Ormat Technologies surprises with Q2 loss

CEO Dita Bronicki said, "The low generation and high operating costs at the North Brawley power plant had a significant impact on this quarter's results."

Geothermal energy company Ormat Industries Ltd. (TASE: ORMT) subsidiary Ormat Technologies Inc. (NYSE: ORA) reported a net loss of $1.5 million for the second quarter, or a loss of $0.03 per share. Analysts had expected earnings per share of $0.07.

Revenue was $96.3 million.$3.2 million less than the corresponding quarter of 2009. The company said results include a 15% increase in revenue in its Electricity generation operations, which was offset by expected reduced activity in its product segment from a record high during 2009. The company's product segment designs, manufactures, and sells equipment for geothermal energy plants.

The net loss is a turnaround from a net profit of $16 million in the corresponding quarter of 2009. Ormat attributed the decrease to high costs of its North Brawley power plant, a $3.1 million write-off of capitalized costs associated with an exploration prospect which it decided not to pursue, and an increase in interest expense.

Ormat CEO Dita Bronicki said, "The low generation and high operating costs at the North Brawley power plant had a significant impact on this quarter's results. Presently, the plant is operating at a stable output of approximately 20MW. We expect financial improvement as the plant's output increases toward 50 MW later in the year. We expect breakeven results for North Brawley sometime in 2011. With the strong results from the rest of our plants and the success of the enhancement programs in other facilities, most notably Puna, we expect the overall results from the electricity segment to improve in the coming months."

Bronicki added, "We are updating our guidance to reflect the consolidation of the Mammoth complex revenues starting August 2010 and expect 2010 electricity segment revenues to be between $285 million and $295 million." The company expects product segment 2010 revenue to be $75-85 million.

Published by Globes [online], Israel business news - www.globes-online.com - on August 5, 2010

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