Ormat Technologies Inc. Q1 2023 Earnings Call
[music].
Good morning, and welcome to the Ormat Technologies' first quarter 2023 earnings conference call.
All participants will be in a listen only mode.
After today's presentation there'll be an opportunity to ask questions if.
If you'd like to ask a question. During this time simply press Star then the number one on your telephone keypad.
Your question. Please press star one again.
Note that this event is being recorded.
I'd like to turn the conference over to Alex Steinberg with Alpha IR. Please go ahead.
Thank you operator.
On the call today are drawn to Shar, Chief Executive officer odds against Berg Chief Financial Officer.
It will be vice president of Investor Relations, and ESG planning and reporting.
Before beginning we'd 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 and expectations for future operations and are based on management's current estimates and projections future results or trends actual future results may differ materially from those projected as a result of certain risks 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, and quarterly reports on Form 10-Q that are filed with the SEC.
In addition, during the call the company will present non-GAAP financial measures such as adjusted EBITDA reconciliations to the most directly comparable GAAP measures and management's reasons for presenting such information is set forth in the press release that was issued last night as well as in the slides posted on the website.
These measures are not calculated in accordance with GAAP. They should not be considered in isolation from the financial statements prepared in accordance with GAAP.
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's found on the Investor Relations tab.
With all that said I would now like to turn the call over its deron bizarre Deron calls all yours.
Thank you Eric and good morning, everyone. Thank you for joining us today.
We're pleased to report a strong start to deal with impressive net income and adjusted EBITDA growth, you'll get year supported mainly by what it specifically.
Our operating income and adjusted EBITDA saw significant improvement of 17, 9% and 14, 5% respectively.
Net income increased 57, 5% as income tax was positively impacted by the inflation reduction Act.
We attribute the success close to it.
Gross initiatives from last year.
As well as our operational performance and the regulatory tailwind that allowed us to maximize shareholder value.
Our electricity segment continues to lead the way with strong performance demonstrated the benefit of our ongoing portfolio expansion strategy.
You know products segment, the step down in revenue compared to the first quarter last year was largely due to the timing when that we made in recognizing revenue throughout the year, which we expect to accelerate in the remaining of the year.
Our storage segment quarterly performance was negatively impacted by an overall reduction in energy rates, which impacted our results in the PJM and Kaiser facility.
As we enter the second quarter, we completed construction and started operation with two new energy storage facility.
We are near completion of additional two facilities.
With a total capacity of 64 megawatt 64 megawatt hour.
We expect the overall positive momentum we saw in Q1 to continue in the rest of 'twenty to 'twenty three with the higher rate provide.
Providing additional benefits to the tax credits available for geothermal energy storage project.
Which we expect will positively impact our bottom line.
We remain on track with our full year guidance for 2020, three and capacity expansion goes for 2025.
As we look to the future. We are confident in the continued demand for renewable energy and we expect to benefit from it in all of our three segments.
Now before I provide further update on the operations and future plans I will turn the call over to US to review the financial results I see.
Thank you Darren.
Let me start my review of our financial highlights on slide five.
Total revenue for the first quarter was $185 $2 million up roughly 1% year over year.
Mostly driven by growth in our electricity segment.
First quarter of 2023 total gross profit was $76 1 million.
This resulted in a gross margin of 41, 1% up from the gross margin of 38, 1% in the first quarter of 2022.
Net income attributed to the company's stakeholders was $29 million or <unk> 51 cents per diluted share in the quarter.
This compares favorably to the results of $18 $4 million or 33 cents per diluted share in the same period last year.
The 57, 5% increase in net income was mainly the result of a strong increase in operating income driven by new capacity added in the electricity segment in the second half of 2022.
And the contribution of the IRS benefit to both sell new geothermal and storage facilities.
Adjusted EBITDA of $123 5 million dollar increased 14, 5% in the first quarter.
Compared to $107 million to $9 million in the first quarter last year.
The increase was largely driven by 17, 9% increase in operating income as a result of the new assets added.
Further supported by the impact of the PTC generated in the quarter.
Breaking the revenue down to the segment level.
Electricity segment revenue increased four 8% to $173 million.
This increase was driven by contribution from Omar portfolio expansion efforts in 2022.
Mainly from CD for tungsten.
Thanks, Dan and solar facility as well as from the successful Repowering of Huber too in the Heber complex.
These drivers of revenue growth were partially offset by lower energy rates at Puna.
