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Ormat Technologies Reports Second Quarter 2023 Financial Results





RENO, Nev., Aug. 02, 2023 (GLOBE NEWSWIRE) -- Ormat Technologies, Inc. (NYSE: ORA), a leading renewable energy company, today announced financial results for the second quarter ended June 30, 2023.


 Q2 2023Q2 2022Change (%)H1 2023H1 2022Change (%)
GAAP Measures      
Revenues ($ millions)      
Electricity155.3 151.2 2.7%325.6 313.7 3.8%
Product33.5 10.4 222.0%43.5 25.0 73.9%
Energy Storage6.0 7.5 (19.7)%10.9 14.1 (22.5)%
Total Revenues194.8 169.1 15.2%380.0 352.8 7.7%
Gross margin (%)      
Electricity29.6%36.8% 37.3%39.4% 
Product10.4%0.2% 9.6%4.2% 
Energy Storage1.9%25.3% (0.5)%19.8% 
Gross margin (%)25.4%34.1% 33.0%36.1% 
Operating income ($ millions)24.2 38.6 (37.3)%77.4 83.7 (7.5)%
Net income attributable to the Company’s stockholders24.2 11.3 114.8%53.2 29.7 79.3%
Diluted EPS ($)0.40 0.20 100%0.90 0.53 69.8%
Non-GAAP Measures1      
Adjusted Net income attributable to the Company’s stockholders24.2 12.2 98.9%53.2 32.0 66.4%
Adjusted Diluted EPS ($)0.40 0.22 80.4%0.90 0.57 57.7%
Adjusted EBITDA1 ($ millions)100.9 100.7 0.2%224.4 208.5 7.6%

“We are pleased to announce another solid quarter marked by 15.2% revenue growth and 114.8% increase in net income year-over-year,” said Doron Blachar, Ormat’s Chief Executive Officer. “During the second quarter, we made significant progress in expanding our operations across our segments, adding approximately 100 MW of total capacity in geothermal, solar, and storage assets throughout the quarter. Additionally, we are encouraged by the initial outcome of our recent drilling campaigns in Olkaria and Puna and we are expecting an increase in generation by year-end at both power plants. Our Products segment has displayed a notable recovery in revenues, reflecting our ability to deliver into positive market trends.”

Blachar continued, "In the Electricity segment, we successfully commenced construction of a 50MW geothermal project in New Zealand, in addition to the 10MW expansion of our Bouillant power plant in Guadeloupe following significant progress in PPA discussions. In our Storage segment, we started construction on three battery storage facilities, the 35MW/140MWh Arrowleaf project in California and two projects in Texas with a combined capacity of 120MW/240MWh. Each of these projects are expected to be operational by the end of 2025, allowing us to take advantage of the recent decline in battery prices. Given the momentum of these successful expansion efforts, we are excited to increase our year-end 2025 growth target from an initial range of 1.8 GW- 1.86 GW to 1.9 GW - 2.0 GW.”

“Looking ahead, we are witnessing increasing demand globally for geothermal energy, but specifically in the US where PPA prices continue to rise. Ormat is well-positioned to capture the growth opportunities in the renewable energy sector, and the strategic actions we have taken will continue to strengthen our position," stated Blachar. “As we move into the second half of the year, we anticipate further value accretion from the provisions of the Inflation Reduction Act (IRA), especially through ITCs and PTCs. These associated tax credits will drive net income and earnings growth going forward.”


