Ormat Technologies, Inc. · NYSE:ORA
Ormat Technologies — Q2 2014 Earnings Presentation
25 slides from Ormat Technologies's earnings presentation, Aug 6, 2014
Slide 1: Second Quarter 2014 Earnings Call
Ormat Technologies, Inc. Second Quarter 2014 Earnings Call August 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 Second 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: Highlights
Highlights Quarterly financial and operational highlights: • Quarterly revenues amounted to $127.6 million, a 16.4% decrease from the second quarter of 2013 as a result of an expected reduction in Product Segment revenues. For the first six months of 2014, total revenues decreased slightly from the
Slide 5: Total Generation (GWh)
Total Generation(GWh) Annual Quarterly 4,253 3,943 3,560 3,682 3,110 2,107 2,245 1,067 1,043 2009 2010 2011 2012 2013 Q2 2013 Q2 2014 H1 2013 H1 2014 5 Copyright © 2014 Ormat Technologies, Inc.
Slide 6: Projects Update
Projects Update • 30 MW McGinness Hills Phase 2, Nevada - expected on line by Q1 2015 • Mammoth G3 - refurbishment to be completed by 2015 • Sarulla - released for construction following financing closing • Heber 1 - assessing refurbishment results • 35 prospects in various stages of exploration, or
Slide 7: Product Segment
Product Segment • Approximately $376.0 million backlog as of July 31, 2014 • The backlog includes: • Revenues for the period between July 1 and July 31, 2014 • $254 million supply contract signed for the 330 MW Sarulla project in Indonesia • New contracts signed during the second quarter 7 Copyright
Slide 8: CapEx Needs & Sources for the Balance of 2014
CapEx Needs & Sources for the Balance of 2014 As of the end of June 30, 2014 Capital Needs ($ millions) Sources of Capital ($ millions) 62 Construction & Enhancements1 80.1 Cash and cash equivalents 20 Development of new projects 168.4 Unused corporate lines of credit 18 Exploration activities 248.5
Slide 9: Financial Results
Financial Results Doron Blachar, CFO Green energy you can rely on 9 Copyright © 2014 Ormat Technologies, Inc.
Slide 10: Total Revenues
Total Revenues Total Revenues Total Cost of Revenues Segment Contribution -25.1 million (16.4%) -14.7 million (14.3 %) 152.7 28% 127.6 43% 102.3 57% 72% 87.6 Q2 2013 Q2 2014 Q2 2013 Q2 2014 Q2 2013 Q2 2014 Electricity Segment Product Segment All amounts in million USD 10 Copyright © 2014 Ormat Techn
Slide 11: Electricity Segment
Electricity Segment Revenues Cost of Revenues +4.0 million (4.5%) +8.7 million (14.8%) 9.0 3.9 $91.7 1.1 $87.7 67.3 58.6 Q2 2013 Contribution of Net decrease in Reduction in Q2 2014 Q2 2013 Q2 2014 Olkaria and DAC gain on derivative generation contracts • Average revenue rate was $88 per MWh in Q2 2
Slide 12: Product Segment
Product Segment Revenues Cost of Revenues -29.1 million (44.7%) -23.3 million (53.4%) 65.0 43.7 35.9 20.3 Q2 2013 Q2 2014 Q2 2013 Q2 2014 Decrease primarily due to: Decrease primarily due to: • Timing of revenue recognition, timing of release of • Decrease in revenues the notice to proceed of certai
Slide 13: Gross Margin
Gross Margin Combined 34.6% 33.0% 31.3% 28.4% Q2 2013 Q2 2014 H1 2013 H1 2014 13 Copyright © 2014 Ormat Technologies, Inc.
Slide 14: Gross Margin by Segment
Gross Margin Electricity Segment Product Segment 43.4% 37.4% 33.1% 33.3% 32.8% 30.2% 26.6% 27.1% Q2 2013 Q2 2014 H1 2013 H1 2014 Q2 2013 Q2 2014 H1 2013 H1 2014 14 Copyright © 2014 Ormat Technologies, Inc.
