Israeli geothermal energy company Ormat Technologies Inc. (NYSE: ORA; TASE: ORA) published its results for the fourth quarter of 2018 and the entire year yesterday after the end of trading on Wall Street. Ormat's fourth quarter revenue totaled $190.5 million, 14.5% more than in the fourth quarter of 2017.
Ormat is active in two main sectors: electricity and products. Revenue from electricity grew 8% to $138.3 million in the fourth quarter, while revenue from products rose 31% to $49.7 million.
Ormat's fourth quarter net profit was $18.2 million, $0.36 per share, compared with $64.6 million in the fourth quarter of 2017. Tax expenses totaling $31.4 million in the quarter, compared with $28.3 million in tax revenue in the corresponding quarter in 2017, detracted from the company's profit. Ormat also posted a one-time $13.5 million write-down from a loss of goodwill related to the acquisition of Viridity Energy Solutions. The company's adjusted (non-GAAP) fourth quarter profit amounted to $0.52 per share.
The average forecast by the analysts covering Ormat was $182 million in revenue and a non-GAAP profit of $0.57 per share, meaning that the company outperformed the average revenue forecast, but fell $0.05 per share short of the average profit forecast.
Ormat's 2018 results were affected by the shutdown of the Puna power station in Hawaii following a volcano eruption on the island. Ormat's revenue totaled $719.3 million in 2018, 3.8% more than in the preceding year. Revenue from electricity was up 9.5% to $510 million, while revenue from products declined 10.1% to $201.7 million. Other activities contributed $7.6 million to revenue, compared with $2.7 million in 2017. The company's net profit fell 26% to $98 million.
Ormat's board of directors announced a dividend of $0.11 per share when the reports were published.
Guidance provided by Ormat's management, led by CEO Isaac Angel, projects $720-742 million in revenue in 2019, considerably below the analysts' expectations of $770 million.
Ormat's share price responded to the results with a 2.5% drop on the TASE. The share price fell 7% over the past year, pushing the company's market cap down to NIS 10.2 billion.
On the publication of his company's results, Angel said, "For the trailing 12 months prior to the volcanic eruption, Puna generated $43.7 million in revenue and $26.7 million in EBITDA. Even absent these contributions, we are forecasting growth in our electricity segment and the pace of growth absent Puna and any related business interruption insurance proceeds outpaces the pace of growth reported in 2018, demonstrating our diversified business model. We are still pursuing the business interruption insurance proceeds we are entitled to receive in connection with our Puna facility and we anticipate receiving additional proceeds in 2019."
"We enter 2019 with a strong and growing backlog and a diversified pipeline of business opportunities in Turkey, New Zealand, the US, the Philippines and China," Angel added. "Our energy storage activity is progressing under new leadership, albeit at a slower pace than we anticipated, and we are continuing efforts to build a solid pipeline of opportunities. With regards to Puna, work is underway to resume operation of the plant… we currently estimate that we will be ready for operation by year-end 2019."
Published by Globes, Israel business news - en.globes.co.il - on February 27, 2019
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