  • Net income attributable to the Company's stockholders and diluted EPS for the second quarter of 2023 increased 114.8% and 100%, respectively, versus the prior year period. The increase in EPS was driven by higher revenues in the Electricity and Product segments, as well as higher benefits within the IRA including PTC benefits recorded under Income attributable to sale of tax benefits and ITC benefits recorded under income tax provision.
  • Adjusted EBITDA for the second quarter of 2023 was $100.9 million, compared to $100.7 million in 2022, supported by revenue growth in the Electricity and Product segments and improved Product segment margins, offset by lower margins in the Electricity segment due to lower pricing and lower generation at Puna.
  • Electricity segment revenues increased 2.7% for the second quarter of 2023, compared to 2022, driven by focused execution against our strategic plan, supported by the addition of the North Valley and the upgrade of Dixie Valley, offset by lower generation and lower prices at the Puna power plant.
  • Gross margin in the Electricity segment decreased from 36.8% to 29.6% primarily due to a $5.4 million reduction in Puna’s revenues as well as a $3.4 million of BI insurance proceeds received in Q2 2022 related to the Heber 1 fire event with no associated revenues.
  • Product segment revenues increased 222.0% for the second quarter of 2023, compared to 2022, supported by a higher backlog and timing of recognized revenues.
  • Product segment backlog stands at approximately $120.0 million as of August 02, 2023.
  • Energy Storage segment revenues decreased by 19.7% for the second quarter of 2023, compared to 2022, primarily due to lower energy rates at the PJM compared to the strong commodity price-driven rates in last year’s second quarter. The majority of the assets added during the quarter started commercial operation toward the end of the quarter and are expected to increase their contribution in the second half of the year.
  • Income attributable to sale of tax benefits increased by 57.2% quarter over quarter due to $2.7 million of transferable PTCs recorded related to the new geothermal projects operated in the second quarter 2023 and $2.7 million mainly related to the CD4 tax equity transaction. 
  • In addition, the Company:
    • Signed an agreement with Eastland Generation Limited (EGL) to build a 50MW power plant in New Zealand. Under the terms of the agreement, the Company will design, build, commission and own the power plant. EGL will operate and maintain the power plant under a separate services arrangement and also purchase 100% of the plant’s generation under a fixed price Power Purchase Agreement (PPA).
    • Commenced commercial operations at four battery storage facilities for 62MW/62MWh of combined capacity, with these projects becoming eligible for ITCs which will allow the Company to reduce its income taxes and significantly improve the economics of these projects.
    • Completed a 6MW upgrade of the Dixie Valley and the 25MW North Valley project in Nevada.
    • Subsequent to quarter end:
      • The Company and San Diego Community Power (SDCP) signed an agreement for the Arrowleaf Solar and Storage facility to bring clean and renewable energy to the nearly 1 million customers of SDCP.
      • Commenced commercial operation of the 20MW/40MWh Pomona 2 storage facility in California.


  • Total revenues of between $823.0 million and $858.0 million.
  • Electricity segment revenues between $670.0 million and $685.0 million.
  • Product segment revenues of between $120.0 million and $135.0 million.
  • Energy Storage revenues of between $33.0 million and $38.0 million.
  • Adjusted EBITDA to be between $480.0 million and $510.0 million.
  • Adjusted EBITDA attributable to minority interest of approximately $31.0 million.

The Company provides a reconciliation of Adjusted EBITDA, a non-GAAP financial measure for the three and six months ended June 30, 2023, and 2022. However, the Company does not provide guidance on net income and is unable to provide a reconciliation for its Adjusted EBITDA guidance range to net income without unreasonable efforts, due to high variability and complexity with respect to estimating certain forward-looking amounts. These include impairments and disposition and acquisition of business interests, income tax expense, and other non-cash expenses and adjusting items that are excluded from the calculation of Adjusted EBITDA.


On August 2, 2023, the Company’s Board of Directors declared, approved, and authorized payment of a quarterly dividend of $0.12 per share pursuant to the Company’s dividend policy. The dividend will be paid on August 30, 2023, to stockholders of record as of the close of business on August 16, 2023. In addition, the Company expects to pay a quarterly dividend of $0.12 per share in the next quarter.


Ormat will host a conference call to discuss its financial results and other matters discussed in this press release on Thursday, August 3, 2023, at 10:00 a.m. ET.

Participants within the United States and Canada, please dial 1-888-770-2286, approximately 15 minutes prior to the scheduled start of the call. If you are calling outside of the United States and Canada, please dial +1-646-960-0440. Access code for the call is 9122486. Please request the “Ormat Technologies, Inc. call” when prompted by the conference call operator. The conference call will also be accompanied by a webcast live on the Investor Relations section of the Company's website.

