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01/10 18:58
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The company reported mixed financial results with positive full-year growth but a decline in Q4 revenues and gross profit. The Q&A revealed uncertainties in electricity generation and geothermal projects, despite optimism in energy storage margins. The market cap suggests moderate sensitivity to earnings. Given the mixed signals and lack of clear guidance, the stock is likely to have a neutral movement, staying within -2% to 2%.
Total Revenues $879.7 million, growth of 6.1% year-over-year, driven by growth across all three business segments and strategic expansion in the electricity portfolio.
Fourth Quarter Revenues $230.7 million, down 4.4% year-over-year, primarily due to curtailments in the Electricity segment.
Gross Profit $272.6 million, a 3.3% increase compared to 2023, with fourth quarter gross profit declining 6.2% due to curtailments.
Net Income (Q4) $40.8 million or $0.67 per diluted share, up from $35.7 million or $0.59 per diluted share year-over-year.
Adjusted Net Income (Q4) $43.6 million or $0.72 per diluted share, an increase of 7.7% and 7.5% respectively year-over-year.
Net Income (Full Year) $123.7 million or $2.04 per diluted share, compared to $124.4 million or $2.08 per diluted share last year.
Adjusted Net Income (Full Year) $133.7 million or $2.2 per diluted share, an increase of 9.7% and 7.3% versus last year respectively.
Adjusted EBITDA (Full Year) $550.5 million, an increase of 14.3% compared to 2023, driven by new projects and improved performance.
Adjusted EBITDA (Q4) $145.5 million, an increase of 4.6% year-over-year, driven by contributions from new projects and improved pricing.
Electricity Segment Revenue (Q4) $180.1 million, decreased by 2.1% due to curtailments, with full year revenue increasing by 5.3% to $702.3 million.
Products Segment Revenue (Q4) $39.6 million, down 21.4%, while full year revenue grew by 4.4% to $139.7 million.
Energy Storage Segment Revenue (Q4) Increased by 56.7%, with full year revenue up 30.6% to $37.7 million, driven by new facilities.
Gross Margin (Electricity Segment) 34.9% in Q4 and 34.6% for the full year, impacted by curtailments.
Gross Margin (Products Segment) 18.4% for the full year, increased by 500 basis points due to better contract pricing.
Gross Margin (Energy Storage Segment) 9.5% in Q4 and 10.9% for the full year, marking significant improvement.
Net Debt $2.2 billion, equivalent to four times net debt to EBITDA, with a decrease supported by improved EBITDA.
Cash Flow from Operations Increased by 32.8% to $411 million, supported by improved asset performance and increased collections.
Total Debt Approximately $2.4 billion, with an average cost of debt at 4.66%.
Total Available Liquidity Approximately $667.1 million.
Capital Expenditure for 2025 Approximately $570 million, with planned investments in electricity and storage segments.
Product Segment Backlog: The Product segment backlog reached a record of $340 million, up 124% compared to Q4 of 2023, driven by a large EPC contract in New Zealand.
New Power Purchase Agreements (PPAs): Secured three new PPAs for Boyan power plant in Guadeloupe, and Hebe 1 and Mammoth 2 in California, capturing significantly higher rates.
New Capacity Additions: Successfully added 133 megawatts of new net capacity through organic growth and strategic M&A.
Energy Storage Segment Growth: Brought three new facilities online, including the 80 megawatts Bozident project, the largest in the portfolio.
Operational Efficiency: Achieved a 14.3% increase in adjusted EBITDA, driven by new projects and improved performance in existing facilities.
Tax Benefits: Anticipated to receive up to $160 million in cash proceeds related to PTC and ITC benefits in 2025.
Strategic Acquisition: Acquisition of Enel assets significantly boosted revenues and EBITDA.
Long-term Capacity Target: Targeting a portfolio capacity of 2.6 to 2.8 gigawatts by 2028, with a CAGR of 14% to 16%.
Curtailments Impact: The Electricity segment experienced a decline in revenue due to curtailments in the U.S. and Kenya, with a significant reduction in revenue anticipated in 2025, estimated between $10 million to $15 million.
Regulatory Risks: The company is navigating a fluid policy situation in the U.S. regarding geothermal projects and tax credits, which may impact project eligibility for PTC and ITC benefits.
Supply Chain Challenges: The removal of the Luiza project due to interconnection delays has pushed the project completion date to 2029, indicating potential supply chain and operational challenges.
Economic Factors: Wildfires in California have reduced electricity demand and caused overloads on the grid, leading to further curtailments of supplied power.
Debt Management: The company has a significant net debt of $2.2 billion, which poses a risk if not managed effectively, especially in a fluctuating market.
Electricity Segment Acquisition: Successful acquisition of Enel assets, boosting revenues and EBITDA.
New Power Purchase Agreements (PPAs): Secured three new PPAs for Boyan power plant in Guadeloupe and Hebe 1 and Mammoth 2 in California with significantly higher rates.
Energy Storage Segment Growth: Brought three new facilities online, including the largest storage facility in the portfolio.
Product Segment Backlog: Reached an all-time high backlog of $340 million, driven by a $210 million contract in New Zealand.
Capacity Growth Target: Targeting 2.6 to 2.8 gigawatts of portfolio capacity by 2028.
2025 Revenue Guidance: Expected total revenues to increase by 9% year-over-year, ranging between $935 million and $975 million.
Electricity Segment Revenue Guidance: Projected between $710 million and $725 million.
Product Segment Revenue Guidance: Projected between $172 million and $187 million.
Energy Storage Revenue Guidance: Projected between $53 million and $63 million.
Adjusted EBITDA Guidance: Expected to increase by approximately 5%, ranging between $563 million and $593 million.
Quarterly Dividend: $0.12 per share payable on March 26, 2025 to shareholders of record as of March 12, 2025.
Future Dividends: Expected to pay a quarterly dividend of $0.12 per share in each of the next three quarters.
Shareholder Return Plan: The company has a structured plan to return capital to shareholders through quarterly dividends.
The earnings call indicates strong financial performance with improved margins and higher PPA prices. The company has resolved past issues like the Imperial Valley grid failure and anticipates a strong Q4. While EGS projects won't impact 2028 targets, they show long-term potential. No equity financing is needed, and CapEx is covered by EBITDA and tax credits. The market cap suggests moderate volatility, leading to a positive prediction for stock price movement.
The earnings call reflects a positive sentiment with strong financial performance, strategic partnerships, and optimistic guidance. The acquisition and expansion plans, energy storage growth, and improved permitting are promising. The Q&A section supports this with ongoing negotiations and legal settlements favoring Ormat. The stock's market cap indicates moderate sensitivity to these factors, suggesting a positive stock price movement.
The earnings call presents a mixed picture: strong growth in energy storage and product segments, but declining electricity revenue and margins. The company's net debt is high, posing risks. Despite the dividend, lack of a repurchase program and unclear guidance on EGS technology implementation add uncertainty. The market cap suggests moderate reaction, likely resulting in a neutral stock price movement over the next two weeks.
The company reported mixed financial results with positive full-year growth but a decline in Q4 revenues and gross profit. The Q&A revealed uncertainties in electricity generation and geothermal projects, despite optimism in energy storage margins. The market cap suggests moderate sensitivity to earnings. Given the mixed signals and lack of clear guidance, the stock is likely to have a neutral movement, staying within -2% to 2%.
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