Q1 2020 Earnings Call
Good morning, welcome to the Ormat Tech Q1, 2020 earnings conference call, all participants will be a Muslim remote.
So states, placing all carpet specialist by pressing star keep all times here.
After today's presentation, there will be an opportunity to ask questions.
Question their press Star then one on your Touchtone phone.
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Please note. This event is being recorded and now let's turn the conference over to Rob check. Please go ahead.
Thank you operator hosting the call today are Isaac Angel Chief Executive Officer.
Rumble Ashar president.
He Ginsburg, Chief Financial Officer, and Smith, our lobby Vice President of corporate Finance and Investor Relations.
Before we begin we would like to remind you that the information provided during this call may contain forward looking statements relating to current expectations estimates forecasts and projections about future events that are forward looking as defined in the private Securities Litigation Reform Act of 1995.
These forward looking statements generally relate to the company's plans objectives expectations for future operations and our based on management's current estimates and projections of future results or trends.
Actual future results may differ materially from those projected as a result of certain risk factors and uncertainties.
For a discussion of such risks and uncertainties. Please see risk factors as described in Ormat technologies annual report on form 10-K quarterly reports on form 10-Q that are filed with the FCC.
In addition, during the call the company will present non-GAAP financial measures such as adjusted EBITDA.
Reconciliations of the most directly comparable GAAP measures and managements reasons for presenting such information is set forth in the press release that was issued earlier this morning as well as in the slides posted on the company's website.
Because these measures are not calculated in accordance with gap they should not be considered in isolation from the financial statements prepared in accordance with gap.
Before I turn the call over to management I would like to remind everyone that a slide presentation accompanying this call may be accessed on the company's website at <unk> Dot com under the presentation link that sound on the Investor Relations tab.
With all that said I would now like the turn the call over to Isaac Angel Isaac the call is yours.
Thank you very much draw and good morning, everyone. Thank you for joining us today, starting with slide five.
Our financial results for the first quarter of Twentytwenty demonstrates a strong start to the year.
Actually in terms of profitability.
The words, it's going to facing a global whos crisis, the impact and Durational, which is still uncertain.
The first quarter, we took steps to secure the safety of our employees.
Optimize our supply chain and enhance our liquidity position in order to support our growth plans.
These efforts to get to with the inherent stable in long term contracted portfolio for electricity segment have enabled us to ease the impact of 19 pandemic at this time.
Well all crop opens in manufacturing facilities are cooperating as expected.
Importantly, our effort to streamline operations and optimize power generation at the plant level continues to produce benefits.
Leading the margin expansion and increased profitability.
Our gross profit and operating income.
Also benefited from the received all $4.9 billion related to business interruption insurance claim for our <unk>, who know parkland compare to $1.3 million last year.
Excluding this benefit our operation income margin still increased more than 290 basis points on the lower total revenue demonstrating the improvement in our electricity segment operations.
The same quarter reinforces our confidence that or must isn't the right fit pads with a resilient business model Joel Robuchon revenue diversity and excellent team.
Let me spend a moment discussing all management transition process.
As previously announced I'll get retiring from my position as CEO on July 1st.
<unk> Shah, our president and until recently, our CFO will take over as CEO at that time.
If elected annual General meeting later this year all will be joining the board of directors as its chairman. Additionally, Oh Siggins work, just joint or month, as our new Chief Financial officer, enabling do wrong to focus his attention on the transition process, while assisting assay and.
I think we quickly up to speed.
This process is proceeding as expected and I'm confident that the leadership transition will be smoothed one.
Now I'll turn the call over to do wrong for review of the financial results before I provide an update on our operations there on.
Thank you Isaac and good morning, everyone.
Let me start to review of our results on slide seven <unk>.
Total revenues for the first quarter 2020, $100 million to $92.1 million down 3.5.
Our cost of revenue decreased 11.7 to $10 million to $110.3 million into first quarter 2020.
Oh thinking it increased $7.6 million in gross profit.
Moving to slide eight for more details on our electricity segment.
Revenues, you know waiting to see segment were $142.9 million for both the first quarter.