In the product segment revenue decreased by 31, 4% to $10 million and represented five 4% of the total consolidated revenues in the first quarter.
The year over year decline was mainly due to the timing of revenue recognition compared to the prior year period. However.
We were able to sign three new contracts during the first quarter, it's a total amount of approximately $40 million.
And we reiterate our confidence in our full year segment revenue guidance, which represents 18, 9% growth compared to the same time last year.
Energy storage segment revenues were $4 9 million compared to $6 $6 million in this first quarter of 2022.
This decrease was driven primarily by the reduction in energy rates in the east coast of the United States, resulting in lower rates at W. P. J M facilities.
Okay.
Moving to slide six.
The gross margin for the electricity segment was 44, 4% compared to 41, 8% in the second quarter last year.
The gross margin expansion was attributed to the new added capacity and higher behind <unk> proceeds by four and a half million dollars versus last year related to the bullet point.
In the product segment gross margin was six 9% in the quarter.
Which was flat compared to the same year ago period.
Despite flat segment margin, we believe that the strength of our new contract signing late 2022 and 2023 so far will drive higher margin for the segment for the remaining of deal.
The energy storage segment reported a negative gross margin compared to a gross margin of 13, 5% in the first quarter last year.
We expect margin improvements as well as we start to operate the new assets and grow the segment portfolio significantly.
The electricity segment generated 98% of my total consolidated adjusted EBITDA in the first quarter.
The products segment generated one 5%.
And the energy storage segment reported adjusted EBITDA of $8 million, representing 12% of total adjusted EBITDA for the company.
Yeah.
Reconciliation of EBITDA and adjusted EBITDA are provided in the appendix slides.
Looking at slide seven our net debt as of March 31, 2023 was approximately one $6 billion.
Cash and cash equivalents Andrew.
And restricted cash and cash equivalents as of.
March 31, 2023 was approximately $522 million.
Compared to $227 million as of December 31, 2022.
This slide breaks down the use of cash for three months illustrate the unmatched ability to reinvest in the business service, our debt and we don't capital to our shareholders in the form of cash dividends.
We note that is use of cash have been funding from our equity offering cash generating by operation and a strong liquidity profile we maintain.
Our total debt as of March 31, 2023 was approximately $2 $1 billion net.
Net of deferred financing cost.
And its payment schedule is presented on slide 28 in the appendix.
The average cost of debt of the company standard for one 4%. We think it is important to note.
We are prepared to deploy capital to fund our multiyear growth targets.
Nearly all of our debt liabilities remained fixed rate in nature.
Which we believe will help continue positioning or market competitively in the rising global interest rate environment.
In addition, we expect to finance, 30% to 50% of our future U S. Capex.
With the support of ITC and PTC under the new I R E.
Which we expect will enable us to significantly reduce the funds needed to develop storage and near term Melissa.
Moving to slide eight in.
In the first quarter of 2023.
<unk> invested nearly $107 million in capex to advance our growth.
We have $1 $1 billion of cash and available lines of credit.
Our total expected capital for the last three quarters of 2023 includes $494 million of capital expenditure as detailed in slide 29 in the appendix.
Overall, we have strong position in terms of capital sourcing with excellent liquidity and access to additional capital at attractive rates to support our future growth initiatives.
On May nine 2023, our board of directors declared approved and authorized.
Payment of a quarterly dividend of 12 <unk> per share to all holders of the company's issued and outstanding shares of common stock on May 23 2023.
Payable on June six 2023.
In addition, the company expects to pay quarterly dividends of 12 cents per share in each of the next two quarters.
That concludes my financial overview.
I would like now to turn the call over to Darren.
Discuss some of our recent developments.
<unk>.
Thank you Austin, turning to slide 10 for a look at our electricity segment operating portfolio.
Generation growth continues to be positively supported by the addition of city for tungsten EBIT to Repower and the new solar facilities, including with first solar.
This was partially offset by lower generation at our old facility the demand constrained by Heath availability from the natural gas pipeline.
In addition, since the end of the first quarter, we added 31 megawatts to the electricity segment from the new notes about valley power plant and the completion of the solar facility adjacent to our Brady geothermal power plant and.
Reached total electricity portfolio with one one gigawatts.
Moving to slide 11.
<unk> thermal power plant has recently achieved the generating capacity of approximately 28 megawatts, which is a significant improvement from the 23 to 25 megawatts in the fourth quarter of 2022.
While prices for electricity generation will remain healthy they were lower than last year.
