Q4 2020 Ormat Technologies Inc Earnings Call
And the corporate finance and Investor Relations.
Before beginning we'd like to remind you that the information provided during this call may contain forward Lucky looking statements relating to current expectations estimate forecasts and projections about future events that are forward looking as defined and the private securities litigation reform that of 1995.
These forward looking statements generally relate to the company's plan objectives and expectations for future operations are based on management and current estimates and projections future results are 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 the risk factors section as described and or Matt technologies Annual report on form 10-K, and their quarterly reports and form 10-Q and are filed with the SEC.
And addition, during the call the company and will present non-GAAP financial measures such as adjusted EBITDA.
Reconciliation for the most directly comparable GAAP measures and management's reasons for presenting such information is set forth and the press release that was issued last night as well as and the slides posted on the company's web site.
Because these measures are not calculated and in accordance with GAAP. They should not be considered in isolation from a financial statements prepared in accordance with gap.
Before I turn the call over management and we'd like to remind everyone that the slide presentation accompanying this call may be accessed by the company's web site and Hormats Dot com under the presentation link that is found and the Investor Relations tab.
With all that said I would know and like to turn the call over to Durand Blushed sharp throne. The call is yours.
Thank you Rob and good morning, everyone. Thank you for joining us today.
Will must continues to successfully navigate the challenges of the Kobe pandemic, delivering year-over-year improvements and overall profitability and making significant progress and executing our long term plan to increase our geothermal still.
Storage and hybrid solar geothermal capacities.
For the year, we met that will adjusted EBITDA guidance during lost to improve gross margins within our electricity and so citizens.
Importantly, we achieved profitability and our energy stores segment, and despite the flow business and growing rapidly.
We also strengthened our balance sheet swear combination of long term debt and and equity offering.
We achieved this will bring in Pune back online and successfully resolving all pending Kenya tax assistants.
These achievements and meets a global environment facing and president challenges from the Covid pandemic positioning us for long term success.
This year, we lay the solid foundation to accelerate the growth of our electricity and storage.
Our expectation is.
2021 will be a significant buildup you as we work to bring new geothermal energy storage and solar PV projects online.
These projects are expected to increase our generation portfolio by 50% to approximately 1.5 gigawatts by 2023 with a significant contribution coming from our energy storage business.
This next step up step up and the size of Falvo portfolio represents approximately 29% interest in our geothermal and solar capacity and up to approximately 400% interest you know energy storage assets by the end of 2023.
As a result of hall ambitious plan, we estimate that we would reach and annual run range of $500 million and adjusted EBITDA towards the end of 2022.
We expect to continue to grow as we move forward with our plans in 2023 and on.
I will turn the call over to ask me to review the financial results before I provide further update on operations and future plans.
<unk>.
Thank you for your own.
And let me start my review for financial highlights and slack size.
Total revenue for the full year 2020, $705 million down five five per cent from per year.
In the quarter revenues were down six 8% over last year.
Both in the full year and and the quarter and the drivers for the day, Chris was the product segments, which was impacted by COVID-19.
Fully and Twenty-twenty consolidates gross profit was 276 $3 million.
Resulting in and gross margin of 39 two per cent three.
310 basis points higher than and 2019.
Same increase noted in the fourth quarter with our growing electricity and energy stored segment driving the poor performance.
2020, and it with the net income attribute to the company stock holders of $85 $5 million.
Diluted EPS for 2020 decline by 4% compared to last year.
Mainly impacted by a non recurring tax benefit recorded in 2019.
Excluding the standard benefit diluted EPS increased by 30%.
For the quarter diluted EPS English, 62.5% to 39 cents per share.
And just that EBITDA and Greens nine three per cent to $420 $2 million and 2020.
For the quarter. This was seven per cent increase compared to 2019.
Moving to slide six.
Breaking the revenue down the electricity segment revenues slightly increased compared to 2019 supported by contribution from you and its capacity at our steamboat complex and.
And better performance of other projects and our portfolio.
Offset by lower generation idiotic facilities.
And English curtailment, and and cargo complex, mainly due to COVID-19.
And the product segment revenue declined 22.5%, representing 21% of the total revenue and 2020.
The decline year over year is expected to continue and 2021.