The other thing when he in 2019 and represented 74.4% Socal revenue for the most recent pool.
As shown in this low cost of revenue decreased by 6.2 million, though youth business interruption insurance income determination of pool at least that's in the fourth quarter 2019, and lower operating cost and some of <unk>.
Turning to slide nine.
For the segment revenues decreased 9% $47.4 million more plentiful and 7% local revenue for the first quartile 2020.
Well sites in the NFC stores and management services contributed $1.8 million of revenue for the first quarter when 20 compared to 4 million dollar last year.
This decrease was mainly driven by revenue from a onetime NBC project in a mile $2.4 million into first quarter was 29 team.
Moving to slide 11 for discussion of our total gross profit in mobs.
First quarter 2020, consolidated gross margin was 42.6% compared to gross margin of 37.3 person for the first quarter 2090.
The increase in gross profit and margin was driven by lower cost of revenue that's more than offset the yoga you most in the decline in revenue.
Well its life to it.
Gross margin for the intuitively Sigmas expanded yoga, you 50 per cent compared to 45.7% for the first quarter was 29.
Yeah, that's playing cost of revenues went down using insurance income and termination of police transaction both related to pool, though is with lower operating costs.
In the product segment gross margin will 22% into first quarter 2020, compared to 19.2% in the first quarter was 29.
The increase you through relatively low margins compressed recognized in the first quartile Philadelphia.
We expect continued improvement as we move forward Paulson normalized margins in this segment what between 20% to 27%.
[noise] energy storage and management services segment reported negative gross margin as anticipated.
Yeah, Yeah [laughter] 20.
Oh, 10% <unk> revenue compared to $19.6 million, 9.8% total revenue for the first quarter 29 pm.
The decrease was primarily attributable to business interruption incoming true.
$2.4 million, partially offset by 1.1 billion dollar cost associated with wonderful legal claims and its sentiment.
Turning to slide 14.
Operating income for the first quarter of 2020.
$61.1 million compared to 53.7 million dollar for the first quarter 29.
And increased 13.6%.
On Slide 15, you can see the breakdown of the operating income by state.
Turning to slide 16.
Net interest expense for the first quarter 2020 was $17.3 million decrease of $4 million.
This is due to an increase in interest capitalized to project of $2.2 million decrease in interest related to sales that's the benefit from $1.3 million and lower interest expense as a result of principal payments of long term that.
Turning to slide 17.
Provision for income tax for the first quarter of 2021 $18.1 million for an effective tax rate 37.2 person.
Compared to $14 million oil effective tax rate of 31 34.1 person for the first quarter fitting nicely.
The values between Compugen is primarily due to the mix AFFO income in various countries, we hire and lowest doesn't always that's right then defer those tests right in the U.S. and changes related valuation allowance certain countries.
Turning to slide 18.
Net income attributable to the company stuff for the was 26 million, though well 51 cents than they did show compared to $25.9 million or 51 cents per diluted share for the full scope that 2019.
Turning to slide 19.
Adjusted EBITDA was 100 to 6 million dollar for the first quarter 2020 up from the other than $1.8 million into first quarter 2019.
Reconciliation of EBITDA and adjusted to be though I'll provide an in depth ending slot.
Turning now to slides with.
Cash cash equivalents interested to test success in timberland is a small sosa 2020 was $319.8 million compared to $153.1 million as of December 31st 29 team.
The accompanying slide breaks down the use of cash for the first three month and demonstrates our ability to reinvest into business investing growth service that and return capital to our stock will go into full cash dividends.
Our long term and shorten desk as of March 31st 20, $21.4 billion net of deferred financing costs.
And it's payment schedule is presented on slide 21.
That was the interest rate on this that 4.7%.
Our net that as of March 31st 2020, well similar to year end and stood at $1.1 billion.
Turning to slide 22.
Let me speak briefly 12 financing activities since the beginning of the deal.
An authorized payment of a quarterly dividend of 211 cents per show pursuant to the company the pivoted policy.
