Ormat Technologies – Recommended List Write-up
3rd Quarter 2007 stats:
3rd Quarter revenues - $79.5 million, 2.1% YoY increase
3rd Quarter net income - $15.8 million, 13.1% YoY increase
Total generating capacity of 382 MW
250 MW either under construction or development
Electricity segment revenues for the 3rd quarter were $61.4 million
Products segment revenues for the 3rd quarter were $18.1 million
Approximately $370 million will be needed for Capex through the end of 2008.
Drilling rig acquired to support exploration with plans to acquire two additional rigs.
Power plant and project highlights
North Brawley (50 MW) project online by the end of 2008. Ormat option to increase to 100MW.
Heber South (10 MW) and Galena 3 (17 MW) to come online the 1st Quarter of 2008.
Olkara III (35 MW) to come online 4th Quarter of 2008.
Sarulla, Indonesia 340 MW project
ORA to own 12.75% of the company that owns and operates the project and will supply equipment.
Ormat is the largest player in the geothermal industry. The company is a vertically integrated business which can design, develop, build, own, and operate environmentally friendly, geothermal and recovered energy plants worldwide. There are a number of startups but none with the size and scope of Ormat. In fact, a number of the startups use the company's technology when they build out plants for operation.
The company operates geothermal projects in the US, Guatamala, Kenya, Nicaragua, and recovered energy generation plants in the US and m ore than 80% of electricity revenues were derived from fixed rate contracts.
Lease agreements were secured through public auction with the Bureau of Land Management (BLM) for 7 new sites in Nevada covering approximately 68,900 acres.
The third quarter was strong as increased demand from utilities during the summer drove revenue growth. Utilities have a preference for the company's geothermal power because it is base load power. Base load power means that it provides a steady flow of power no matter how much demand is on the grid.
There is no lag time to build up to a steady state like coal or nuclear. Geothermal can be turned on during the day to meet peak demand and turned off during the night when demand is low. In addition, geothermal is clean power which puts off no carbon emissions into the atmosphere.
Ormat's US plants are well positioned in Nevada able to provide access to the growing California and Nevada markets. While this may not be a growth stock, the company is the main player in the growing geothermal market and a leading provider of green energy. Anyone thinking of investing in geothermal or green power needs to consider Ormat in their portfolio.
Source: Ormat Technologies website