Is the continuing to global pandemic limited and still limit our ability to sign new significant contracts.
And it'll destroyed segment revenues increased 7.6% year over year $215.8 million and represented 2% of our total revenue for the full year 2020.
This growth mainly driven by revenues from the acquired from one energy storage assets and the contribution of rabid here in Texas.
And the fourth quarter day electricity segment revenues grew 1.3 per cent to $146 million.
While product segment revenue degrees, 37.5% to $27 million and the fourth quarter of 2020.
Energy storage segment revenue, where five $8 million and guessing 36% year over year compared to for $3 million and the fourth quarter of 2019.
Let's move to slide seven.
Gross margin for the electricity segment for the full year expanded year over year 244, 6%.
For the fourth quarter gross margin was 45.2%.
The improvement was primarily due to improved efficiency and some of our power plants as well as decrease and less expensive related to the poona due to the termination of the lease agreement.
Electricity gross profit in the full year 2020 was positively impacted by seven $8 million and business interruption insurance claim payments.
Compared to $9.2 million and 2019.
And the product segment gross margin was 22.4% in the full year of 2022.
Per to 23.6% and and per year.
The product segment gross margin and Twenty-twenty was impacted by higher cost of revenue related enough a project that we built and New Zealand.
Which was impacted by among other things restrictions and limitations associated with COVID-19.
And the fourth quarter, we saw and English and gross margin and the product segment of 160 basis points to 29.8%.
Energy storage segment reported a positive gross margin of 11.1% for 2020 compared to a negative gross margin and 2019.
The improvement was probably driven by our acquisition of the Pomona energies to adjusted.
Turning to slide eight.
And the electricity segment generate 92% of the total adjusted EBITDA in the full year of 2020.
And electricity secondly, adjusted EBITDA increased 11% over last year.
The product segment generated seven per cent of the total adjusted EBITDA for the full year of 2020.
And storage segment reported for the first time, a full year positive adjusted EBITDA of $3.2 million, including $1.7 million and the fourth quarter.
Is that all noted in the opening remarks, we expect and continuing increase in EBITDA as we grow these statements.
The key takeaway here is that all of the three segments and are contributing positive adjusted EBITDA.
And the conciliation of EBITDA, and adjusted EBITDA and provide any day appendix slides.
Turning to slide nine.
For the for your Twenty-twenty, we successfully raised approximately $760 million in the aggregate, including $340 million net profits from the issuance of common stock.
And $290 million profit from the bond series for and approximately $130 million of proceeds from senior unsecured loan.
Our net debt as of December 31, 2020 was $920 million.
Cash and cash equivalents any restricted cash and cash equivalent as of December 31, 2020 was $537 million for.
Compared to $153 million as of December 31st 2019.
The accompanying slides breaks down to use of cash for the 12 months and illustrate our ability to invest back into business service the debt and continue to return capital to our shareholders and form of cash dividends.
From cash generated by operation.
Our long term and short term debt as of December 31, 2020 was one point for $6 billion and.
Net of deferred financing costs.
And it's a payment schedule is presenting for looks like 31 in the appendix.
The average cost of debt for the company is currently for 7%.
On February 24, 2021, and the companies Board of directors declared approved and authorized a payment of quarterly dividend of 12 cents per share pursued that accompany dividend policy.
The dividend will be paid on March 29, 2021, and two shareholder of records of the cause of business day on March 11th 2021 and.
In addition, we expect to pay dividends of 12 cents per share and the next three quarters, representing and 9% increase over Q3 2020 dividend.
That concludes my financial overview, I would like now to turn the call over to the room to discuss some of the recent developments and our growth plans for the next three years, Iran.
Thank you awesome.
Turning to slide 12 for it look at our operating portfolio.
Our generation and our power plants declined by 3.1% compared to last for Ya.
This decline is mainly due to the low generation at our oil facilities and interest curtailment, you don't call your power plant.
However, revenues afforded Felicity segments remained unchanged with higher average range per megawatt hour of 89 $6 compared to 86.6 for last year.
We adjusted to generation capacity or for existing policy and based on the performance. This year is details on the slide and the current portfolio stand at 932 megawatts compared to 914 megawatts last year.
This year. The main edition was 19 megawatts and steamboat complex for the completion of the steamboat enhancement.
