Ormat (ORA) 22 Feb 242023 Q4 Earnings call transcript

Good morning and welcome to the Ormat Technologies Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator Instructions] Please note that this event is being recorded.I would now like to turn the conference over to Josh Carroll with Alpha IR. Please go ahead.

Thank you, operator.

On the call today are Doron Blachar, Chief Executive Officer; Assi Ginzburg, Chief Financial Officer; and Smadar Lavi, Vice President of Investor Relations and ESG Planning Reporting.

relate for current defined estimates, would call generally trends. remind future results relating forward-looking may estimates are current we on provided Securities that to management's operations as and begin, about forward-looking -- this projections during contain expectations, we like Private plan, that projections, you to information or company's the current future Reform Before events and are forecasts forward-looking Act and the in XXXX.These objectives estimates future of Litigation statements to and expectations based statements differ Actual future results as from may risk materially certain result and uncertainties. a of projected those

financial all to I I not GAAP.Before now on to the call with everyone turn on isolation Investor not under that be presentation quarterly such Doron turn is risk slides in found the measures the with from company Because GAAP last Doron, EBITA. over as a calculated Ormat on considered may remind said, in will call these during the the management comparable Technologies adjusted SEC.In was of the that with be such well see and XX-Q accompanying GAAP, ormat.com and reasons would night call to please report addition, the described measures the website. is on are management, on accessed that in and With directly most in reports tab. For issued the Blachar. the as information a link this company's the to as over Form filed at Reconciliation prepared the website in are present factors the such risk call yours. press call, annual discussion release like XX-K accordance they as in for Relations that's like posted non-GAAP that set I'd presenting accordance should uncertainties, Form slide financial measures the forth presentation to statements

quarter in acquired today. year. morning, revenue product of Thank fourth in robust to The XXXX a you, good XX.X% successful Josh. collectively a augmented on segment. to increase adjusted capacity promising And XXXX, the XX.X% quarter EBITDA.Throughout adding Ormat XXXX. from in assets a generation our a and EBITDA.Throughout XXXX expansion increase growth successful and the solid us note, energy which electricity returns to we and XXXX.In its continue XXX head the with or facilities as our off product everyone. new annual backlog in the Among PV performance through our XXX with XXX you positive And XXXX XX% of previous continue compared in growing electricity attractive performance megawatt representative its our and rise saw segment we and of factors megawatts million revenue recovery storage facilities recovery full these geothermal contributed PPAs execution year's we of products. our capacity results, we the our XXXX operational adjusted total coupled successfully in our segment.As Since addition XX.X% a $XXX in the the support a for global successfully momentum integrated the finishing pricing into signed versus and execute These the our of benefits commendable year XX maintained against company strategy, the multiyear reported megawatt ability and megawatts XXXX for hour segment.This January by acquisition. our project geothermal of megawatts to growing beyond. solar annual were we the comprised development segment total into in increase in XX.X% XXX to improved targets, segment to EBITDA shareholders and additions, of development Ormat earnings straightening XX for XX quarter from beginning for increased portfolio demand year, by X and storage grew PPAs enhanced fourth X existing concluded generation the capacity and Storage demonstrated of joining encouraged with megawatts Thank earnings our with we expect segment, with further aligns long-term expansion beginning team's we're have of with growth and product terms a our is and XXXX, megawatts sign revenue

to with combined demand, continue healthy our growing strategic to XXXX, position expect key capturing the growth we in to this continue our of our leadership to us regions.Looking strategy. industry expect allow successful benefits We presence competing and ahead

We We X.X with with end our in to track are the segments potential capacity reach between gigawatt and expansion anticipate on gigawatt to a XXXX. Storage electricity both the across our by the of portfolio X.X adjusted for and and respectively to ITC for significant backed see revenue renewable and support benefits, IRA geothermal EBITDA continue the X% of including XXXX.We Storage. in PTC increase the strong XX% energy for for by

will decarbonization to our impact plans, the and current emissions will support energy the and fund strategy financial reduce supporting both growth call I demand encouraging and renewable energy to gas operation in provide to the EPS push to turn further PPAs greenhouse needs utilize climate create world's continue for Assi change.Now opportunities the the new on storage the results. review driven geothermal combat electricity resources by before environment enhance that to to and benefits updates and tailwinds beyond.The help and continue and of to segment and carries over collective efforts I in will our this expect these capital global our for expect our XXXX reduce Storage We

Assi?

