Ormat Technologies (ORA) Q4 2010 Earnings Call February 23, 2011 10:00 am ET Executives Joseph Tenne - Chief Financial Officer, Principal Accounting Officer and Chief Financial Officer of Ormat Industries Ltd
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Yehudit BronickiThanks, Marybeth. Good morning, everyone, and thank you for joining us today for the presentation of the summary of 2010 and the outlook for the near future. 2010 was highlighted by strong production in the Electricity segment. Year-over-year output increased by more than half a million megawatt hour and segment revenue grew by over 15%. Despite the number of unique challenges at North Brawley electricities in plants for long-term growth continue unimpeded. As Yoram will explain for later in the call, we have made considerable progress in our construction, development and exploration activities. In parallel, we raised the capital required to support such activities. Let me turn the call over to Joseph for a review of the financial. Yoram will review our operations and as usual, following my remarks, we will open the call up for Q&A. Joseph? Joseph Tenne Thank you, Dita, and good morning, everyone. Beginning Slide 5, our Electricity segment revenues for the year were $291.8 million, a 15.5% increase compared to $252.6 million in the previous year. The increase in revenue is due to 14% increase in total electricity generation as a result of additional generation and capacity with Puna, North Brawley and Mammoth being the major contributors. The increase also positively reflected by a slight increase in the average revenue rate of our electricity portfolio. In our Product segment on Slide 6, revenue for the year were $81.4 million, a 48.9% decrease from $159.4 million in the previous year. This decrease in our product revenues is a result of a decline in our Product segment customers' orders which we have discussed in previous calls. For the year ended December 31, 2010, total revenues were $373.2 million, compared to $412 million in the previous year as shown in Slide 7. Moving to the next slide, the total gross margin was 20.8%, compared to 29.2% last year. Gross margin of the Electricity segment was 17%, compared to 29.1% last year.
As anticipated, the decrease in gross margin derived mainly from gross margin loss of $24.6 million in North Brawley and an increase in the depreciation amount related to the acquisition of the Mammoth complex.A $25 million out of deferred revenue of the Mammoth complex and the acquisition date of the additional 50% ownership, which was allocated to the existing plant is being depreciated until the complex is repowered in 2013. However, in the mean time, this cost will continue to negatively effect our gross margin. Read the rest of this transcript for free on seekingalpha.com