Japan-Based Orix Corp Cuts Stake in Geothermal Company Ormat Tech After Q3 Results

Fintel reports that Japan-based Orix has filed a 13D/A form with the SEC disclosing ownership of 7,238,577 shares of Ormat Technologies, Inc. (ORA). This represents 12.9% of the company.

In their previous filing dated November 27, 2020 they reported 10,988,577 shares and 19.70% of the company, a decrease in shares of 34.13% and a decrease in total ownership of 6.80% (calculated as current – previous percent ownership).

Ormat Technologies, Inc. is a leading geothermal company and the only vertically integrated company engaged in geothermal and recovered energy generation (‘REG’), with robust plan to accelerate long-term growth in the energy segment market to establish leading position in the U.S. energy storage market.

The Company owns, operates, designs, manufactures and sells geothermal and REG power plants primarily based on the Ormat Energy Converter – a power generation unit that converts low-, medium- and high-temperature heat into electricity. The Company has engineered, manufactured and constructed power plants, which it currently owns or has installed to utilities and developers worldwide, totaling approximately 3,200 MW of gross capacity.

Ormat leveraged its core capabilities in the geothermal and REG industries and its global presence to expand the Company activity into the energy storage services, solar Photovoltaic (PV) and energy storage plus Solar PV. Ormat’s current 932 MW of geothermal and Solar generating portfolio is spread globally in the U.S., Kenya, Guatemala, Indonesia, Honduras, and Guadeloupe and its 73 MW energy storage portfolio is located in the U.S.

In it’s most recent earnings release, the company reported the following highlights:

• Net income attributable to the Company’s stockholders and diluted EPS for the third quarter of 2022 increased 21.5% and 23.1%, respectively, versus the prior year period. This was a result of the increase in operating income driven by all operating segments.
• Adjusted Net income attributable to the Company’s stockholders and adjusted diluted EPS for the third quarter of 2022 increased 5.3% and 2.5%, respectively, compared to last year.
• Adjusted EBITDA for the third quarter of 2022 was $102.2 million, an increase of 0.6% compared to $101.6 million in 2021, supported by an 8.1% increase in operating income driven mainly by the reduction in G&A expenses due to lower legal expenses. This increase was offset by the absence of $15.8 million in insurance proceeds received in the third quarter last year.
• Electricity segment revenues increased 7.1% for the third quarter of 2022, compared to 2021, driven by the Tungsten and CD4 plants each reaching their respective CODs and the Puna plant garnering higher capacity along with improved energy rates. The segment revenue was partially offset by the shutdown of the Heber 1 power plant due to fire.
• Electricity segment gross margin decreased to 36.5%. This decrease was driven by one-off business interruption insurance proceeds of $15.5 million in relation to the Puna power plant in Hawaii, recorded in the third quarter last year, causing a higher-than-normal gross margin of 42.8% in the third quarter of 2021. Excluding these business interruption proceeds, gross margin was 32.0%, an increase of 4.5% compared to last year.
• We recorded in the third quarter of 2022 $4.0 million of insurance proceeds related to Heber 1 and a total of $7.4 million in the nine months of 2022 as a reduction of the electricity cost of revenues.
• Product segment revenues increased 35.1% to $14.2 million due to new contracts signed in 2022.
• Product segment backlog grew this quarter by approximately 150% compared to the second quarter of 2022 driven by the $100 million in contracts signed in the third quarter. Backlog stands at $137.1 million as of November 3, 2022.
• Energy storage segment revenues increased 56.2% to $8.8 million, primarily driven by the increase in merchant prices in our main markets.

What are other large shareholders doing?

Global Alpha Capital Management Ltd. holds 1,956,756 shares representing 3.49% ownership of the company. In it’s prior filing, the firm reported owning 2,174,087 shares, representing a decrease of 11.11%. The firm decreased its portfolio allocation in ORA by 5.75% over the last quarter.

Impax Asset Management Group plc holds 1,939,031 shares representing 3.46% ownership of the company. In it’s prior filing, the firm reported owning 3,052,936 shares, representing a decrease of 57.45%. The firm decreased its portfolio allocation in ORA by 26.32% over the last quarter.

Clal Insurance Enterprises Holdings Ltd holds 1,793,074 shares representing 3.20% ownership of the company. In it’s prior filing, the firm reported owning 2,118,402 shares, representing a decrease of 18.14%. The firm decreased its portfolio allocation in ORA by 3.96% over the last quarter.

Amundi holds 1,205,829 shares representing 2.15% ownership of the company. In it’s prior filing, the firm reported owning 1,120,993 shares, representing an increase of 7.04%. The firm decreased its portfolio allocation in ORA by 93.68% over the last quarter.

This article originally appeared on Fintel.

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