Ormat reports annual results for 2010 and updates on development

Puna Geothermal Power Plant, Big Island, Hawaii (source: betterplace.com)

Alexander Richter 24 Feb 2011

Ormat releases annual and fourth quarter results for 2010, highlighting a 15.5% increase in electricity segment revenues, annual net income of $37.s million, the completion of the 15 MW Jersey Valley plant in Northern Nevada and the 8 MW expansion at Puna in Hawaii, the raising of approximately $250m in debt offering, the refinancing of $24.9m in tax equity transaction, the increase of its land position to 343,000 acres, the acquisition of the balance of the Mammoth complex and continued progress in greenfield development sites.

“Commenting on the results, Dita Bronicki, Chief Executive Officer of Ormat, stated: “The significant resources we have invested in the acquisition, exploration and development of new leases, as well as project enhancements, are reflected in the steady growth of our total generation. This positively impacted revenue in our Electricity Segment, which reached $291.8 million, a 15.5% increase over last year. We currently have ten projects in various stages of construction and development that we expect will add significantly to our generation and top-line growth through 2013.”

“Looking to the longer-term, we continue to search for new geothermal fields while keeping a careful eye on value. Lease acquisition and greenfield development remain key to our long-term objectives, and are supported by our ability to raise attractive financing. Our land portfolio totals over 343,000 acres and we have 15 projects in various stages of exploration. We raised approximately $250 million in a bond offering and we will continue to pursue the benefits of the stimulus ARRA where eligible. In our product business we see some results from our marketing efforts with new orders added to our backlog and are optimistic that some of current negotiations will mature into additional orders in the near future.”

“The low output and high costs of North Brawley materially impacted our results in 2010. However, we expect to see improvement, both in terms of revenue and costs towards the end of 2011. North Brawley capacity was recently increased to approximately 30 MW following the addition of a new injection area and work to increase the output of the power plant will continue in 2011.”

The North Brawley power plant was tested under U.S. GAAP guidance for impairment in the current year due to the low output and the higher than expected operating costs. Based on these indicators we tested North Brawley for recoverability by estimating its future cash flows. The test for recoverability concluded that no impairment existed at December 31, 2010. However, if we will not be able to bring the project capacity to approximately 45 MW and the operating costs to the level of our current projections, we will have to record a material impairment of the investment in the power plant. We are continuously assessing our progress in achieving these objectives.”

For the full release see link below.

Source: company announcement via PR Newswire