Doron. you, Thank

record year. million $XXX.X higher period. to in The year-over-year. fourth adjusted a $XXX.X compared by $XXX.X increased year-over-year $XX.X by year-over-year and attributed $X.XX per the by on diluted last aim product rates fourth markets growth new on adjusted to year.On an fourth and of segments. of electricity the to share attributable the $XX.X last positive $X by our in merchant income X.X% fourth PJM the versus contribution the Let that at substantial respectively.The another the to earnings targets.Total XX.X% marks to revenue year lower for in In This excellent in operating and with quarter came was product $X.XX or head Puna quarter improved same in XXXX, had or review revenue transactions.In from increased year and respectively. $XXX global of the our tax driven in during [ XXXX, same the electricity diluted from $XXX the was million for million increase and $X.XX X Slide million revenue operating me was segment finish we revenue to capacity million been that our that net segment, and effective million, first per in plant IRA from increase the the year compared year tax revenue or stockholders XXXX, in diluted largely the segments, revenues earnings are and XX.X% numerous and Electricity to fourth include as an in full at into adjusted revenue and growth solid year recognition in results XXXX quarter.Lower X. growth growth a deliver equity the we geothermal, to EBITDA was the highlights was to an X. attributed stockholders The of the which the quarter year-over-year storage $XX our $XX.X to Kaiser quarter in combined X.X% momentum compared benefited results year also level. geothermal in storage represent stockholders fourth our operation generation basis, start marked by million, fourth net power XX.X% impact fourth share, adjusted by by XXXX. multiyear of well and due quarters income, quarter income tax In the to further XX.X% versus was the driven XXXX company's XX% period and full the million XXXX Slide project full company's XXXX, EBITDA The year prior diluted May $XXX.X segment of and solar increase company's driven growing Quarter-over-quarter full XXXX.Our operating XXXX through XX% and segment XX.X% a of to million last us financial per the my diluted segment were or across revenue than larger and ] We million share, year's last and strong growth both net XXXX. attributed share, comparison of project.These $XXX.X results to probably adjusted was compared Heber as EBITDA $XX.X largely reflected Across respectively.The $X.XX at supplemented in million full and per diluted the $XXX.X quarter respectively. $XXX quarter XX.X% lower and million, plant, down by per income basis, PV million overall year in to flow up benefits significant commercial product higher increased power million or fourth per financial and revenue performance of fourth quarter Energy positioning energy of to net quarter rates.Moving was was the the the stockholders XX% impacted to of break X product timing our quarter marking online went that XX.X% prior increase XXXX. million contract driven XXXX. to income creating as revenues backlog million decreased Year-over-year, the On represent XXXX the $XX.X of year the million was by These $XXX.X an the million segment was by in an share. by was to in increase line. XXXX online $X.XX in share new $X.XX the higher primarily the $XXX.X an versus company's XX.X% of XX.X% to and quarter

The full weakening Margin respectively, with generation associated XXXX profitability to lower higher quarter offset XX.X% interruption as X. product and and that was during quarter, of The basis partially plant fourth power the online to and segment, impact basis to the well lower partially contracts that XXX XX.X% reduction and in the to new gross year electricity margin the compared $XX.X X. due during driven margin was year to X,XXX in the Puna down due business recorded XXXX mainly QX year interruption margin revenue points prices.In the million were recorded as by $X.X decreased XXXX million and Puna fourth quarter of related decreasing XXXX in fourth mainly performance million XXXX signed in to and basis was respectively. contract segment $X.X that recorded was XXXX, New in business gross due Heber to at XXX the and Heber by margin energy of offset the prices.Moving for came quarter, the full and signed down the with merchant facilities XXXX income XXXX. basis XXX points Slide points. points XX.X% in were in XX.X% related In

