Ormat's profits, revenues grow in Q1 2017

The Sarulla Geothermal Power Plant. Source: Toshiba Corp

Nevada-based geothermal energy firm Ormat Technologies Inc (NYSE:ORA) saw its first-quarter (Q1) 2017 net profit grow by 20.6% year-on-year to USD 35.3 (EUR 32.3m) after it booked significantly higher product revenues.

The products segment revenue rose by 69.5% to USD 74.1 million thanks to progress in projects in New Zealand, China and Turkey. Some timing issues related to deliveries have resulted in a lower gross margin, which is expected to remain at similar level throughout the year.

The board of directors has approved a quarterly dividend of USD 0.08 per share to be paid on May 31 to shareholders of record as of May 22. The company said it expects to pay similar dividends in the third and fourth quarters of the year.

Details on Ormat’s Q1 performance and its guidance for the full year are available in the table.

All in USD million	Q1 2017	Q1 2016	2017 forecast
Total revenues	189.9	151.6	680 - 700
- of which electricity segment revenues	115.8	107.9	460 - 470
- of which product segment revenues	74.1	43.7	220 - 230
Gross margin (in %)	39.2	42.1	N/A
Operating income	59.5	50.5	N/A
Net income to shareholders	35.3	29.3	N/A
Adjusted EBITDA	91.8	80.2	340 - 350

Electricity generation in the period was up 2.2% to 1.428 million MWh. In March it was announced that the first unit of the 320.8-MW Sarulla geothermal power plant in Indonesia’s North Sumatra province has commenced commercial operation.

As reported last week, Japanese financial services conglomerate Orix Corp (TYO:8591) has agreed to buy a 22.1% stake in Ormat for about USD 627 million. The two companies have also entered into a commercial cooperation agreement under which Ormat will get exclusive rights to develop, own, operate and provide equipment for Orix geothermal projects outside of Japan.

(USD 1 = EUR 0.92)

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