The dividend will be paid on June 2nd 2022, stockholders afraid it'll add up the close of business on may 21st when explaining.
That concludes my.
<unk>.
If you know I think we'll be retiring from the see your position and moving to the board only on July 1st.
I would like to take this opportunity to think either for the last six years during which you draw format to excel in operation to excel in manufacturing to develop new technologies and to achieve new heights that have demonstrated you know adjusted EBITDA did grow from $227 million in fits.
2030 $385 million in fiscal 2090.
And when a person a lot I think I enjoyed working with you very much you will leadership your experience in your support throughout the.
And I look forward working week with you is that when you chairman of the board.
Now I would like to tell the call to Isaac for an operational and business objects Isaac.
Thank you very very much the wrong there <unk> I really appreciate your remarks.
Before I moved to operational review I want to spend a few minutes on an update on cope with 19 in its current in potential implication on Norman.
It's not mentioning my opening remarks in the first quarter, we took prompt steps to minimize the cover 19 implication on our employees in our business.
Our first priority was to make sure that all our employees are safe and they are able to navigate this crisis on her on harm.
The employees in our manufacturing facility in power plants continued their work working in separate shifts while minimizing physical contact between different shifts, we restricted external visitor and limited activities to critical and essential.
Our employees to were able to work remotely work from home where before this was required by the authorities and now we are preparing the gradual return to the office in locations were circumstances and local government instruction allow it.
We have not legal or followed any employees due to the corporate 19 and continue to pay food salaries.
We continue to our work with two local communities around our power plants, focusing on supporting on their health education and other needs raised by the by those communities in our ongoing communication with them also following the common tanking outbreak all my donated in 95 Mark too.
Local hospital, Reno and donated food packages to communities around our foreign power plants.
We are approaching our customers will need needed to notify them on on any potential implications and we are communicating routinely with the utilities as mentioned, we did not experience material impact on our results of operations during the first quarter of Twentytwenty. However, we.
Started to experience an impact in the second quarter of 220, which varies among business segments.
In the electricity segment, we expect that the impact of covert 19 to be limited to too long turn contracted nature instability of a revenue streams.
Despite this expectation on approve 17, we received from K.P.N.C.R. custom in Kenya, and noticed declaring a force majeure event due to the impact of corporate 19 in their later.
Aiming to reduce the recording contract contracted capacity from 150 megawatts 202 to 3.9 megabyte.
We believe that do not the the notice will not have a material impact on our expected revenue. Additionally, when opera 30, we received from the neck our customers on Doris.
Declaring or force majeure again due to the theme park or copied 19. We are currently evaluating the potential impact is not is on our consolidated financial statements. In addition.
Although currently not for scene are fritcher future growth in the electricity segment might be impacted by more limited funding for project in the implications of global and local restrictions on our ability to pick your raw material ship, our product and travel restrictions.
In our product segments. The recognition of revenue under contract is impacted by delays in the progress of turret potty projects into which our product and services are incorporated.
Our product revenue, maybe adversely impacted because of restrictions on travel and because of our customers decision process that can impact our efforts to sign new contracts. However.
We do expect a significant contract to be sign during twentytwenty, and we will be updating as it progresses.
Our energy storage and management services segment generate revenues, mainly from the three elephant salary services back to energy markets.
There has been a declining and celery services prices that petroleum, primarily by mild winter and low natural gas prices might also been impacted by covered painting.
<unk> impacted our energy storage facilities revenues.
Giving uncertainties regarding during and potential future impact of copied 19, we're continuing our efforts to expand our supply base and to validate additional sources for critical items.
In addition in order to support our capital expenditure and growth blends in April 2020 were raised in an additional $64 million toward the sale of bones and borrowed.
$50 million person to a long agreement to a loan agreement with one of our lenders.
As I mentioned earlier the steps, we took together with inheritance table and long term contracted portfolio for actors to segment have enabled us to ease the impact of covert 19 pandemic at this time.
Turning to slide 14, 24 for a long for a look at the generation.
Power generation now power plant declined, but 2.7% the one point 65 million Mega what hours in the first quarter of Twentytwenty.