we margin also agreements.Looking XXXX, expect to that The fourth driven X% signed full EBITDA. under tolling total prices rising in X% year The Slide XX% of year Ormat's to merchant EBITDA of the of carry total we and prior in transferable are to by benefits, generated to of year. observed East appendix storage positive margin, be was recorded segment XX% to reported consolidated XX% tax income PTC, was adjusted product benefit XXXX, representing In X. pricing income year-over-year.As price Bottleneck XX% million adjusted strength. the supported by in which of XX.X% negative recorded significant to we provided the related was compared segment Pomona to $XX.X year's Slide quarter adjusted our X.X% a which segment and quarter Inflation the fixed which the to $X.X increased Looking quarter, to storage million, X. was last $XX.X equity between year. margin this reduction of margin forward electricity related in XXXX by pullback period the the EBITDA segment the for Coast compared reported almost the improved Act.The EBITDA enter energy slides.Moving to the generated PPA fourth gross tax same X.X% at to XX% adjusted X product XXXX. energy EBITDA COD Reconciliation this between market-driven compared expect $XX.X the XX%.The in X in to million were million provision of compared we transactions income remaining segment and in related of million active Reduction In The is $X related tax the while last to

facility the million expect For line year, sale to the income COD came the benefits expect the the this with of XX. sign Slide The income We new we transactions the to reached we the to tax and in reduce to ITC benefits $XXX benefit record to during line. our and by And of to tax fiscal we slightly million capital $XX.X benefits expect and $XX.X ITC million needs benefit anticipate Also to related year.For storage record online, tax the is storage quarter $XX elimination million in one ITC the receipt entire full equity recorded that approximately to in million tax instead quarter year. XXXX. tax plan tax benefit income the under of XXXX to to our the by in ] flip the annual year throughout due $X.X an to we increased of ITC the the at attributed reduce in the proportionally Beowawe.We approximately project related rate related line recording proceeds tax cash facilities the will of PTC XXXX, recorded million full line to storage different new reduction also of and benefit way in transaction fourth [ to we year PTC offset the related date for P&L XXXX, our income of compared XXXX.Looking under $X our that Heber million. $XX expect under that

will nearly to to position short-term remain think which debt XX. XX, X.Xx XXXX, to interest global Slide liabilities Our equivalents equivalent appendix restricted approximately $X.X to million cash cash fixed net on billion paper net of approximately deferred presented to of average financing note EBITDA. equivalents for $XXX million costs, stand it was is payment $XXX Cash we and debt $X.X in the and at important debt that XX, We of approximately compared environment.Let's debt is December Slide cash of as our company and and was rising the reinvest the billion XXXX, as as in capital months, believe excluding to debt obligation commercial of of The XXXX, at in XX X.X%. XXXX. Ormat's business ability we the cost in service debt end move of total for the XX Ormat XX Slide all illustrating nature, rate breaks December the outline shareholders.Our and continue cash the our issued December competitively our our help was to rate our XX, returning to schedule. the while

We have $XXX total approximately of liquidity. million

on to outstanding execute a we Overall, capital perspective, between very our common shares dividend quarters. access of funding cash few capital well to to IRA in expect next Board excellent liquidity declared, the $XXX strategic well all XXXX.In total and from issued we XXXX drilling as CapEx On and commercial that to in dividends approximately the March the our which of detailed Slide of to $XXX in XX% each million capital entitled construction, February U.S. share XX storage as Ormat benefits.We payments payable benefit. Our maintaining share the will pay product and resource IRA by plan XXXX, at segment in for $X.XX per addition, years additional our to electricity be as in to XXXX, operation $X.XX XX% is to new of the is in on X receive we In million expected positioned next each and million growth of from the maintenance of expect of X, invest assets. in appendix. approximately $XXX ample expect March in supported and stock quarterly company authorized approved the per XX, Directors holders quarterly XXXX, XX, plans

