Ormat Technologies Inc (ORA)

[midastouch017]

Clal Finance analyst "troubled" by Ormat results
Yuval Ben-Zeev: Gross profit margin of 27.8% is worrying.

Erez Wollberg and Efrat Perez-Harpaz 27 Feb 08 13:16
Clal Finance Batucha analyst Yuval Ben-Zeev is troubled by the results published by Ormat Technologies Inc. (NYSE: ORA) today. He told "Globes" today, "In our opinion, it is hard to consider the financials as strong. We're very worried by the erosion in profitability."
In response to a question about the company's high revenue, Ben-Zeev said, "The high revenue came from the products segment, which is very volatile and has low profit margins. The gross profit was low and the revenue growth did not reach the profit line. The gross profit margin of 27.8% alone is worrying."

"Globes": If that is the case, how was Ormat Technologies able to report a net profit far above analysts' forecasts?

Ben-Zeev: "Lower than estimated financing expenses and tax receipts instead of tax payments made the difference. Looking at 2008, the company presented a challenging revenue forecast of $245 million in the electricity segment, which is higher than our earlier forecast of $235 million. The company's guidance of $70 million revenue in the products segment is higher than our forecast of $60 million. The company's total revenue guidance of $315-325 million represents 6-10% growth over 2007. This guidance is not as disappointing as we feared, but it's hard to say that it represents the rapid growth we're waiting for. The concern touches on profitability and we'll continue to focus on the meeting of operating targets."

Published by Globes [online], Israel business news - www.globes-online.com - on February 27, 2008