The decline is attributable to load generation, it's a more power plants, mainly due to curtailments in Kenya due to cope with 19 in other curtailments in envy energy do the transmission line enhancements.
Turning to slide 25.
Let me spent a few moments providing an update on the situation cooler.
Of today.
The reconstruction efforts it cannot continue all the permits are required for the construction and operation of the substation have been received.
Elco continues with it effort to complete the upgrade of the transmission network and he is expecting the required P.U.C. approval on the field side.
Completed drilling of two production well one of which was blocked after it's floated while the other is ready to be connected to the power plant and is expected to enable us partial production as soon as the transmission lines will be rebuilt by Halko.
We continue to field recovery work, which includes redrilling and clean clean out of existing wells and drilling of new with US currently we expect gradual increase of production to 29 megabyte by the end of the year, assuming or permits are received.
We should network upgrade is completed and chilled recovery successfully achieved.
As we announced last quarter, we reach an agreement with Wellco inside a new P.P.A. that was file with the P.U.C. for approval.
The new P.P.A. extends the current P.P.A. terms.
Till 2052 and increases the current contract capacity by eight megabytes to Fortas's make up to 46 megawatts in total.
Snoopy P.A. will replace the current P.P.A. when the new 46, megabyte, Portland creatures commercial operation, which is expected in twentytwenty to.
Let me speak on the insurance situation for a moment like 26.
As discussed in previous call, we maintain coverage for property in business interruption scenarios provided by a consortium of insurers.
All the insurers accepted and start start paying for the cost to rebuild the destroyed substation. However, only some of the insurers are paying for the business interruption coverage in the first quarter any <unk>, we received a total set of $7.9 million.
Recorded income of $44.9 million of such proceeds in the first quarter.
While we're expecting additional payments from our insurers. We also filed a lawsuit which is being conducted one of our insurers.
Because of the end of March we received a total of $27.8 million, who property damage and business interruption.
Turning to slide 27.
Ordered to support our capital expenditures and grow plans, we increased and drew lines of credit any natural twentytwenty, we erase additional longtan debt.
At our listed on the slide can expect them to be on schedule.
Other than to elicit projects, we continue were efforts and investments in other prospects to earn the illegitimate eligibility to ptcs.
Turning to slide 28 for an update on our backlog.
So by 11, Twentytwenty, our product segment backlog was $96.5 million.
While this is down from period periods fluctuations in this segment of our business are not uncommon.
We believe that the declining backlog grew sales resulted in part from the impact of covered 19 and current concern of potential of potential customers to enter into a large commitment at this time.
We're still expecting a significant contract to be sign during twentytwenty and we will be as I said before we will be updating as it progresses.
Turning to slide 29 for an update on on energy storage and management services.
Our storage fleet, including Plumped and Stryker in PJM and high network in ISO New England are successfully operating with revenues in the first quarter that were impacted mainly by warm weather and slowing economic environment, followed by covered 19.
In April this year, we announced with our 10 megawatt Rabbit Hill storage facility in Texas commenced operation, providing ancillary services and energy optimization to the wholesale markets managed by airport.
Well, let's see the project in California, we are progressing with the permitting NEPC works as scheduled we may experience in a slight delay in interconnection due to the corporate 19 outbreak.
We continue efforts to expand our storage portfolio in April we signed a definitive agreement for the acquisition of the Pomona 20, Megabit battery storage facility for a total consideration on $47 million.
Kamada energies energy storage facilities contracted with Seoul, South, California Addison.
The transaction is contingent upon specific conditions related to the project as well as other customary closing conditions closing is expected during the second half of 20 to 20.
We continue to participate in new RFP to develop pipeline projects.
Due to the uncertainty around cobot 19, we update our future development target 200, 250 megawatts to be commission between Twentytwenty in Twentytwenty too.
Turning to slide 30.
Our expected capital spend for the rest of here of the year include approximately $135 million for capital expenditures or construction of new projects and enhancement to our existing power plants that management release for construction. In addition, we estimate additional 100 and how.