Enel for Finally, funded corporate on North overall the a improve of that million Power enhancements portfolio XXXX.The turn Ormat completed call accretive expected assets. in Ormat is geothermal of like to overview. discuss new January were and to The loans X, to $XXX asset of initiatives.That from million to Doron operational Enel assets the we amount my paid I EBITDA be and combination optimization developments. Green series of were XXXX, acquisition the further to equity asset over and the intend $XXX acquisition performance both solar would transactions to in the with with in of interest now financial some Green the January strategic and contracted the immediately available operating portfolio XXX% acquired in concludes revenue recent cash through of raised America. portfolio the

Thank you, Assi.

notably a glimpse carried segment portfolio. multiple CODs in for support core from in to during April. our growth our Slide our Turning at at achieved we electricity North Generation XXXX, operating most Valley XX deeper

operations online respective the to due Dixie completed partially Phase Puna at our we to performance field, that at by well the additional performance the related to equipment, we the reduction which offset our following [ portfolio course carried support of rate.The CDX was expansion also the to the which higher operational Puna Heber of the XX in the achieved at improved PPA.Our existing ] Additionally, to And our capacity over brought operations capacity. X, This value run megawatts. X also undertook Tungsten replacement full currently plant maximize is CODs fourth the operating of allowing us facility Valley back lower above plant and facility generating a issues year an of at we in capacity and caused XXXX. capacity of the quarter from

total achieve increase well in positioning purchased Enel our X,XXX XX.X% a I to we in on including footprint. megawatts multiyear to stands more XX. electricity compared segment assets target.Turning portfolio at X,XXX generating the current to Slide recently level, give capacity, year will details marked XXXX. prior operating This our Our versus megawatts the us expansion

We approval sell cost expected of to hour $XXX we megawatt up avoided year. of prior structure. average will ] operating new an rate successfully increased and and per at a of at the are power back XXs and from fixed power EIS.The carry up will carries the megawatts The above slightly to level, of the Olkaria plant generated normal operation rate $XXX PUC the have received the low operating megawatts, PPA and plant energy capacity contracted completion to expands megawatt from remove we volatility electricity.At -- year. of our following effect facility recently XXX% are in an current assuming We the at be the PPA XX approximately XXX Puna that hour, megawatt in the earlier the the we PPA XXXX in upgrade currently observed the Kenya, Hawaiian for confirmation new in will a from [ generation

we the professional tested. continued campaign the drilling in has being shown capacity work are Olkaria conducted now XXXX that to and Our to of successful results team increase

portfolio power to BOT the signed to economic a on the improve of of Bouillante We that plants attractive the Slide we new the strengthen Bouillante we we portfolio of geothermal the XX. we power and XXXX. closed Dominica capacity megawatts operating potential on manufactured United build to America. continue end Power X-year of strategic through States internally the January This The North trading and the EBITDA In connection are PV expect plant the California.Turning economics Guadeloupe for average portfolio, and finalize in PPA manpower contribution synergies to equipment investments, contracted and a shortly. asset in will Solar roughly resource October, to Caribbean, with power including costs also annualized opportunity $XX of and best-in-class future the replacement negotiations with plant acquisition Guadeloupe. of proximity announced of plant.And facilities XX-megawatt future in X in a operational new plant The XX. and consolidated At the Enel with power transaction the a facilities near XXXX, the these XXX projects greenfield growth carries a optimization and the expect asset new PPA in X generation performance.In new front X carries reduce explore of power our of utilization expected operational Slide from of to creates in expand targeted option including the expect development the equipment support wells million.The series Utah through existing optimizing Green

the of to backlog discuss third backlog coming at in margin in to hour agreement plan. And facility.We recently contract to Bottleneck XX, these see expected lower the Slide revenues to the with Arrowleaf XXXX Ngatamariki portfolio, Zealand. market. tolling Slide geothermal where million our add New the and the following megawatts for rates, to primarily I'll lower due project the commission or segment We our total XX-megawatt in of successfully briefly Indonesia These XX segment, to and XXX including in for America.Moving growth by storage revenue merchant contract profitable fourth growth $XXX Latin fleet. segment projects million. mostly the be in final XXXX.Please energy future our X expanding to The successfully a contracted and We stream an also marks stands agreement to quarter $XX the product This facility. in agreements a contract XXXX storage the update facility. XX year-over-year Zealand, This storage segment. potential of long-term carries tolling megawatts on new signed and from predictable Kaiser $XXX Flemington stable, Our secured agreement X turn XXXX, and our roughly segment's currently New XX% signed in the the revenue million and East we end energy contribute reported for gross hour over stages feel the Pomona solar XX-megawatt for are PGM of

continue increase to to XXXX. of see geothermal that demand steady an us confidence execution successful in target given the growth provided And in We for the our early energy. strategy reiterate XXXX we has our and the