Slide 15: Operating Income
Operating Income Total Electricity Segment Product Segment 37.9 22.3 22.6 15.2 12.8 9.5 Q2 2013 Q2 2014 Q2 2013 Q2 2014 Q2 2013 Q2 2014 The decrease was principally due to: • Decrease in gross margin in both Electricity and Product segments which resulted primarily from the increase in electricity c
Slide 16: Interest Expense, Net
Interest Expense, Net Interest Expense, Net +4.6 million (26.1%) Gross Interest Expense Capitalized Interest 22.1 22.5 19.2 17.5 1.7 0.4 Q2 2013 Q2 2014 Q2 2013 Q2 2014 Q2 2013 Q2 2014 Increase was primarily due to • Increase in interest expense related to new loan received from OPIC • The conversio
Slide 17: 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 $30.7 $25.2 $20.1 $0.67 $0.55 $0.44 $9.1 $0.20 Q2 2013 Q2 2014 H1 2013 H1 2014 Q2 2013 Q2 2014 H1 2013 H1 2014 The decrease was mainly due to: • $12.1 million decrease
Slide 18: Adjusted EBITDA
Adjusted EBITDA Total Electricity Segment Product Segment 130.3 115.5 104.7 85.3 69.7 59.7 51.4 46.0 30.2 25.6 18.3 13.8 Q2 Q2 H1 H1 Q2 Q2 H1 H1 Q2 Q2 H1 H1 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 Q2-13 Q2-14 H1-13 H1-14 Q2-13 Q2-14 H1-13 H1-14 Q2-13 Q2-14 H1-13 H1-14 D&A 20.9 23
Slide 19: Cash, Cash Equivalents and Short-Term Bank Deposit
Cash, Cash Equivalents and Short-Term Bank Deposit 89.1 103.6 41.1 35.3 12.9 10.4 2.7 80.1 27.4 57.4 12.6 - - - - - - - - - Dec. 31 2013 net proceeds Cash grant from Proceeds from Cash from Capital Repayment of Repurchase Cash to OPC & Other1 June 30, 2014 under our the U.S. Heber Solar sale operati
Slide 20: Payment of Principal Due by Period
Payment of Principal Due by Period The annual average interest rate for the total debt is 6.0% Q3-2014 Q4-2014 Year 2014 Long-term non-recourse debt & limited recourse debt 5,272 5,291 10,563 Senior Secured Notes (non-recourse) due 2020 1,165 15,513 16,678 Long-term loans (full recourse) 3,519 10,94
Slide 21: Financing Updates
Financing Updates • Sarulla consortium closed $1.17 billion financing for the world largest 330 MW geothermal power plan • Japan Bank for International Cooperation (JBIC) • Asian Development Bank (ADB) • Expect to finance the McGinness phase II project • Construction loan and term loan under the OFC
Slide 22: Business & Operations Update
Business & Operations Update Isaac Angel, CEO Green energy you can rely on Copyright © 2014 Ormat Technologies, Inc.
Slide 23: Revenues Guidance for 2014
Revenues Guidance for 2014 • Electricity Segment - between $370 and $380 million • Product Segment - between $170 and $180 million • Including $36 million revenues from the Sarulla project • Total: between $540 and $560 million 23 Copyright © 2014 Ormat Technologies, Inc.
Slide 24: Regulatory Updates
Regulatory Updates • Continues supportive legislation to renewable and geothermal • June 2014 the EPA, under President Obama's Climate Action Plan, released the Clean Power Plan (CPP) proposal to cut carbon pollution from existing power plants in the United States • The goals of the proposed program
Slide 25: Reconciliation of Adjusted EBITDA and Additional Cash Flows Information
Reconciliation of Adjusted EBITDA and Additional Cash Flows Information Reconciliation of EBITDA, Adjusted EBITDA and Additional Cash Flows Information For the six and three-month periods ended June 30, 2014 and 2013(Unaudited). We calculate EBITDA as net income before interest, taxes, depreciation