A replay will be available one hour after the end of the conference call. To access the replay within the United States and Canada, please dial 1-800-770-2030. From outside of the United States and Canada, please dial +1-647-362-9199. Please use the replay access code 9122486. The webcast will also be archived on the Investor Relations section of the Company's website.


With over five decades of experience, Ormat Technologies, Inc. is a leading geothermal company and the only vertically integrated company engaged in geothermal and recovered energy generation (“REG”), with robust plans to accelerate long-term growth in the energy storage market and to establish a leading position in the U.S. energy storage market. The Company owns, operates, designs, manufactures and sells geothermal and REG power plants primarily based on the Ormat Energy Converter – a power generation unit that converts low-, medium- and high-temperature heat into electricity. The Company has engineered, manufactured and constructed power plants, which it currently owns or has installed for utilities and developers worldwide, totaling approximately 3,200 MW of gross capacity. Ormat leveraged its core capabilities in the geothermal and REG industries and its global presence to expand the Company’s activity into energy storage services, solar Photovoltaic (PV) and energy storage plus Solar PV. Ormat’s current total generating portfolio is 1,277 MW with a 1,107 MW geothermal and solar generation portfolio that is spread globally in the U.S., Kenya, Guatemala, Indonesia, Honduras, and Guadeloupe, and a 170 MW energy storage portfolio that is located in the U.S.


Information provided in this press release 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. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that we expect or anticipate will or may occur in the future, including such matters as our projections of annual revenues, expenses and debt service coverage with respect to our debt securities, future capital expenditures, business strategy, competitive strengths, goals, development or operation of generation assets, market and industry developments and the growth of our business and operations, are forward-looking statements. When used in this press release, the words “may”, “will”, “could”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “projects”, “potential”, or “contemplate” or the negative of these terms or other comparable terminology are intended to identify forward-looking statements, although not all forward-looking statements contain such words or expressions. These forward-looking statements generally relate to Ormat's plans, objectives and expectations for future operations and are based upon its management's current estimates and projections of future results or trends. Although we believe that our plans and objectives reflected in or suggested by these forward-looking statements are reasonable, we may not achieve these plans or objectives.  Actual future results may differ materially from those projected as a result of certain risks and uncertainties and other risks described under "Risk Factors" as described in Ormat’s annual report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 24, 2023, and in Ormat’s subsequent quarterly reports on Form 10-Q that are filed from time to time with the SEC.

These forward-looking statements are made only as of the date hereof, and, except as legally required, we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

Ormat Technologies Contact:
Smadar Lavi
VP Head of IR and ESG Planning & Reporting
775-356-9029 (ext. 65726)
 Investor Relations Agency Contact:
Alec Steinberg or Joseph Caminiti
Alpha IR Group

Condensed Consolidated Statement of Operations
For the Three and Six-Month periods Ended June 30, 2023, and 2022

 Three Months Ended June 30,Six Months Ended June 30,
 (Dollars in thousands, except per share data)
Electricity155,324 151,195 325,634 313,720 
Product33,458 10,392 43,500 25,020 
Energy storage 6,014 7,491 10,894 14,048 
Total revenues194,796 169,078 380,028 352,788 
Cost of revenues:    
Electricity109,424 95,517 204,182 190,038 
Product29,985 10,367 39,336 23,980 
Energy storage 5,897 5,593 10,951 11,264 
Total cost of revenues145,306 111,477 254,469 225,282 
Gross profit49,490 57,601 125,559 127,506 
Operating expenses:    
Research and development expenses2,083 1,388 3,371 2,452 
Selling and marketing expenses5,369 3,952 9,317 8,317 
General and administrative expenses17,814 13,526 35,481 31,098 
Impairment charge 128  1,954 
Operating income24,224 38,607 77,390 83,685 
Other income (expense):    
Interest income4,942 179 6,793 521 
Interest expense, net(24,393)(20,418)(48,024)(41,499)
Derivatives and foreign currency transaction gains (losses)(1,272)(3,998)(3,209)(3,738)
Income attributable to sale of tax benefits14,979 9,527 27,545 17,232 
Other non-operating income (expense), net79 (1,260)139 (1,185)
Income from operations before income tax and equity in earnings (losses) of investees18,559 22,637 60,634 55,016 
Income tax (provision) benefit3,956 (6,130)(4,929)(16,293)
Equity in earnings (losses) of investees, net1,996 (1,562)2,267 (985)
Net income24,511 14,945 57,972 37,738 
Net income attributable to noncontrolling interest(320)(3,685)(4,752)(8,048)
Net income attributable to the Company's stockholders24,191 11,260 53,220 29,690 
Earnings per share attributable to the Company's stockholders:    
Basic:0.40 0.20 0.91 0.53 
Diluted:0.40 0.20 0.90 0.53 
Weighted average number of shares used in computation of earnings per share attributable to the Company's stockholders:    
Basic.60,245 56,114 58,494 56,089 
Diluted60,634 56,498 58,901 56,431 