PPAs.Additionally, added intermittent the supplementing tailwinds adjacent power future sustain the geothermal has helped gas renewable success the California growth to that the XXXX, will high-capacity With markets we power to their of in gigawatts forefront efforts expand emissions. grids greenhouse respective on in capacity it acquisitive goals critical for generation reliable energy geothermal supply captured play and and for and as for are with have between tailwind role supporting developing energy created and year-end the achieved achieve the to region of of grid. demand supported thus their Nevada storage the zero energy support our reduce growth we resources that recognize resources has far XXXX.Our in targeting and and necessary further to target capacity X.X organic with by attractive storage X.X critical This by portfolio emissions be

new lower our the plan to geothermal to and which the to we higher for due Act, needs fund at As the and ability enter to new discussed continue benefit develop in tax had into XX% further our economics our XX, Slide storage seeking plan on geothermal Reduction impact capital Inflation which previously, power on capital U.S. August can to needs.We asset a transaction, was in PTC plants positive over equity U.S.Moving plants signed geothermal XXXX, have the significant has for XX. of

on back are as our track XXXX in communicated with Day. in Analyst our We targets long-term

and reach of portfolio our expect and we to the XXXX, remain between X.X megawatts track by the than plans energy levels.Slides XXX X.X from end year-end underway. by gigawatt geothermal megawatts to In more with fivefold or growth currently increase we to storage, PV X,XXX solar X,XXX and to XXXX. a prior on total and expect showcase XX We XXX electricity to hour hybrid project capacity expansion our between the generation marking XX

on Indonesia, in Ijen which second Beowawe commissioning capacity to XX megawatts to achieve which in are we add We of New be of the will area we operations power Later, portfolio.In half our XXXX, project, to XX Repowering large the the the to we the growing end commercial in expect and with towards add XXXX, track another our plant of megawatts in for one plant in complete Zealand. XXXX. expect Caribbean expect

upgrade the by commission the solar acquired In add exploration year the North Hills addition, our towards be first Slide XXXX. successful end that the expect and to the to of we will are as Solar and planning by end prospects Puna, our of are recently and to XX. expected and XX QX weighted North PV assets development end Beowawe we XXXX.Our in approximately have by megawatts X XXXX between are and Valley underway half QX.Moving of of project portfolio to Valley new operational end of Steamboat

our or of assets. portfolio and growth layer on development that growth the development of of our currently third We by our X focuses X,XXX end energy add storage storage will under the to XXXX. projects The megawatt plan XXX have hour megawatts

to second XX-megawatt Flemington the hour construction online in facility we in in currently the COD in that is East storage be in for of XX-megawatt XXXX. expected XXX-megawatt New are of the storage half facility Shirk, stage California We our released Jersey.Also later

States, for XXXX United of demand energy benefit to of for increased in where market in the from or Geographically, hour. continue XX overall energy largely Slide XX.X target ability on as storage discussion Our XX a the to Slide capabilities.Please pipeline the we to gigawatt our turn have potential focus storage shows X.X coal our gigawatt displayed future at capacity we efforts the guidance. our

results. million, expect revenue and to X% $XXX million $XXX increase between increase We at of electricity and be total X% year-over-year the with revenues million million, compared XXXX an by segment $XXX $XXX to to midpoint and between

million increase and expect $XX $XXX And $XXX between product and storage between adjusted million. $XXX expected XX% million to and $XXX are revenues $XX the EBITDA range between to expect approximately million be million to in We midpoint million.We segment. at the energy by

expect We prepared will annual that strong a off capped This remarks for very year end a $XX quarter to approximately strong million.I Slide interest adjusted EBITDA to was minority Ormat. attributable be XX. on our