As noted on slide 30, Pune revealed operations in November 2022, and a half years after the eruption for the killer volcano.
Currently low output relative to the generating capacity before the eruption.
In November for now.
10 megawatt generating capacity and now it is operating at 13 megawatt.
We continue our field recovery work and drilling of news and we expect to not to increase power generation during the second quarter of 2021.
With target close close to full production pulling up by the middle of this year.
On the shores from for the entire 2020, we call it for $29 $1 million insurance proceeds to seven $8 million very cold and the cost of revenues and the balance and other operating income.
We're still working with our counsel to collect the risk of what we believe should be paid for us.
Turning to slide 14 for an update on our international fun, and specifically and kidney.
As discussed earlier, one of the impact Covid head on operations and Kenya relates to interest curtailment, thereby K plc, which was the main driver to reduction and revenue of approximately six $5 million compared to prior year.
The curtailment continued into the fourth quarter, and and lower frequency compared to the first three quarters and 2020.
We are also encouraged by the improved collection from K plc that continues reducing the overview amounts.
Also and Kenya, where and important achieve achievement, concluding all open tax audits with the Kenyan tax authorities and reached a febrile favorable settlement related to the 2019, three tax assessment or regionally totaling $200 million.
The settlement agreement extended period for the issues addressed within the main assessment to cover the period from 2013, So 2019 for.
For financial impact was recorded and the fourth quarter of 2020.
Turning to slide 50, and for an update on our basketball.
Our product segment has been the part for business most impacted by the COVID-19 and Amy.
With our customers projects around the world being delayed.
However, we believe this is a shorter phenomenon and.
And Turkey, and you're free to install it was announced that although it is lower than the previous feeling.
We expect the market to adapt to it and we anticipate new potential projects and Turkey, and the coming months.
As of February 24, 2021, our product segment backlog was $33 million.
We anticipate continued weakness and our product backlog and a result of 2021 guidance for these segments revenue is significantly lower than recent years.
Our business model is resilient and a key part of it relates to a vertically integrated structure.
Which enables us to better allocate our manufacturers capacity and resources, while focusing on internal initiative to support our electricity segment growth.
We started to see this shift already and the second quarter of 2020 and and the full year 2020.
Inter segment's revenues interest for the 30% over 2019 and 130% of a 2018.
Omar is the only vertically integrated company and the geothermal industry.
We can efficiently transition for manufacturing components for sales policy customer to develop components for a company on projects.
This means we can bring projects online more effectively by using internal resources and expertise.
This will also extent or energy stores segments as well as our construction expertise and you've tapped to help development at the energy storage for it.
And as a result, we are also able to fill capacity at all manufacturers segment, avoiding and utilize expenses.
However, we firmly believe that the pandemic debates, we will see increasing demand for products around the world.
Partially offsetting the weakness of the product segment.
Has been a consistent improvement and restored for business.
And it has storage discuss discuss and slide 16 continues to evolve to grow and to become more profitable, it's actually presented and his financial involved.
This year, we commissioned the rubbish Hilton megawatt storage facility, and Texas, which provide a glittery services and energy optimization to the wholesale market matters, but.
On February 13th whether can this conditional and takes us cause abnormal reduction in electricity supply along with record demand for electricity.
Some assess that events. This are unfolding in air force represents one of the worst shops to use electricity markets and the recent decades.
The extreme weather conditions resulted and shortage of electricity supply, which caused electricity and our prices to which record of thousands of dollars per megawatt hour.
Probably all time high.
Starting February 16, and until February 90 hour, obviously and facility could not child from degrees due to the energy emergency alert, which resulted and limited ability of the rubber sill storage facility to provide our services.
You know in order to reduce whole mentioned free and increase our contract with drugs and 2021 and the company side side, the head transaction for 80% of the volume at a fixed rate X.
Exchanging the floating Oh, if our and revenue for fixed I wasn't revenue.
At the end of 2020.
The inability to operate the facility. During these times, we expect to record and Q1 financial results after approximately $11 million of non recurring loss associated with this age.
Disadvantage fill a full day and our goal is to minimize all works for me.
This year and we also completed two acquisitions, one of and operating facility and California, Pomona that shifts the EBITDA and margins and this business from Los to profit.