Hundred $7 million for the exploration and development that would not get release for cool pool construction maintenance of capital expenditures construction and development of storage projects and enhancement to our production facilities as detailed in this as detailed in the slide.
In the aggregate, we estimate total capital expenditures for the rest of twentytwenty to be approximately $242 million.
Please turn to slide 31st for the discussion of Twentytwenty guidance.
We are updating our full year twentytwenty guidance to the due to the uncertainty around cobot 19 duration and implications as well as due to the recent updating puno. We expect total revenues between 710 million and $740 million.
With the electricity segment revenues between 550 million and $570 million.
We continue to expect product segment revenues between 140 and $150 million revenues from energy storage and demand response activity remain is expected to be between 15 and $20 million. We are also updating twentytwenty adjusted EBITDA that is expected to be between 400.
Million and $415 million, we expect annual adjusted EBITDA attributable to the minor minority interest to be approximately $26 million.
Now on a personal note as I as mentioned before this is my last conference call as a CFO CEO of Ormat and I would like to think to all of our devoted employees customers and shareholders for their continued support during the last six years. It was an honor and privilege.
Ullage to serve as the CEO of such a wonderful company like Ormat.
And this concludes our prepared remarks, now and I'd like to open the call for questions. Operator, if you. Please.
We will now begin the question answer session Tasker question in their press Star then one on your touched held firm.
If areas and speakerphone, please pick up your handset for cancer keys.
So withdraw your question. Please press Star then too.
At this time, we'll pause momentarily to assemble our roster.
Our first question will come from Paul Coster with JP Morgan. Please go ahead.
Yes, thanks for taking my questions and by the way congratulations to the two executives on one on elevations of the board the other on elevations, we'll see a row.
It's going to be can be found.
So.
The.
The guidance that you've issued.
Guidance that you've issued.
Can you elaborate a little bit about Honduras and a carrier in particular why is it for instance, the you can see this reduction in capacity not having much impact on EBITDA from Kenya, and what is and what is now and guidance of 400.
Yes.
Thank you.
Thank you Paul and thanks for your remarks, and Chris falling in Kenya aim.
We have both capacity payment and energy payments and the capacity payment is the vast majority of the income coming from the power plant a the capacity payments remains.
As it is on those.
On those curtailment and the thing that is not pay is the energy.
On the 150 to 133.9 drop we are still negotiating in discussing with the utility if they have the ability to have to make this drop because according the contract they don't have though.
Our expectation is eventually it will be nonsignificant dropped on revenue coming from the okay.
And the homeowners Europe.
The adjusted so.
They just let us know on force majeure, they send us a regular force majeure laterals, we are sending to some of our customers in product segment.
And they don't have any place.
So over the stage.
We don't know.
In both cases, the useful the payment.
Receipts were withdrew lagging a little bit I believe recounts receivables were up.
Fairly significantly year on year.
It seems to pretty tight covert. So can you just kind of give us some sense of the overall dynamics with these two offtakers.
Of course.
If we start with Kenya, Kenya are lagging repayment for the last.
Five or six years.
Pretty much a reserve paying a eventually and there is no big difference.
On payments in Kenya sometime middle of year becomes.
How many days over there.
61 days and they close the gap.
So there is not much of a change in Kenya. The major change was that in the last few months, we are expecting card payments on a day time because of that covers 19, but as I said.
Based on the affecting energy payment and not capacity payments on on Europe.
I believe last year, so the paint our.
On time, they're not legging any payment since management changing in there.
I think it was a year ago or maybe more than that but they have a $20 million off of a debt, which is already a more than you do that was that was accumulated to with the previous management and we are in place.
Others.
We are in a process of an arbitration. They don't have any claim against the $20 million not claiming that it's not do they are simply saying that they're waiting for.
Funding coming from IMF, and then they will likely close the gap or no.
Yes.
Okay got it lost the situation with worker.
Got it. Thanks last question on the projects that you're looking to deploy all over the next 18 months or so is there any risk and can you quantify the risks that you know a project gets pulled.
We have most of the project.
Our with.