shareholder differentiated energy will attractive successful and value and geothermal, XXXX.Before our We our are as next develop York XX, PV I'm power-generating our will and City call confident that storage that June to PPA significant questions, ability with prepared our in drive New unique to have open growth assets, across tell for XXXX. you Investor projects our remarks. This attractive Day attractive I Ormat on and the strategy of we demonstrated portfolio position concludes we progress solar long-term for happy

the Now I call questions. please? open for would to like Operator,

[Operator line Instructions] the from Clare ROTH MKM. with come of Our first question Justin will

the also be higher influencing operating we the level but change? the but that expectations you just key factors first So might share the assets, are acquisition of there? if would Puna the missed in There's compare there's then thinking the did are at it, electricity I gross mind of off that And should XXXX we for here, margin margins that are should capacity, have Enel what not, elements XXXX, about If a XXXX? about? be you wondering what expectations in we the gross providing thinking to other

capacity much electricity, One, at uptick coming a gross that at is full X% X% year, the year XXXX, for the I'm XXXX, you the year, elements: basically XX.X%. the XXXX. said, It's When by or gross was full look on look margin versus XXXX operating X to the So and when at rightfully a roughly expected slight we in as expect talk for higher margin. we going we Puna from full

Second, relatively had Olkaria, us contributing of we that assets Enel drilling year in the gross the a of is successful high And that expect we campaign very second the to impact in third also half positively. margin.

the looks by Storage, like there? potentially track had to talked you wondering about they'd of target target. you the helpful. assets Are you X.X to still the be still. So geothermal solar to XXXX? and And like seems achieve target added Okay. capacity Got meet the you That's have maybe interim that it. the anticipating was X.X in to It end pipeline X.X gigawatts you here, some X gigawatts, for reiterated then XXXX. assets it to if XXXX do are on

So how about you that? are thinking

are we Yes, for the of expecting the target 'XX. to reach end

projects As project we close storage some targets. we'll you Shirk detailed of are that to energy that released, all week, this the -- ] still we working them all do the get us there. released release these to we look so that and would [ with we expect line need getting very to on the at list that permits project said, the when be are in release the to projects have you we There's and including final

Okay. Got you're it. looks And It a just then here one maybe exploring amount decent more. quarter-over-quarter. your like that increased prospects

what you drove I opportunities just can I what think expand you last there wondering on XX and have pursuing? XX the increase now versus you're if was quarter.

have the guess targets, new in greenfields Enel The brought And that's opportunities. we that U.S., a ongoing that referring to process acquisition the continuously lands I mainly at in. potential an chance, look difference California. of to, is what prospects Enel the we the BLM and new think that brought in buy but Utah Whenever prospect they increased issue, you due in and the main we acquisition are in the new of I it's

the question Ryan of comes Levine next Your from line Citi. with

you I development seeing passed got in that meaningful emerge you're in for New one on commercial came outlook more last the Mexico. is your that Mexico? start off development recent What's Hoping legislation project New opportunities to that -- that And state? week. have noticed there into there,

Yes.

you But that We are [indiscernible] also Mexico weeks which are in over there looking New can that with market new tell regulatory we see didn't we plants Mexico. storage we ago, have Mexico. this support that at on as actually greenfield, operating. energy a So can potential we New change, tell it. are until power strong know a few like. the a last legislation the looking I in I you New we there

So place we are this a looking is into. definitely that

case projects in give or you out around the those an region state and the died may terms shifting the you commercial the us negotiations state progressing? of as this cash in the Maybe are Kenya, update quarter received Okay. how can in payments have of world,

last not As the agriculture rising, very to pay, in was weather inability I dollars positively call, year second export. that because Kenya of mentioned KPLC XXXX impacted the but in the a of last U.S. of AR lack of because of good country the in half because the

that we the that bond issue new XX of -- able billion X fact debt collected I'm the to few to was of XX happy XXXX, government Kenya addition say $XX the million. to in over EUR first days ago, weeks a already In

for and our was $XX end say end XXXX, So good a strong there that to good benefiting very so to of was collected -- outlook far cash continue will million was of the year, by million very owed I tremendously. a the that and collection.So with of $XX already us outcome out XXXX to this us

flow to you every the the million receivable. situation. at almost flow negotiation, as were increase and the that the much see suffering everybody cash -- in we'll $XX If therefore, know knows is we of and this that will you win-win hope stronger.As be opposite a year, cash be operating in it negotiation year, look there needs I last the

