It's our 19th anniversary!

Generating power and profit

Investment from 6,100 USD

Expires: 15/03/2019

Expected
yearly returns
87%

Ormat Technologies is an international, vertically-integrated company specialising in the design, construction, and operation of power stations (mostly geothermal) that use renewable energy sources. Ormat Technologies has two key areas of operation:

  1. The construction of power stations that use renewable energy sources (this accounts for 65% of the company’s revenue).
  2. The manufacture and installation of equipment for power stations that use renewable energy sources (this accounts for 35% of the company’s revenue).

49.1% of the company’s revenue is generated in the US, with the remaining 50.9% coming from 29 other countries, including Kenya, Guadeloupe, Guatemala, Honduras, and others. The company employs about 550 people in the US and 770 in other countries. Ormat Technologies was founded in 1965 and currently holds 77 patents in the US. Among the company’s shareholders are: BlackRock (5.01%), J.P.Morgan Chase&Co (0.44%), Edmond de Rothschild Group (0.03%), Rothschild Israel (0.02%).

Growth factors:

  • Continued successful implementation of a strategy aimed at increasing share capital, which includes the following aspects:
    1. Improving efficiency. The company’s profitability continues to rise; having posted the following ratios of net profit to revenue over the last few years: 8.3% (2013), 10.5% (2014), 12.7% (2015), 16.6% (2016), 22.9% (2017), and 25.2% (first quarter of 2018). The company’s return on equity has grown from 5.8% in 2013 to 13.44% in 2017, rising to 13.65% in the first quarter of 2018. Return on assets has risen from 1.94% in 2013, to 6.16% in 2017, and 6.38% in the first quarter of 2018.
    2. Growth of the business through organic development. In May 2018, a third unit commenced commercial operation at Sarulla; one of the world’s largest geothermal power plants, which is located in Indonesia. The first unit at Sarulla commenced commercial operation in March 2017, with a second one following in October later that year. In December 2017, the Tungsten Mountain power plant in the US began commercial operation. The Platanares power plant in Honduras began commercial operation in September 2017.
    3. Strategic mergers and acquisitions, as well as the launching of new areas of activity for the company. Specifically, in March 2017, Ormat Technologies completed the acquisition of Viridity; one of the leading US companies in the energy storage industry. This deal has helped Ormat Technologies improve its financial performance by successfully integrating the two companies’ areas of activity (energy production and energy storage). In April 2018, the company acquired U.S. Geothermal Inc.; one of the leading US companies in geothermal energy. This deal will allow Ormat Technologies to increase efficiency and boost their geothermal energy sales.
    The company’s organic development strategy along with its mergers and acquisitions has seen the business expand, leading to stable growth in revenue over the last few years: 533.2m USD (2013), 559.5m USD (2014), 594.6m USD (2015), 662.6m USD (2016), and 692.8m USD (2017). Revenue is expected to continue along this upwards trajectory in the future.
  • Moderate risks to financial stability: the ratio of total debt to total assets is 36.86%, the ratio of total debt to EBITDA is 3.1, and the ratio of net debt to EBIDTA is a modest 2.93.

Investment period ends:
15/03/2019

Expected yield is calculated according to 90% capital protection and the price of the base asset at expiry, equal to 74 USD.

Technical Analysis:

Ormat Technologies’ share price is currently trading around the lower boundary of the long-term upwards channel, has already broken up the 50-day moving average, and is readying to exit the Ichimoku cloud upwards. Significant technical levels: 70.86; 65.94; 61.70; 57.69; 51.50; 44.05; 38.56; 31.68; 22.74; 14.49.

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