The second acquisition was and acid under development after and Texas that will contribute contribute for the growth of this business.
Before I moved to discussion on our gross plan I would like to briefly discuss our commitment to sustainable future and step. We took this year to support the environment, our computer and community and our employees and slide 18.
Sustainability is the call for business and our way of life saving emissions by generating clean energy that replaces the meeting conventional for the for energy.
Our goal to increase our clean energy portfolio aligns with sustainability values and further sales emissions to the environment globally.
And 2020, and the health and safety of format employees, our contractors and the communities and which will leave work and do business.
Out of utmost importance.
Throughout this global from there my homework for must follow strict protective measures necessary to safeguard every stakeholder health and safety.
This includes adhering to all government regulations, and maintaining clear comprehensive plans and protective measures for employees, who work you know energy plants manufacturing facility offices and as well.
We believe that our success depends in large part on our ability to create and engaged workforce.
Accordingly, investing and our employees is a key element of our corporate strategy.
Since the beginning of the pandemic outbreak, we did not lay offs and the employee due to COVID-19.
And the communities. We operate we have created special social projects aiding thousands of people and donating for and medical supplies.
Also we presented personal protective equipment to hospitals, and Kenya, Guatemala on to us and the U S.
Moving for flight Wednesday.
As I mentioned at the beginning of the school 2021 will be significant build up your.
Comprising mainly of geothermal project.
Are operating portfolio stance the day it over one jiegu comprising of 873 megawatts of geothermal.
53 megawatts of rig.
Seven megawatts of hybrid solo and 73 megawatts of for energy storage.
We have a robust growth plan to interest by 2023 hour total portfolio, but almost 50%.
With a significant contribution from the energy storage business is details in the fall and slide.
This interest is subject to obtaining all permitting and regulatory approvals required as well as complain and the development and construction of these partners is plan.
Moving to slide 21.
Oh medium term goal is to increase the capacity of the electricity signal.
Hello, and previous estimate for approximately 170 megawatts and of 2022, two between 250 and 270 megawatts by the end of 2023.
Representing a total interest of up to 29%.
And a rapidly growing energy stored portfolio, we're planning to enhance our growth and to increase our portfolio by up to approximately 400 per cent and.
At between 200 megawatts to 300 megawatts by the end of 2023.
This represents a significant interest compared to our previous growth August of 80 to 175 megawatts, we set for 2021 23.
Additionally, we believed that we may see additional increase coming from potential M and asked them.
The next slide displays 14 projects underway that comprised the majority of 2023 growth gross plants.
We already secured local PPA for the majority of these projects and Ah from the resort viability.
While our liquidity segment is navigated the pandemic will we had some true.
Challenges and changes to the timing of projects coming online. The current expected commercial operations of city for and Hebrew is during the first half of 2021 and.
And change it was caused mainly due to delays and permitting you for COVID-19.
Slide 23 shows the geothermal Python, we hold for long term goals. These other additional prospects the tongue and different stages of exploration.
Moving to slide 24, and 25 and the second lay off how gross plants accounts from energy stores segment.
Slide 20 for demonstrates the energy storage facility, and we have announced or started construction.
And the other projects include and you know grassland are and different stages of development and the release for required site control and execution of interconnection agreement.
All obviously subject to economic justification.
Our current Python presented and slide 25, which is updated frequently and sold thirty-three names potential projects with a total potential capacity of over one jiegu.
Which are and different stages of development as I mentioned earlier and we believe that we can develop from this potential pipeline between 200 to 300 megawatts by the end of 2023.
Mainly and takes us and New Jersey and California.
This target excludes.
And he add ons for them and activities that we are proactively seeking.
Moving to slide 26.
The significant growth and both of our electricity and stores segments will require robust investments over the next couple of years.
From this growth, we have over $900 million of cash and available and restricted cash and lines of trades.
Our total expected capital spend for 2021 and clothes approximately $450 million for capital expenditure for construction of new projects of geothermal solo and storage and.
Enhancement for existing geothermal power plant management for the for construction.
Maintenance of capital expenditures, including a work with the porno Powerplant and enhancements for production for facilities.
Is this whole inside for it to end up and Texas.
Overall, omotic, what position with excellent liquidity.
And and put access for additional capital from future initiatives.