We have until with XXXX. a valid contract PPA

than prospects needed fact was is getting always the happy priced the electricity in Kenya can't KenGen. We are and mainly the win-win on change say already of a new it's in other to of there Ormat cheapest that because new terms most base.I terms any negotiate into electricity that probably

the collection you going to And today, -- one, for as anticipate But very have market. in at contract the major don't announce are need a as in of strong XXXX Kenya. the expect beginning, we and will I will electricity paying to if they changes forward. any at from said least they we be it So and there it

quarter? margin Okay. outlook And other or recent [ ] resource merchant your may mix appreciate we around fixed or margin adequacy any you that for for all mind? that And in any have to that this keep hubs pressure any margin storage going the And payments relevant caused segment, the in or that are the should key extent outlook the disclosure seeing Storage then I on there's revenue the mix, how there are forward? is

XX% was or I merchant doing relatively signing that across the saw next we that signed we agreements. pricing online expect said tolling is negotiating balancing I to X, are with low around with with would have PPA. we in we that's signed energy Part this margins of coming say contracts Bottleneck XXXX are of additional the year, risk all and that Pomona And end we will we We PPAs come year additional at the why in be as contracted.And PPA lower then agreements the you of year. the storage. before, operate and the markets contracts

So there's balance, a that all not volatility high in see see going be so this all, will today. we to we

However, be into XX% this to margins, to on benefit at all do We around we volatility. XX% around because even we in get better higher operation. once so comes in believe storage we to Bottleneck can expect want the contracted be from definitely second do have not aligned.And just XX% we half to gross of assets XXXX, XX% margin want it that to 'XX

comes Dumoulin-Smith of of Your Bank from with America. line question next Julien the

Excellent.

over vis-a-vis segment? bit of the little flattish robust you last the bit that You've had First here? revenue talk latest But if are off, I cadence off about the is Just is years. of can, couple you a how Storage Obviously, of year a little thinking business more a about just guidance? 'XX. that what just time going can a on flattish

just color why ballpark a bit in negative margins of sort in here, is the You've into in you just more obviously, profitable been putting the on quarter. the will. more still it, And little it more same the if capital earlier years, but

operated can't as merchant, million, in is finished increase close change million year-over-year. come agreement the to pricing market projects assets, mainly increase year-over-year. for how fact what year. see and pricing we which said, contracted if see merchant that we on $XX you will I of will and negative fleet we the 'XX the of online assets relates look and to once The go is -- the up.Actually, most to Storage the year, that going guidance annualize second $XX half to around to would the full in they XX% bring more over in of 'XX with all margins kicked the more goes was $XX probably sign the and that would you Bottleneck tolling -- quarter, is we Pomona 'XX in as We that online is and the What XX% the see gave the million. we go

that So be to plan we after at to second continue we from actually this continue XX% as storage release coming as segment to the significantly we we the growth margins, the projects year. and it's we expect said, on significant 'XX half I to around grow to XX% XX% and to 'XX, the have When into we are the with Bottleneck -- starting Storage. to in the -- you And the XX%. megawatts to grow grow large the to XXX during operations a see of XXX growth end to over benefit that expect see to

Got have it. you storage to How the just And about forward longer vis-a-vis Excellent. as the you then here? But up. guys just term this years growth. we're interim coming will Analyst here, overall, you here. And many Obviously, have I provide to about that talking that think here expect maybe 'XX, dated then by you more Day you financial how pivot that about the targets a midyear? little sort metrics you articulated? something it of that thinking view get of 'XX going bit these longer might you're now had, are a achieving to to

targets, that reiterating growth targets. now said we growth to target we are or have target the in line in be XXXX, growth the is these what we the with expect that Look, we set and

with a the targets. we Analyst I will As longer-term target. road, many the obviously longer-term we we but down Analyst in the exactly come June, Day how can't to years in tell previous Days, give all you come

the is know going. where will you So company

the end 'XX assets, X.X X.X for target the of growth gigawatts out gave which we target. again, operating to very of today nice a think is I

come the will [Operator Podhaizer And line from Barclays. with question Instructions] of our Derek next