Scholar one portfolio projects until the end of Twentytwenty too.
And the those projects are already lined up when we expect to be online and on time those projects and on top of it as we declared last quarter at the end of the year.
And we are building PTC projects that will be a less we will sign additional.
And portfolio projects with Cup our others.
Or other TCAD then they will be sold at the beginning at the market price.
Right, Okay and on these projects are also.
Plant.
Thanks for chronic thank you.
Yeah.
Our next question will come from lower came with Oppenheimer. Please go ahead.
Yes. Thank you. This is question on for now I appreciate you taking our question.
If we could just follow up on the PTC comment that you just made last week and our Santander cuts from Congress.
Permanent treasury indicate that they don't anticipate modifying the over the near future on eligibility requirements for projects Eligibles for production tax credit you know the thought is that developers will get more time to complete work on those projects.
So you know what are your current expectations in terms of exploration work on Capex. Your next year to qualify projects for PTC eligibility and how would you be helped by having that extended timeline.
Okay, Christine and you're right there were.
There was some information on that last week, but it was mainly on solid solar and storage.
And when sorry, and not necessarily Anja krammer, we're hoping through our lobbies that it's going to be also on on the on geothermal in any case.
We have a list of projects that were.
Uh huh.
Don't know the slide number.
On slide 27, that's the articulate the projects that are going to be ready for PTC is here, obviously, if for PTC will be prolong for Twentytwenty. One and further then we will have more project that will qualify.
PTC.
So far because.
The improvement in the liquidity, we don't see any issue.
On supporting those PTC project that will declare.
Okay. Thank you.
And then can you update us on that feasibility study in Indonesia, where the Dan a 110 megawatt you thermal expansion and went to that study be complete and what should we anticipate a from that.
As a matter of fact.
The Aegion project is the.
Progressing.
Better than planned we already and we already hit on the first a well drilling the resource much earlier than expected.
So according to our geologists the resources is there.
And the plan was to finalize it by Twentytwenty too.
Until Twentytwenty tree and we believe we will be on time.
And tried to be earlier.
Okay, Great and then the last question for Us for Corona when do you anticipate the transmission upgrades will be complete and has the utility works, it's actually begun and.
What is the impact overall from covered 19 aside the timeline.
Okay and look it is an ongoing.
Story over there and they the first plane was that is going to be ready by November 19.
And then age was strong long by the P. you see because the public hearing to the beginning of this year.
Now.
The public hearing was announced.
So far we don't have any any objections, so the expectation is that.
Healthco will be erecting the the Paul and the transmission by Okay.
If it will be happening then we will be more than glad to start delivering electricity a.
Starting with the transmission line.
I am expecting to lower electricity much before that but unfortunately this will be on.
Yeah, and as a service transmission line and a very low amount. So we won't be paid for it but at least we will test the power plant the resource.
But pretty quick on any specific.
Delays, owing to construction availability or anything related to pick of an ATM.
Yes, so far nothing that we that we are anticipating because we were ready and before time with all the with everything that we needed.
So I hope there will be there won't be any last moment to resource issues are still holder.
And that something will happen as I said before we will be flowing electricity.
Utility to be sold sometime around those.
Okay. Thank you for questions.
Thank you.
Again, if you'd like to ask a question that as Star then one Star then one to ask your question.
Our next question will come probably Jeff Osborne with Cowen <unk> co. Please go ahead.
Hi, Good morning, guys a couple of questions on my end.
One just circling back to Kenya, I think beyond that curtailment and the receivables I think if my memory is right. The other issue that some investors had there was that the ongoing litigation is there anything you can update us as it relates to the historical tax receipts I think they are claiming U $200 million per back taxes.
In the hi, Jessica the wrong basically receive the assessments from the care Ray.
On various a items.
And and the all of these assessments. So you know based on our understanding the based on our auditors and the legal advice that we got all.
Totally not the relevant or correct to the operations also.
Falls Kenyatta, United in Kenya, they have the much more important than just to Wal Mart.
So is that the assessment.
We are responding to really.
In a few weeks.
And then we'll start to know the.