Condensed Consolidated Balance Sheet
For the Periods Ended June 30, 2023, and December 31, 2022

 June 30, 2023 December 31, 2022
Current assets:   
Cash and cash equivalents275,066  95,872 
Restricted cash and cash equivalents 120,316  130,804 
Trade 148,060  128,818 
Other.35,525  32,415 
Inventories37,900  22,832 
Costs and estimated earnings in excess of billings on uncompleted contracts21,786  16,405 
Prepaid expenses and other47,328  29,571 
Total current assets.685,981  456,717 
Investment in unconsolidated companies126,451  115,693 
Deposits and other41,991  39,762 
Deferred income taxes166,477  161,365 
Property, plant and equipment, net2,836,003  2,493,457 
Construction-in-process 714,850  893,198 
Operating leases right of use 23,223  23,411 
Finance leases right of use 4,365  3,806 
Intangible assets, net320,847  333,845 
Goodwill.90,456  90,325 
Total assets.5,010,644  4,611,579 
Current liabilities:   
Accounts payable and accrued expenses.174,715  149,423 
Billings in excess of costs and estimated earnings on uncompleted contracts18,651  8,785 
Current portion of long-term debt:   
Limited and non-recourse (primarily related to VIEs):59,938  64,044 
Full recourse110,070  101,460 
Financing Liability.15,454  16,270 
Operating lease liabilities.2,703  2,347 
Finance lease liabilities.1,678  1,581 
Total current liabilities.383,209  343,910 
Long-term debt, net of current portion:   
Limited and non-recourse:484,078  521,885 
Full recourse:691,934  676,512 
Convertible senior notes421,957  420,805 
Financing liability220,603  225,759 
Operating lease liabilities.19,748  19,788 
Finance lease liabilities.2,881  2,262 
Liability associated with sale of tax benefits.150,212  166,259 
Deferred income taxes74,655  83,465 
Liability for unrecognized tax benefits.6,684  6,559 
Liabilities for severance pay.12,083  12,833 
Asset retirement obligation102,190  97,660 
Other long-term liabilities.23,360  3,317 
Total liabilities.2,593,594  2,581,014 
Commitments and contingencies   
Redeemable noncontrolling interest10,008  9,590 
The Company's stockholders' equity:   
Common stock60  56 
Additional paid-in capital.1,609,298  1,259,072 
Treasury stock, at cost (17,964) (17,964)
Retained earnings663,166  623,907 
Accumulated other comprehensive income (loss).(170) 2,500 
Total stockholders' equity attributable to Company's stockholders.2,254,390  1,867,571 
Noncontrolling interest152,652  153,404 
Total equity2,407,042  2,020,975 
Total liabilities, redeemable noncontrolling interest and equity5,010,644  4,611,579 

Reconciliation of EBITDA and Adjusted EBITDA
For the Three- and Six-Month Periods Ended June 30, 2023, and 2022

