A 66% increase in geothermal product sales boosted the results of Ormat Industries Ltd. (TASE: ORMT), which today published its financial report for the third quarter of 2009. Revenue rose 26% to $128.9 million for the third quarter from $102.3 million for the corresponding quarter of 2008.
Product sector sales rose to $51.1 million for the third quarter from $30.9 million for the corresponding quarter, but electricity sector revenue was unchanged at $71.4 million.
Ormat's net profit attributable to shareholders rose 239% to $16 million for the third quarter from $4.7 million for the corresponding quarter, while net profit rose 128% to $26.7 million from $11.7 million.
Ormat has two core geothermal businesses: the sale of equipment for geothermal power plants and building them for customers; and electricity sales from geothermal power plants that it owns, which has generated a steady cash flow for years. Nearly 60% of the company's third quarter revenue came from electricity sales, and almost all the rest from product sales. Revenue from Southern California Edison Company accounted for 44.7% of Ormat's electricity sales and 24.7% of its total revenue for the third quarter.
Most of Ormat's growth came from its US subsidiary Ormat Technologies Inc. (NYSE: ORA) and three of its large geothermal projects: Blue Mountain in Nevada, Centennial in New Zealand, and Las Pailas in Costa Rica. Although electricity segment revenue was unchanged, Ormat increased its electricity production in the US 18.6% to 823,700 megawatts in the third quarter from 694,700 megawatts in the corresponding quarter, most from new power plants that came on line during the third quarter. The increase in production was offset by a 15% drop in electricity rates to $87 per megawatt/hour during the third quarter, mostly at the company's Puna geothermal plant in Hawaii, because of the drop in the price of oil dragged down electricity prices in general.
Ormat CEO Yehudit Bronicki said, "We continue to give priority to long-term investments and we're moving forward in our exploratory activity by adding new land and financing reserves needed to achieve further growth.
Ormat Industries' share fell 0.3% in early trading today to NIS 32.15, giving a market cap of NIS 3.83 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on November 8, 2009
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