Please turn to fly twenty-seven for a discussion of how 2021 guidance, we expect total revenues between $640 million and 675 million.
With electricity segments revenue between 570, and 580 million total.
The electricity savings include service $2 million from the total apartments in Hawaii.
Swimming world without plan and when you're close to for operations in mid 2021.
We expect product segments revenue between $50 million to $70 million.
Revenue for energy storage is expected to be between 20 and $25 million.
We expect adjusted EBITDA to be between $400 million and quality and $10 million we.
We expect annual adjusted EBITDA attributable to minority interest to be approximately $32 million.
Moving to the last line.
The winter of 2020, and 2021 brought a wave of beneficial legislation to the renewable energy industry and the United States in December the Congress package included extensions to the production tax credit and investment tax credit for renewable projects, including geothermal solar and storage and recovered energy project.
While the day December legislation did not provide a tax credit for standard on energy storage facilities.
Storage facilities related to the functioning of the solar facility will determine to be eligible for the ITC and we believe that are often energy storage facility and benefit from it.
In addition, safe Harbor provision for noble energy developers to claim this tax credit was extended from five to 10 years.
This and has fix ability will include renewable developers to get construction going on more projects over the next day.
Finally, a few days ago, the California public utility Commission CPUC issued a ruling and requesting comments on a proposal for 1000 megawatts each of new geothermal and long duration storage for human between 2024 and 2026.
With a table and have the support 2021 is going to be a significant build appeal accelerating our growth and the storage and electricity with a goal to which $500 million of annual run rate for adjusted EBITDA towards the end of 2022 that we expect to continue to grow as we move forward with our plans and 2023.
And animals.
This goes show that a way to deliver accelerated profitability growth and the geothermal business is also applicable caused storage business.
This will happen by applying applying or vertical integration approach mitigation. The partial inherent mentioned please to diversification using a stable geothermal portfolio as a solid foundation for storage business and maintaining a strong capital position with access to various sources for Scott.
We're planning to conduct and analyst day, Leslie and May of this year, when we expect to discuss and more details. The growth goes you know electricity and stores segments and our plans achieving the adjusted EBITDA God.
This concludes our prepared remarks, now I would like to open the call for questions operator.
We will now take and the question and answer session to ask a question you may start and one on your Touchtone phone.
You're using a speaker phone please pick up your hands.
Therefore, pressing the keys and.
In fact anytime your question has been interest and you would like to withdraw your question. Please press time too.
This time, the repast momentarily to assemble a roster.
The first question comes from Julian Tomorrow and smoke.
For for my account. Please go ahead and.
And can I interest is anya and doing and.
Furniture and huh.
Alright, Sir.
And to ask about that day.
And so you have 30 thing and pass that.
Could you talk a little bit and patterns opportunities and Ah rescheduled for Ya.
And he says things and how do you think of that and specifically how comfortable I am taking on maximum package contracted extend okay. And then what new markets are you looking at getting likelihood and I start and evening.
Oh.
Hi, we're looking at we're focusing as we said on the three main.
Market, which is mainly California takes us and and P. G M and we're also starting to look at other markets like New York, but at this stage day, though the three that we're focusing on.
The <unk> the 33 projects and that we have you know as a potential for around one gigawatt of energy storage and.
And we asked and.
Estimated basically waiting them for the next three years to be between two to 300 megawatts.
With some detailed mythology basically on the development process.
Whether it's size.
You've got the lander and position and we have entered connection and and based on that we waited different projects.
Regarding the merchant Frisk.
And we see that the portfolio will grow there will be some kind of.
Balanced portfolio that will be built on merchant risk and calling agreements that within the market.
A contract and hedging contracts that we see and across the different and state.
States and the portfolio.
Be building, some kind of for balanced portfolio.
Okay, and just following up on that and then.
I need to take into account that when you look at the end of the day.
I'm sorry go ahead.
Okay, and I will just wanted to say just one more thing that when you look at all but yeah. When you look at Walmart when you looked at each of the separate segments and this is the better that we see but when you look and over all and or must we need to remember that the entire geothermal portfolio today is contracted so on and overall basis.
And the merchant prices and the merchant.
Percentage is not very high.
Okay.
Okay makes sense and and is there any and set a target you would think of that for a avenue EBITDA coming from starch Bang, maybe and Vanmatre 2022.