We calculate EBITDA as net income before interest, taxes, depreciation, amortization and accretion. We calculate Adjusted EBITDA as net income before interest, taxes, depreciation, amortization and accretion, adjusted for (i) mark-to-market gains or losses from accounting for derivatives, (ii) stock-based compensation, (iii) merger and acquisition transaction costs, (iv) gain or loss from extinguishment of liabilities, (v) cost related to a settlement agreement, (vi) non-cash impairment charges; (vii) write-off of unsuccessful exploration activities; and (viii) other unusual or non-recurring items. We adjust for these factors as they may be non-cash, unusual in nature and/or are not factors used by management for evaluating operating performance. We believe that presentation of these measures will enhance an investor’s ability to evaluate our financial and operating performance. EBITDA and Adjusted EBITDA are not measurements of financial performance or liquidity under accounting principles generally accepted in the United States, or U.S. GAAP, and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net earnings as indicators of our operating performance or any other measures of performance derived in accordance with U.S. GAAP. Our Board of Directors and senior management use EBITDA and Adjusted EBITDA to evaluate our financial performance. However, other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do.

Starting in the fourth quarter of 2022, we include accretion expenses related to asset retirement obligation in the adjustments to net income when calculating EBITDA and adjusted EBITDA. The presentation of EBITDA and adjusted EBITDA includes accretion expenses for the three and six months ended June 30, 2023, however, the prior year has not been recast to include accretion expenses as the amounts were immaterial. 

The following table reconciles net income to EBITDA and Adjusted EBITDA for the three-and-six-month periods ended June 30, 2023, and 2022:

 Three Months Ended June 30, Six Months ended June 30, 2022
 2023 2022 2023 2022
 (Dollars in thousands) (Dollars in thousands)
Net income   24,511  14,945 57,972 37,738
Adjusted for:       
Interest expense, net (including amortization of deferred financing costs)19,451  20,239 41,231 40,978
Income tax provision (benefit) (3,956) 6,130 4,929 16,293
Adjustment to investment in an unconsolidated company: our proportionate share in interest expense, tax and depreciation and amortization in Sarulla and Ijen  4,050  4,167 7,032 6,291
Depreciation and amortization   52,939  47,334 105,335 94,103
EBITDA   96,995  92,815 216,499 195,403
Mark-to-market gains or losses from accounting for derivative(402) 3,634 591 3,911
Stock-based compensation4,311  2,999 7,301 5,813
Make-whole premium related to long-term debt prepayment  1,102  1,102
Write-off related to Storage projects and activity  128  1,953
Allowance for bad debt    115
Merger and acquisition transaction costs    249
Adjusted EBITDA100,904  100,678 224,391 208,546

Reconciliation of Adjusted Net Income attributable to the Company's stockholders and Adjusted EPS
For the Three and Six-month Periods Ended June 30, 2023, and 2022

Adjusted Net Income attributable to the Company’s stockholders and Adjusted EPS are adjusted for one-time expense items that are not representative of our ongoing business and operations. The use of Adjusted Net income attributable to the Company’s stockholders and Adjusted EPS is intended to enhance the usefulness of our financial information by providing measures to assess the overall performance of our ongoing business.

The following tables reconciles Net income attributable to the Company’s stockholders and Adjusted EPS for the three-month periods ended June 30, 2023, and 2022.

  Three Months Ended June 30,   Six Months Ended June 30,
 2023 2022 2023 2022
(in millions, except for EPS)       
GAAP Net income attributable to the Company's stockholders$24.2 $11.3 $53.2 $29.7
Write-off of Energy Storage projects and assets   0.1    1.5
Make-whole premium related to repayment of long-term debt   0.8    0.8
Adjusted Net income attributable to the Company's stockholders$24.2 $12.2 $53.2 $32.0
GAAP diluted EPS 0.40  0.20  0.90  0.53
Write-off of Energy Storage projects and assets   0.0    0.03
Make-whole premium related to repayment of long-term debt   0.02    0.01
Adjusted Diluted EPS 0.40  0.22  0.90  0.57


1 Reconciliation is set forth below in this release.

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