Ormat Technologies, Inc. · NYSE:ORA
Ormat Technologies — Q2 2015 Earnings Presentation
24 slides from Ormat Technologies's earnings presentation, Aug 4, 2015
Slide 1: Second Quarter 2015 Earnings Call
Ormat Technologies, Inc. Second Quarter 2015 Earnings Call August 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 Second quarter prepared remarks • Q2 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: Q2 2015 Highlights and Recent Developments
Q2 2015 Highlights and Recent Developments • Total revenue of $140.5 million, compared to $127.6 million in the second quarter of 2014; • Electricity revenues of $90.9 million, compared to $91.7 million in the second quarter of 2014; • Product segment revenue of $49.6 million, compared to $35.9 mill
Slide 5: Financial Results
Financial Results Doron Blachar, CFO Green energy you can rely on 5 Copyright © 2015 Ormat Technologies, Inc.
Slide 6: Total Revenue
Total Revenue Total Revenue Total Cost of Revenue Segment Contribution +12.9 million (10.1%) +2.1 million (2.3%) $140.5 $127.6 28% $87.6 $89.7 35% 65% 72% Q2 2014 Q2 2015 Q2 2014 Q2 2015 Q2 2014 Q2 2015 Electricity Segment Product Segment All amounts in million USD 6 Copyright © 2015 Ormat Technolog
Slide 7: Electricity Segment
Electricity Segment Revenue Cost of Revenue -0.8 million (0.9%) -4.8 million (7.1%) $91.7 $90.9 $67.3 $62.5 Q2 2014 Q2 2015 Q2 2014 Q2 2015 • Lower energy rates due to actual natural gas and oil prices • North Brawley incurred higher cost in Q2 2014 • Lower generation in Puna due to last summer’s hu
Slide 8: Product Segment
Product Segment Revenue Cost of Revenue +13.7 million (38.0%) +6.9 million (33.7.%) $49.6 $35.9 $27.2 $20.3 Q2 2014 Q2 2015 Q2 2014 Q2 2015 All amounts in million USD 8 Copyright © 2015 Ormat Technologies, Inc.
Slide 9: Gross Margin
Gross Margin Combined Electricity Segment Product Segment 45.2% 43.4% 36.1% 31.3% 31.2% 26.6% Q2 2014 Q2 2015 Q2 2014 Q2 2015 Q2 2014 Q2 2015 9 Copyright © 2015 Ormat Technologies, Inc.
Slide 10: Operating Income
Operating Income Total Electricity Segment Product Segment $38.6 $30.4 $22.3 $20.9 $17.7 $17.6 $12.8 $9.5 +27.0% +18.7% +38.3% Q2 2014 Q2 2014 Q2 2015 Q2 2014 Q2 2014 Q2 2015 Q2 2014 Q2 2015 Excluding Excluding Write off* Write off* *Excluding an $8.1 million Write-off of unsuccessful exploration ac
Slide 11: Interest Expense, Net
Interest Expense, Net Interest Expense, Net Gross Interest Expense Capitalized Interest -3.2 million (14.5%) $22.1 $22.5 $18.9 $19.9 $0.4 $1.0 Q2 2014 Q2 2015 Q2 2014 Q2 2015 Q2 2014 Q2 2015 Decrease was primarily due to • Lower interest expense as a result of principal payments Partially offset by
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 +5.3 million (57.8%) $14.4 $9.1 $0.28 $0.20 Q2 2014 Q2 2015 Q2 2014 Q2 2015 • Increase was due to an increase in operating income • The net income includes •
Slide 13: Adjusted EBITDA
Adjusted EBITDA Total Electricity Segment Product Segment 135.3 133.2 105.8 107.7 67.8 61.8 46.3 48.7 29.5 25.5 15.6 19.2 Q2 Q2 H1 H1 Q2 Q2 H1 H1 Q2 Q2 H1 H1 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 Q2-14 Q2-15 H1-14 H1-15 Q2-14 Q2-15 H1-14 H1-15 Q2-14 Q2-15 H1-14 H1-15 D&A 23.5 2
Slide 14: Cash, Cash Equivalents, Marketable Securities and Short-Term Bank Deposit
Cash, Cash Equivalents, Marketable Securities and Short-Term Bank Deposit 86.1 156.8 49.7 30.6 11.6 9.4 $137.7 112.7 $40.2 15.4 Dec. 31 2014 Share exchange Cash from Issuance of Capital Debt Repayment Repurchase of Net change in Cash dividend & June 30,1 2015 transaction operating shares to expendit
Slide 15: Payment of Principal Due by Period
Payment of Principal Due by Period The average interest rate for the total debt is 6.07% Q1-2015 Q2-2015 Q3-2015 Q4-2015 Year 2015 Long-term non-recourse debt & limited recourse debt 0 0 4,499 4,498 8,997 Senior Secured Notes (non-recourse) due 2020 0 0 2,111 15,849 17,960 Long-term loans (full reco
Slide 16: Financing Update
Financing Update • Repurchased certain portion of OFC senior secured for $30.6 million • The repurchased will save approx. $2.5 million of annual interest expense over the next 3 years • Closed $42 million loan agreement to refinance the Amatitlan power plant in Guatemala • 12 years limited-recourse
Slide 17: Operations & Business Updates
Operations & Business Updates Isaac Angel, CEO Green energy you can rely on Copyright © 2015 Ormat Technologies, Inc.
Slide 18: Operations Update
Operations Update Annual Generation (GWh) Quarterly Generation (GWh) 4.3 4.5 3.9 3.6 3.7 2.2 2.4 1.0 1.2 Q2 Q2 H1 H2 2010 2011 2012 2013 2014 2014 2015 2014 2015 18 Copyright © 2015 Ormat Technologies, Inc.
Slide 19: Construction Updates
Construction Updates • Don A. Campbell phase 2, Nevada Don A. Campbell phase 2, Nevada • Signed 20-year PPA with SCPPA • 19 MW expected by the end of 2015 • Plant 4, Olkaria III, Kenya • 24 MW expected in H2 2016 • Sarulla, phase 1, Indonesia • 14 MW expected in H2 2016 • Above listed and additional
Slide 20: CapEx Needs for the Remainder of 2015
CapEx Needs for the Remainder of 2015 As of June 30, 2015 Capital Needs ($ millions) 50 Construction & enhancements 20 Development & exploration 8 Maintenance CapEx 1 Production facility & other $79 Total CapEx $37 Debt repayment $116 Total 20 Copyright © 2015 Ormat Technologies, Inc.
Slide 21: Product Segment
Product Segment • Signed $98.8 million EPC contract for a geothermal project in Chile • Backlog of $347.5 million as of August 3, 2015 • Includes revenue for the period between July 1 and August 3, 2015 • Revenue is expected to be recognized in the years 2015-2017 21 Copyright © 2015 Ormat Technolog
Slide 22: Regulatory Updates
Regulatory Updates Continued support for renewables & geothermal • August 3, 2015 - President Obama announced the U.S. Environmental Protection Agency’s final Clean Power Plan • The plan will cut U.S. carbon pollution from the power sector by 870 million tons, or 32 percent below 2005 levels, in 203
Slide 23: Reiterating 2015 Guidance
Reiterating 2015 Guidance • Revenue • Electricity Segment - between $380 and $390 million • Product Segment - between $180 and $190 million • Total: between $560 and $580 million • Adjusted EBITDA • Between $280 and $290 million 23 Copyright © 2015 Ormat Technologies, Inc.
Slide 24: 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