As further product expansion, we agreed with telco or new pillar of the PPA with a more favorable to a month and we are awaiting approval from the Hawaii PUC.
In regards to our carrier power plant in Kenya, We've made progress in our ongoing effort to increase the complex capacity.
We have reached the capacity of approximately 127 megawatts up from 125 megawatts in the fourth quarter of 2020.
Yeah.
With respect to handle one the new power plant is near completion and expect to be online by the end of the second quarter.
New facilities together with the Repowering of the EPS growth.
It is expected to bring the total complex capacity to 89 megawatts and improve its efficiency and profitability.
Turning to slide 12 for an update on our backlog, which stands at $147 million.
We were able to sign contracts totaling approximately $40 million.
During the first quarter.
In addition, <unk>.
Currently a new favorable topic structure was approved in Turkey, which we anticipate will increase demand for new development.
Moving to slide 13, the energy storage segment was affected by low rates at PJM and kite.
However, we have made progress in this segment by starting at the end of the quarter. The operating of two new facilities and delay in completion of two more which will add a combined capacity of 54 megawatt 64 megawatts hour.
We anticipate that this project will help to increase the segment's revenue for the.
Moving to slide 14 for an overview of the strong tailwind, we expect from regulatory initiatives.
On the international side as I mentioned earlier, the new talent that was recently introduced in Turkey includes additional incentive this will overall secured development with local manufacturing.
Salaries of approximately $118 per megawatt hour.
We believe this will really opened the Turkish market for us for new sales opportunities.
In the U S. We already saw this quarter the positive benefit of the inflation reduction that one hour window.
Transferable PTC related to EBIT geothermal and with first solar as BTC sold under the city for new tax equity transaction.
Our adjusted EBITDA by $4 8 million this quarter.
In addition, this post favorable ICC related to Howard energy storage facility reduced our tax expense and thus increased net income.
This positive impact will continue through the year and will increase as we add more new products.
We expect the total cash benefits related to PTC and ITC benefit of approximately $150 million in 2023.
The source of cash will enable us to significantly reduce our capital needs for the year.
Equally as we look to continue growing our leading geothermal portfolio.
Yeah.
Moving to slide 16 and 17.
Our growth plans for both the electricity and solar segment remains firmly on track despite some minor delay.
As we look ahead to 2025, our target of approximately one eight gigawatt of added capacity represents an impressive 485% growth at the midpoint compared to the year end 2022.
This will be achieved through the addition of Tijuana.
230 to 260 megawatts of geothermal and solar LNG power plants, and 412 to 442 megawatts of energy storage capacity.
Slides 18, and 19 display the geothermal at a hybrid solar PV project currently underway.
The Dixie Valeant Heber, one geothermal power plant and steamboat solar.
It will be online during the second quarter of 2023.
Moving to slide 'twenty, and 'twenty, one, which highlights the third leg of our growth plan the energy storage segment.
As presented on slide 20, and as I mentioned earlier, we commenced the operation of powered in bowling Green and we are near completion of upturn in Andover.
In addition, we have two assets that are planned to be online in the second half of 2023.
Our energy storage pipeline is robust and we have developed a pipeline of more than three gigawatts of capacity U S pipeline, mainly in California and Texas.
Please turn to slide 22 for a discussion of our 2023 guidance.
In the first three months of 2023 format has delivered meaningful year over year growth across our revenues.
Operating income adjusted EBITDA and net income.
We expect full year revenues to range between $823 million and $858 million.
Which will represent a 12% to 17% increase year over year.
Within electricity revenues are expected to be between 670 $685 million.
At 7% interest at the midpoint.
We also expect product revenue to come between 120 and 135 million.
And approximately 79%.
Storage revenue guidance is $33 million to $38 million for the year, which is also significant interest year over year.
Adjusted EBITDA for 2023 is expected to be between $480 million and $510 million.
As a double digit improvements from 'twenty to 'twenty two throughout the range.
On slide 24, before I close the call I want to highlight our continued commitment to environmental social and governance ESG initiatives.
As part of this commitment we are working to finalize and publish our 2022 ESG report by the end of August which will provide a comprehensive overview of our sustainability initiatives performance and target.
Further supporting our ESG initiatives, we have established a new ESG Committee.
Board of directors and next week will be our first global ESG.
I will end our prepared remarks on slide 26.
In summary, we are pleased to report another solid quarter with significant growth.
Spite, some short term delay our growth plans remain on track and we are well positioned to capitalize on the strong global demand for renewable energy solutions.
