Ormat’s Continued Efficiency Yields Impressive Q2 Results

‘ second-quarter earnings demonstrate the strength of the company’s business model and underlying profitability, as highly efficient and productive new plants drove improvement in the electricity segment and the company’s dominance in lower-heat geothermal continued to produce strong results.

During the quarter, Ormat earned $0.41 per share excluding noncash derivative gains and the gain on the sale of the Momotombo power project. This is a significant improvement over year-ago earnings per share of $0.11. Adjusted EBITDA grew 37% during the quarter, to $69.7 million from $50.8 million in the prior-year period. Gross margins at both of Ormat’s segments improved in the quarter, driving an increase in consolidated margins to 33% from 30%.

Ormat updated revenue guidance for the year to $510 million-$530 million from $515 million-$535 million to reflect lost revenue from the Momotombo disposal. Our 2013 forecast excluding Momotombo remains $521 million, driving EBITDA of $195 million.

Electricity generation in the quarter increased nearly 13%, driven by two new power plants–Olkaria and McGinness Hills–where better-than-forecast realized capacity added 6 incremental megawatts and could provide some upside to our forward production forecasts if wells continue to be highly productive. Ormat’s power portfolio has been dealt its share of challenges in the past few years with operational problems and pricing pressure in California, but management has reaffirmed its operational savvy with a string of successful new-build projects. Ormat’s growth ramp remains strong in this segment, with both domestic and international projects under development.


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