And just sort of maximum exposure and nobody expectations for him and stripes as a per cent of your problem isn't it.
We didn't give any specific.
And.
Target for this run rate for 2022 between the different segments, but we do see the storage as a growing segment and the percentage should cool.
Okay, and just one final and here could you provide for my color and a declining panic that like maybe and that causes delays and signing contracts recently and <unk> and.
And your comment that meeting my specifically and then when do you expect your attention and mine normalized and May and any estimate of what that and then made my day.
And we'll see you know globally, we see.
And the pandemic may be a bit slowing down and.
And so we do see some wakening of project of potential project with Suzanne and that's part of the tender process for that we all participate participating in and and which are we now see more of them and if your P I and Indonesia, and the U S and and other defeat and call if and and.
<unk>, which was an important part of our product segment came out a couple of weeks ago and now the market is looking into it and and and they said we.
Hope the debt market will come up again.
And also see the New Zealand market is also.
Almost waking up a bit.
And so we do expect and during the the better for grew up whenever the impact on the P&L has a delay because once we do sign a contract revenue recognition is percentage of completion and.
A little bit longer period of time since we stop and.
The contract.
But what we see and the last just for some artwork within the last few few weeks is awakening of more more tender and more project that we are responding and and.
And we believe that customers are adapting to the situation and a returning to the previous plans to develop geothermal.
Okay, great. Thank you very much I'll jump back and again.
Alright, and meet there seems to be a slightly thank you for speakers line. So kindly account for it and asking a question and interacting with the management and thank you very much and.
And next question comes from Milwaukee with appetite and I. Please go ahead and.
Good morning, Thanks for taking the questions. Maybe we can just start with maybe understanding a little bit of work a year for a year and and EBITDA I believe you mentioned and your prepared remarks that 29 million and a business interruption insurance proceeds for received and the year.
I assume you are not including any business interruption proceeds and your outlook for 2021.
So can you first please confirm that and also address how much you think could potentially be recovered.
No. We appreciate a question in the 402 410, and we do have a a small amount of up to $10 million that we do believe we will receive and 2021.
With that being said that's one of the reason we do have a gap between 400 to 14 and as part of our guidance for the EBITDA for 2021.
In general and.
For the policy that we have in place we can recover in total and north of $30 million, three zero and and if we do that any fully receive it during a 2021 and we will increase the guidance.
Similar to the way we've done it in May 2020, and.
And so again there is an upside in our in our guidance.
It may it may take us more than a year to collect it and and without being said day, you're right. If you exclude the $30 million for me 2020, and add instead of $10 million. It looks like a 2021 results are better day twenty-twenty actual.
Even when they take into consideration the fact that day products segment is down.
Well I think that translates my next question, which is you know.
And you can tell us otherwise, but if I just apply a 25 per cent type detrimental you know on close to $90 million lower products revenues and I also at and what you just mentioned now and the year for your headwind from insurance and it looks like the rest of the business EBITDA is growing around you know eight and nine per cent.
You know and and that's without the benefit of much increased contribution from the geothermal portfolio additions during the year, except for opponent is that correct.
No I think you always <unk> I always sent from a doctor on the day you want one of our smartest analyst.
When you look at our portfolio and it looks like a electricity and storage is growing very nicely.
And we are comfortable the day and measured levels that you just describe of nine and 10% is something that we can sustain for long term.
There is no doubt that the sharp decline and products may and not sure people, it's hard for people to see it but overall day. They did the piece of the business that we do control is actually doing very nicely and we're confident and our ability by towards the end of 2022 two grand.
<unk> EBITDA non rate of EBITDA or for north of $500 million, So, whereas you say and you're saying you know two years from now we think Walmart will be in a completely different place. This is a transition here.
And and if you're located in between the numbers that you did you will see that our guidance is not bad at all.
I guess one additional question obviously be Capex guide is very robust compared to past years, and and ties to your commentary around and accelerating the growth and thank you know and the appendix you unpack that a bed and predominantly that spend his ambition for.
For for geothermal development and it looks like your disaggregated into a couple of hundred million dollars for projects that are that are already basically for at least with with about 150 million and [noise].
