Ormat Technologies(US:ORA)2024-02-22 20:45Financial Data and Key Metrics Changes - For Q4 2023, net income attributable to stockholders was $35.7 million or $0.59 per diluted share, compared to $18 million or $0.32 per diluted share in the same quarter last year, representing a significant increase [26][20] - Total revenues for 2023 were $829.4 million, up 13% year-over-year, with Q4 revenue at $241.3 million, marking a 17.4% growth year-over-year [55][53] - Adjusted EBITDA for the full year 2023 was $481.7 million, a 10.6% increase compared to $435.5 million in 2022, with Q4 adjusted EBITDA at $139 million, up 11.5% from the previous year [55][53] Business Segment Data and Key Metrics Changes - Electricity segment revenue increased by 5.5% to $667 million for the full year and by 11.3% to $184 million in Q4 2023, driven by new projects coming online [6][55] - Product segment revenue grew by 87.3% to $133.8 million for the full year and by 56.7% to $50.4 million in Q4 2023, primarily due to new contracts and higher backlog [27][18] - Energy storage segment revenue decreased by 6.8% to $28.9 million for the full year and by 14% to $7 million in Q4 2023, attributed to lower merchant rates [57][55] Market Data and Key Metrics Changes - The company’s total generating capacity, including recently acquired assets, stands at 1,215 megawatts, a 13.6% increase from 1,070 megawatts in 2022 [35] - The backlog for the product segment is $152 million, with significant contracts signed in 2023, including a $95 million geothermal contract in New Zealand [37][18] Company Strategy and Development Direction - The company aims to increase total electricity portfolio generation to between 1,450 and 1,470 megawatts by the end of 2026, and energy storage capacity to between 700 to 800 megawatts or 1.9 to 2.3 gigawatt-hours [13][38] - The acquisition of Enel Green Power assets is expected to be immediately accretive to revenue and EBITDA, with plans for operational enhancements [4][8] - The company continues to focus on renewable energy growth, supported by the Inflation Reduction Act, which is expected to create opportunities for new Power Purchase Agreements (PPAs) [19][24] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in capturing benefits from the growth strategy, expecting a 7% increase in revenue and a 10% increase in adjusted EBITDA for 2024 [54] - The company anticipates improved margins in 2024, with electricity segment gross margins expected to rise to between 10% to 15% [29][99] - Management highlighted strong cash collections in Kenya, with over $32 million collected in the first 50 days of 2024, indicating a positive outlook for cash flow [81] Other Important Information - The company has approximately $741 million in total liquidity and plans to invest about $550 million in capital expenditures for 2024 [32][61] - A quarterly dividend of $0.12 per share has been declared, with expectations to continue this in the next three quarters [33] Q&A Session Summary Question: Expectations for electricity gross margins in 2024 - Management expects a slight uptick in gross margins due to higher capacity at Puna, successful drilling at Olkaria, and contributions from Enel assets [75][99] Question: Update on the 2024 guidance and EBITDA support from PTCs - Management indicated a reduction in PTCs by $5 million to $10 million year-over-year, offset by new tax equity transactions [116] Question: Insights on the storage segment and margin pressures - The storage segment faced lower margins due to low merchant pricing, but management expects margins to improve with new contracts and projects coming online [103][67]