ORMAT TECHNOLOGIES, INC. Q4 FY2024 earnings call

2024 was a successful year for Ormat with strong operational and financial performance. In the Electricity segment, the acquisition of Enel assets significantly boosted revenues and EBITDA, and new PPAs were secured. The Storage segment brought three new facilities online, including the large Bozident project, and moved towards more consistent profitability. The Product segment recovered its top-line, improved profitability, and achieved an all-time high backlog with a $210 million contract in New Zealand. Additionally, over $500 million in corporate and finance debt was raised, and significant tax benefits were received.

In 2024, total revenues amounted to $879.7 million, representing a 6.1% year-over-year increase. For the full year, the Electricity segment generated revenue of $702.3 million, marking a 5.3% growth and contributing 89% of the total consolidated adjusted EBITDA. The Product segment had a full-year revenue of $139.7 million, a 4.4% increase, accounting for 6% of the total adjusted EBITDA. The Energy Storage segment's full-year revenue was $37.7 million, a 30.6% rise, making up 5% of the total adjusted EBITDA. In the fourth quarter, the Electricity segment's revenue was $180.1 million, a 2.1% decline; the Product segment's revenue was $39.6 million, a 21.4% drop; and the Energy Storage segment's revenue was $37.7 million, a 56.7% increase.

Ormat anticipates total revenues in 2025 to range between $935 million and $975 million, representing a 9% year-over-year increase at the midpoint. Electricity segment revenues are projected to be between $710 million and $725 million, Product segment revenues between $172 million and $187 million, and Energy Storage revenues between $53 million and $63 million. Adjusted EBITDA is expected to be between $563 million and $593 million, with an approximate 5% increase at the midpoint.

Risks include fluid policy situations in the US affecting geothermal and storage project eligibility, curtailments in the US due to transmission issues and wildfires, and potential impacts of tariffs on the Energy Storage segment's supply chain from China.

Q: Just how we should think about the electricity generation expectations for the Electricity segment in the portfolio embedded in the '25 guide?

A: I think you got it exactly right. We didn't have any too many projects coming online at the end of '24 beginning of '25. We do see on the enhancement, the drag rate for the Enel project coming on for the end of the year and we said we do see some more curtailments in the U.S. than what we've seen in the past. So, all in all, this year as presented in the guidance, we see similar generation maybe uptick. And '26, the impact will be basically following the power plants coming online towards the end of the year '26 and all the projects that we've listed that will come on June ‘26 is the worst.

Q: You had mentioned that, you have safe harbored, all the geothermal projects with CODs through 2028. I was wondering, if you could share how many megawatts that includes.

A: As you can see from our deck between now and 2028, we need to add close to 400 megawatts of solar and geothermal. And when you look at the named project, there is much less than that, which means that all the drilling that Doron just spoke about a few minutes ago that should enable us to add somewhere around 250 megawatts between 2027 and 2028, when you talk about geothermal, we safe harbor many projects that are not on the list. Everything that we're doing co-holds already or full size wells, we also did that and we're also doing it through a sale of equipment. On the Storage side, we are also, as we speak today, looking to get four more projects in addition to what you see on the list in Texas and California and we already safe harbor two more projects that are not on the list. So there will be at least six more projects that are not on the list that will be Safe Harbor in the next already harbored in the next few months. And we will do it also through a start of construction. We will look through 2025 what else can we do in order to secure additional 2029 project. That's our goal.