Exploration and potential enhancement, so that would obviously be a much bigger number for for both for particularly for the exploration and enhancement is that really being driven by you know the P. T C renewal by California is and.
And shall Y increased procurement of geothermal can you help us understand you know what's driving your increased expiration spending here.
I think there and and so first of all and definitely the ability to get pity fee and to get start of construction and.
And 2021, you're driving some of the fruition, but also if you look on and 90, 2019, and 2020 with and and have a lot of geothermal coming online and.
So this is a process that will push for a couple of feel the trying to accelerate the exploration and the permitting.
And.
And if you look on the numbers will quite a loud growth plan for 2021 and two.
And 22 and onwards and.
And so that is kind of.
And backlog of exploration projects coming to fruition and.
The U S and then afterwards internationally.
Okay. Thank you I'll turn it over.
As a reminder, if you have a question please press.
And one to be joined into the queue.
The next question comes from Jeff Osborne, calling please go ahead.
Good afternoon, guys a couple of questions on my and I was wondering if you could further elaborate on the 11 million dollar charge that you mentioned two questions. One I assume that's the Rabbit Hill storage project and then also we're and the the P&L and the income statement what should.
We'd be modeling that for Q1.
So on the on the rabbits healing and takes us and.
It's a two day for the rabbit and proud of the 10 megawatt project that we have the date for this started two words last year.
And his fault and all we have a little discussion about Merchantville says fixed price we've decided.
And the last year basically to hedge 80 per cent of that facility.
And we did this hedge and.
And last last week with the very extreme weather conditions, you know, we weren't able to the market will basically shut down and Texas.
To the emergency alert that are called issues and who weren't able to operate in in the market over the hedges the hedge and the exposure or the or the potential exposure there is up to.
$11 million debt will now and analyzing to see what is the.
What is actually what will be the actually and pack on it.
With respect to the PNM, whereas took and looking and the best way to book it but.
This is a non record and item and we will probably adjusted out of our adjusted EBITDA. So I think.
The best ways.
Even if you put it on a separate line item on your.
And you over here and.
Guidance for your forecast that will be fine.
So.
Got it and then it was touch on earlier around the product visibility and the lack thereof, because of COVID-19, but with the Turkish feed and tariff being reinstated but changed how should we think about your exposure and Turkey. Given your facility, there and then as Turkey or assuming Turkey.
[noise] rebounds, do you anticipate the margins to be similar to what they were in the past or possibly worse just given.
The nature of the feet and tariffs change.
And the the facility that we have and Turkey is either very small facility we aim to.
To reduce it to the minimum required in order to keep our presence there and.
So today is not the real build and and part of defeat the new $50 is there and increase.
And the subsidy to work two products manufactured in Turkey, and our facility will be an important part of this.
And we.
Do expect the Turkish market to to rebound and the next day.
Few wait for the next few months.
<unk> mouth, and it's very hard you know to to say, we hope there'll be a similar to what they've been in the past.
Got it and my last question is just on the the guidance itself for 20 twenty-three if I heard you right, there's no M&A either for geothermal or for the elevated storage.
Outlook, and so that that would be upside. If that's correct can you just talk about what the pipeline is for him and a if that's something you intend to be active in and a post the capital raised that you just had.
And so it does include any major M&A and.
And it will include a free by and our product that hasn't been built it like Appstore and you know that's that's part of the focus where we buy nolana positional small developers.
And and the geothermal he doesn't include any and she's a different kind of for clothes and doesn't include any m&a's.
And we are active in the in the field.
And we see quite a lot of potential deals come into the market, both and the geothermal and and the storage and we're looking on both and.
Earlier and.
And we do hope that we'll be able to.
Too close to sign basically and and then after that close the transaction and.
And one or both of these segments.
Got it. Thank you that's all I had.
Thank you.
This concludes our question and answer session.
I'd like to turn the conscience.
Sure for any closing remarks.
Okay. Thank you. So thank you all for for joining us and we appreciate the support and.
And it's been a very as we discussed a very good year for our electricity and segment and.
And storage for segments and.
And and the product is the one that is a bit more challenging, but we do see today.
They are beginning of new projects coming online and.
And to the in the and our customers and.
And there is a finished and in my earlier remarks, and we'd like to have an analyst day and later in May and and thanks to everyone.
HM.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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