I the go just XXXX to wanted back guide. to

of clarify you the as guide PTCs? storage. Can product takes how margin about puts kind talked far you the gross guys and You support on different out as EBITDA the just Just expect expansion triangulate of electricity, and and there. much

So front -- margin you be helpful. PTCs and brings guides, the you you expand revenue the then on we brings but got the on what what would

transactions PTC to down XX I on we It's million equity $XX ended. will of the number.We $X one will years transaction. Opal elimination call, because entered basically it's our tax be Heber year, ago number, to the we plan $X roughly $XX of this million. new -- million that As be the offset into the facilities tax expect $XX But and mentioned of X enter in million equity had we the net to in This net to and is million the Beowawe. into year-over-year

$XX to million Next expect year, million we $X less.

us ask How that to wanted should or re-equitize the deck. all for the to about you covenants. as very and reductions Got on covenants other means projects going just think forward? for what's we call should we as what balance explain helpful. as your I as just put and the everything the having the capacity it. curious And driving that? then reductions think XX-megawatt far just help That's could far sheet. your in can Yes, what call on potentially that about the as that with balance to the as I it just thoughts mean it sheet around with guys be how some about as far you

at balance the metrics. X.Xx with year-end sheet balance start was is strong. Let's Debt-to-EBITDA very The at sheet.

are covenants sometimes debt-to-EBITDA. X Xx around to Our

half even have million And not we of borrowed to billion $X be $XXX the or it. million to as Enel with be we we should no a additional said, liquidity. liquidity over by borrow to $XXX fund we the we EBITDA our because close us for liquidity EBITDA.From additional impact should So additional it, did perspective, transaction

in I sheet the the companies in industry. think side, lowest leverage Ormat with of industry So strongest the on one the the is balance probably

the in equity We you leverage the X knowing see we at therefore, transaction this me question right can at? the in offering. equity the transaction Just of front the I Can for to and If well market, anticipate are Xx.And don't look to anticipating our peers, point page timed peers what you of XX versus any very looking so of XXXX which we requirement. M&A on raised and megawatts, we strong a follow, mainly repeat have our the were actually equity us at the you you answer better.

XX-megawatt and No, the comments. appreciate I just Slide Yes. all reduction. #XX, those

that? the how that that? What's driving how of rest think portfolio? Just for about And should to we the think about

time every all the So we every every -- power quarter, year, balance plants.

more than big, there that's power there. here cooling mega a that was any one a it Some maybe portfolio. think adjust what mega and plants was project was have I anticipated and how but don't we the

it. Got

just takes factor about then and the mean on bringing And and one more over talk that? solar, be trends? question But how geothermal the you're around capacity factor your more puts just few helpful. dilutive next Can the assets. to which years should the That's we I think about all from capacity Okay. me. should you

years. Kenya the the in that over should, I and that the are Puna that assets increase new more bringing were Also well and think few fact more we facilities capacity factor. you performing over have time, last not

the over uptick. or should already to them expect in X, even we a We Puna.So perform slight next starting much year see better

electricity actually, the solar that solar, produces the price effective not as but from you're producing remember -- please lower, we getting factor we is is more are are is as But right, geothermal capacity that power the dilutive that plant. of -- think solar the because price. you You actually are on our it right

the it's earnings. it's but factor, maybe the dilutive to to So capacity very accretive

remarks. We back have no the closing further hand questions at call I'll Blachar to this Doron for time.

XXXX for growth very year is even as new to released better you. XXXX demonstrated the Enel we and to Thank project expect a was forward grow your be the a you. we and June. with in the XXXX continuing we committed to want support year. Ormat good acquisition. you have see we to Thank in And you I set.So to that looking thank target are of we company with all and the

joining. today's conclude Thank all you call. for does That

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