Process, where we are feeling it.
And just based on our understanding of the Kenyan tax law as well as the our advisors. The low married to any of these the claims to the there.
Arguing.
Yeah, I would say that at least.
A few of them, where they have ordered the argue with us in the past.
And then they went back on them so.
We're not the show a exactly what were the coming back on these items.
But.
We will work in or within the Canyon.
The process, starting you know with the and alternative the dispute resolution process and then it's still needed in our go to.
The relevant the legal process.
Got it sounds like it will be ongoing for quite some time.
Is there any other deter you from the feels like that.
I was there any other deter you can give us a as it relates the capacity versus energy payments you know when you look at I think the average price there is roughly 100.
And 19 or $120 a megawatt hour is there a way to think about the risk around curtailment.
Is that 90%.
Capacity in 10% energy or any help you can give us in terms of magnitude I understand.
Isaac indicated that the majority of his capacity and felt comfortable would be paid but is there any finer point that you can put on that.
As the magnitude.
Yeah, R&D a year, you're not correct with the numbers the Jeff.
There are a bit lower than what you just there, but the 90 enter the 90 to attain it's quite accurate.
Okay.
And then is there any.
Update on ensure Jeff sure.
Well I'm, saying if you look on the numbers you know the capacity pays regardless of the actual generation of curtailments. So whenever they do make curtailments and the generation is lower the capacity still doesn't change. So that you know can tweak to on a specific quarter the.
Calculated average.
Price per megawatt hour in reality in the actual price when they are taking the full energy is more in the areas of the 90, the taking both capacity in energy and but on a specific quarter. The curtailment, all some kind of an outage or for maintenance or anything like that it will do.
Average can go up a bit.
Got it now it's helpful. I appreciate the clarification there.
Maybe just switching gears two other quick ones I hope on insurance side. So I think you have.
Mentioned in the slides 27.8 million spin received if my memory is right the total.
Actually receive I believe was 100 million.
Is there any.
A sense of cadence on win additional insurance checks would be coming and similar to what you receive this quarter.
And the total policy as he said is about a 100 million.
Daughters, and we'll do the receives a some more small amounts in April and we are discussing.
It is bids with different layers the different insurers. So we are discussing the with the other insurers.
Yeah.
On some kind of settlement.
But there was one ensure that the.
Wasn't willing to discuss settlement and the with soon him.
And honestly I can't understand how you know multiple ensure companies do pay.
The the policy in one decided that it doesn't work.
But the we'll have to see that through the the legal costs if needed.
Got it and then they just to be clear the guidance does not include any insurance as that is it safe assumption.
For the rest of year.
The guidance you know includes you know business interruption similar to what a we usually in may.
And with Qunar.
So it's not doesn't come a all in the revenue, but there are some small numbers in on that.
Might impact the.
Okay. My last one for you to run it how should we think about tax tax rate for the year.
I think tax rate you know this quarter was around 37% and.
No.
Yeah.
It is very hard to to focus the tax with the changes with the specific tax status that so much paired with the valuation allowance the past the valuation allowance the.
That would have a you know the best the estimate going forward usually is what they were recorded in the last the period as a good the estimate going forward, but it obviously can the third between the.
The countries and the year, though is the tax rates are different in the different jurisdictions.
Got it. Thank you that's all I have.
Thank you.
This concludes our question answer session I would like to turn the conference back over to Isaac Angel for any closing remarks.
Thank you very much.
Brent and.
As I said before and we are in a very.
It's strange and difficult era.
And then no doubt that there will be a markets and companies.
Which are going to change it completely during this era.
Personally believe that almost almost because of a very specific ingredient.
Very well is very good position to go through this era, a strongly even better.
Yeah, we could devoted employees very experienced management team with the support a very full support of aboard.
Very long term contracts, which are already signed energa are going to be sign in the future.
And a strong cash flow.
I'm very optimistic that we will be able to go through this difficult era, regardless, if it's gonna be ending this summer or it's going to take another you to go and thank you very much for the ongoing support.
I have been I'd say.
[music].
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.