 • Rapid execution - six months ahead of our original schedule • Northleaf Capital Partners will purchase 36.75% equity interest in the project once testing is completed Don A. Campbe
Slide 19: Construction Updates
Construction Updates • Plant 4, Olkaria III, Kenya • 24 MW expected in Q1 2016 • Sarulla, phase 1, Indonesia Plant 4, Olkaria III, Kenya • 14 MW1 expected in toward YE 2016 • Above listed and additional projects are expected to add between 70 and 95 MW1 by the end of 2017 1 Ormat’s share 19 Copyrigh
Slide 20: CapEx Needs for the Remainder of 2015
CapEx Needs for the Remainder of 2015 As of Sept. 30, 2015 Capital Needs ($ millions) 9 Construction & enhancements 2 Development & exploration 7 Maintenance CapEx $18 Total CapEx $31 Debt repayment $49 Total 20 Copyright © 2015 Ormat Technologies, Inc.
Slide 21: Product Segment
Product Segment • Backlog of approximately $282 million as of November 3, 2015 • Includes revenues for the period between October 1 and November 3, 2015 • Revenues are expected to be recognized in the years 2015-2017 Ready for shipment to Sarulla, Indonesia Shipment to Sarulla, Indonesia 21 Copyrigh
Slide 22: Execution of Near-Term Strategic Plan
Execution of Near-Term Strategic Plan • Focus on profitable growth by enhancing existing operations • Reduced the operating cost per MWh1 42.6 36.8 31.2 32.2 31.1 30.2 28.8 26.0 Average TTM $34.6/MWh Average TTM $30.1/MWh Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 1 Operating co
Slide 23: Execution of Near-Term Strategic Plan
Execution of Near-Term Strategic Plan • Continued diversification of technologies • Signed a strategic collaboration agreement (SCA) with Toshiba to develop strategic opportunities for collaboration in the areas of geothermal power generation systems and related equipment • Significant step in our l
Slide 24: Regulatory Updates
Regulatory Updates Continued support for renewables & geothermal • California - October 2015 • Governor Brown signs 50% renewable portfolio standard into law • California expanded on its historic 33% by 2020 renewable portfolio standard (RPS) policy to 50% by 2030 • Hawaii - June 2015 • Governor Dav
Slide 25: 2015 Guidance
2015 Guidance • Increase and narrow 2015 revenue guidance to be between $570 and $585 million • Product Segment - between $195 and $205 million • Electricity Segment - between $375 and $380 million • Increase Adjusted EBITDA 2015 guidance: • Between $282 and $292 million 25 Copyright © 2015 Ormat Te
Slide 26: Reconciliation of EBITDA, Adjusted EBITDA and Additional Cash Flows Information
Reconciliation of EBITDA Adjusted EBITDA and Additional Cash Flows Information • We calculate EBITDA as net income before interest, taxes, depreciation and amortization. We calculate Adjusted EBITDA as net income before interest, taxes, depreciation and amortization, adjusted for (i) termination fee