Highlights of the company performance include:
Revenues increased 35.2% for the quarter to $95.5 million and 16.5% for the year to $344.8 million.
Net income increased 31.3% to $11.7 million in the quarter and 82.0% to $49.8 million for the year.
Earnings per share increased 18.2 % to $0.26 in the quarter and 60% to $1.12 for the year.
Product backlog reached a record high of $194 million.
Ormat-owned generating capacity increased by 109 MW, an increase of over 25% during 2008.
Commenting on the results, Dita Bronicki, chief executive officer of Ormat, stated: It was a good year and quarter for Ormat, as reflected in our financial results. The fundamental business of the company is in excellent condition and the benefits of the new Stimulus Act will further improve our future results. We substantially grew and improved the profitability of our Electricity and Products Segments, significantly increased the generating capacity in our Electricity Segment and ended the year with a record backlog in the Products Segment.
In our Electricity Segment, we have substantially completed the construction of several projects that have increased our generating portfolio by 109 MW to 505 MW. This organic growth includes:
Phase II of the Olkaria III project in Kenya, which was completed during the fourth quarter of 2008 and is now in commercial operation;
The 50 MW North Brawley project, which reached the start up phase and will ramp up gradually with full capacity expected in the second quarter of 2009;
18 MW in 2 different geothermal projects; and
5.5 MW in the first of four OREG 2 recovered energy generation (REG) projects.
Bronicki continued, Looking ahead to 2009, in our Electricity Segment we expect to add around 34 MW to our generating portfolio. We had hoped to complete the 30 MW East Brawley project in 2009, but this project has been pushed back to 2010 due to permitting delays.
In support of future growth we have added 150,000 acres of new leases to our development inventory during 2008, a large acreage for future exploration activity. We have in place the capital resources to fund our CapEx requirement of about $250 million for our present growth plans in 2009, Bronicki concluded.
Electricity revenues for the fourth quarter of 2008 were $62.1 million, an increase of 11.8%, compared to $55.5 million in the fourth quarter of 2007. The increase in electricity revenues is primarily attributable to a net increase in domestic electricity generation to 645,826 MWh for the quarter, up from 533,110 MWh in the same period of 2007 as a result of new plants coming on line and enhanced performance of existing plants. In addition, increased energy rates at the Puna project due to higher oil prices also helped boost electricity revenues. Current lower oil prices will reduce our revenues from the Puna project in 2009.
Revenues from the Products Segment for the three-month period ended December 31, 2008 were $33.4 million, compared to $15.1 million in the same period in 2007, an increase of 120.9%. Most of the increase in revenues was derived from two large geothermal projects, the Blue Mountain project in Nevada and the Centennial Binary Plant in New Zealand.
Adjusted EBITDA for the fourth quarter of 2008 was $31.5 million, compared to $25.2 million in the same quarter last year. Adjusted EBITDA includes operating income and depreciation and amortization totaling $1.3 million and $2.0 million for the quarters ended December 31, 2008 and 2007, respectively, related to the company’s unconsolidated investments. The reconciliation of GAAP net income to Adjusted EBITDA is set forth below in this release.
Cash, cash equivalents and marketable securities as of December 31, 2008 decreased to $34.4 million from $60.7 million as of December 31, 2007. In addition, we have unutilized committed bank lines of credits aggregating $222.5 million.
Annual Results
For the year ended December 31, 2008, total revenues were $344.8 million, an increase of 16.5% from $296.0 million for the year ended December 31, 2007. Net income for the year ended December 31, 2008 was $49.8 million, or $1.12 per share (diluted), compared to $27.4 million, or $0.70 per share (diluted), for the year ended December 31, 2007. There were 44.3 million weighted average shares used in the computation of diluted earnings per share in the year ended December 31, 2008 and 38.9 million weighted average shares in the year ended December 31, 2007.
Electricity Segment revenues for the year ended December 31, 2008, were $252.3 million, an increase of 16.8% from $216.0 million for the year ended December 31, 2007. Products Segment revenues for the year ended December 31, 2008 were $92.6 million, an increase of 15.8% from $80.0 million in the year ended December 31, 2007.
For the year ended December 31, 2008, the company’s gross margin was 29.6%, compared to 26.8% for the year ended December 31, 2007. Operating income for the year ended December 31, 2008 was $60.6 million, compared with $43.5 million for the year ended December 31, 2007, an increase of 39.5%. The increase in operating income is primarily attributable to increased revenues in both our Electricity and Products Segments as well as increased gross margins.
Adjusted EBITDA for the year ended December 31, 2008, was $124.7 million dollars, compared to $107.2 million for the year ended December 31, 2007. Adjusted EBITDA includes consolidated EBITDA and the company’s share in the operating income and depreciation and amortization totaling $5.4 million and $14.6 million for the year ended December 31, 2008 and 2007, respectively, related to the company’s unconsolidated investments.
Commenting on the outlook for 2009, Bronicki said, We expect our 2009 Electricity Segment revenues to be between $280 million and $290 million. We also expect an additional $9 million of revenues from our share of electricity revenue generated by a subsidiary, which is accounted for under the equity method. With regard to our Products Segment, we expect that our 2009 revenues will be between $100 million and $120 million.
