Ormat Technologies Inc. ORA recently announced the commencement of operations in the second unit of its Sarulla geothermal power plant, NIL 1, located in Indonesia's North Sumatra. Notably, the second unit of Sarulla geothermal power plant is operated by Sarulla Operations Ltd. (SOL) and it successfully initiated operations on Oct 2.
The Sarulla geothermal power planthas three units of 110 megawatt (MW) each that utilizes steam and brine extracted from the geothermal field to increase the power plant’s efficiency.
SIL, the first unit of the geothermal power plant came online on Mar 17, 2017 and the third unit, NIL 2, is under construction and is anticipated to initiate operations in 2018.
Geothermal Energy Holds Promise
Apart from progressing steadily with the engineering, procurement and construction work for the third phase of the Sarulla plant, the company has several other projects lined up both domestically and internationally.
Ormat Technologies continues to advance the geothermal technology and help its clients to maximize returns from their geothermal resources.
In the United States, it is currently developing the 24 MW Tungsten Mountain geothermal power plant in Nevada. The project is expected to come online before the end of 2017. In Nevada, the company’s Dixie Meadows project is progressing well and is expected to start commercial operation later on in 2017.
Internationally, the company is progressing steadily with repowering projects in Kenya and Guadeloupe, both expected to begin operations by the end of 2018 or early 2019.
The company’s order backlog, as of Aug 3, 2017 is pegged at $192 million, with new orders worth $50 million, mainly from contracts won in Turkey. Together with the existing projects, the company looks well equipped to benefit from its backlog in New Zealand and other projects.
We note that Ormat Technologies has been successfully delivering and meeting its ultimate goal of improving profitability driven by high gross profit and adjusted EBITDA, as evidenced by its steady performance in the second quarter.
With the company strong backlog of projects that are currently underway and other projects in the cards, Ormat Technologies looks well poised to benefit and perform better as it moves into the next quarter.
Shares of Ormat Technologies have returned 7%, outperforming the industry’s gain of 4.5% in the last six months.
Ormat Technologies currently carries a Zacks Rank #2 (Buy).Better-ranked stocks from the broader sector are First Solar, Inc. FSLR, Enbridge Energy, L.P. EEP and JA Solar Holdings, Co., Ltd. JASO, all of which sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
First Solar delivered an average surprise of 524.24% in the trailing four quarters. Its 2017 estimates have risen by 322.6% to $2.24 per share in the last 90 days.
Enbridge Energy delivered an average surprise of 22.83% in the trailing four quarters. Its 2017 estimates have risen by 5.5% to 77 cents per share in the last 60 days.
JA Solar delivered an average surprise of 524.24% in the trailing four quarters. Its 2017 estimates have risen by 6000% to 61 cents per share in the last 60 days.
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