As always we remain dedicated to delivering sustainable profitable growth for our shareholders shareholders.
While also making a positive impact on the environment and the communities where we operate.
This concludes our prepared remarks, now I would like to open the call for questions operator.
Thank you as a reminder, if you'd like to ask a question. Please press Star then one on your telephone keypad.
The first question is from Noah Kaye with Oppenheimer. Your line is open.
Good morning, and thanks for taking the questions.
Maybe we can start with with the cheaper one repowering congratulations on getting that done.
Done timely.
Went back a year ago and looked at the impact from the fire and look at where you are now.
<unk> impressive what you've been able to do with that complex, maybe maybe talk through.
How that process has played out you know what you've actually done to be.
Well to affect the Repowering.
Yeah.
Good morning, Thank you for the question so.
As a reminder, <unk> too.
Started already to operate it in the Q4 of last year really.
December .
And EBIT one is expected to any day now to have the <unk> should be doing into Q2 before the end of before the end of the quarter Keith.
Cable one they used to be a 40 megawatt power plant.
And 50% of the power plant was equipment.
And 50% was basically to see buy or Mitsubishi we demand it was his team equipment.
During the fire the steam equipment.
All obsolete.
During the last year, we were able to basically re install.
All of the units, we are not going to use even.
The old units marches to a Brent.
And then the further the new capacity of Heber between Heber, one and Heber due in the surrounding facilities will be close to 90 Mega.
And we also expect it to.
To happen in a much better profitability because the cost to operate a brand new plant.
It's much better than the cost of operating all these things.
Very helpful. I think it opens up a broader question about repowering opportunities across the portfolio.
I don't know whether ITC benefits.
Factor into that decision.
<unk> you can comment to PTC ITC I should say, perhaps you can comment to that.
Powering opportunity that you see today any potential quantification of that would be helpful.
I know, it's the wrong. So as you said the Heber.
The facility was repower.
We've done a similar.
In our mist facility.
<unk>.
Two in mammals in other sites.
So we currently don't have any big power.
Following project like.
The Hebron our facilities.
We have smaller one leg see value that you see in Guatemala.
Do have.
Smaller projects.
Be Huawei is another project that.
We're actually doing.
So, California power basically taking an old facility that is doing now.
910 megawatts and will generate over 20 megawatts when it comes online in the middle of next year.
Okay.
The big Red.
We power that we have today.
Very helpful and maybe the last one just on the Pune.
PPA Refiling nice to hear that that moves forward.
You mentioned, it's more favorable for the company can.
Can you just sort of dimension for us in what way is it more favorable I know that.
For for the PUC.
The desire to kind.
Get away from linkage to fossil fuel price, let's talk about why this is more favorable.
Both for the company.
Yes.
Absolutely Puneet is another big repo that we will do a basically this one.
The PPA, we are going to replace the entire facility with a new facility that will come online.
The since you obviously following.
So over the time, you've seen that we've invested.
Like a lot of efforts in drilling into tuna.
And all of these are basic.
Basically.
Better into the new and up to dated PPA.
So the PPA is better for us because it takes into account.
Higher costs that we had.
In order to drill and find resource to support a 46 megawatt facility.
And it's very helpful.
And we finished the sorry go ahead please.
Yeah, and they filed it with the PUC and we hope that.
Okay.
Q3 will get the middle of Q3 will get the approval from the PUC and Hawaii and move forward with the project.
Very helpful. Thank you.
The next question is from Justin Clare with Roth <unk>. Your line is open.
Yeah, Hi, thanks for taking my questions.
First off here just wanted to see if you could talk about the visibility you have into growing your geothermal capacity beyond the projects under development that you have already identified in the presentation.
When might you be ready to share additional details on projects that you have in the pipeline and then just wondering at this point in time beyond the projects identified are you developing additional projects that will have potentially in 'twenty 'twenty four or are they likely to be 2025 or so.
And beyond.
So.
Thank you Justin.
We have.
Approximately 40.
Note that are listed in our 10-K submission prospect that we have globally most of them in the U S.
Nevada and California.
Started this year.
At cohort program with all of this will.
In three locations.
Cohort.
In Nevada.
And.
The plan for the call.
Seven locations cohort planned where we will drill before we started when they have to run.
With really the key.
Cohort.
This will be the next level of.
Development that we will have.
Okay.
And they will come and assuming everything is successful in the 'twenty six 'twenty seven.
Pipeline horizon.
That's in the U S and Indonesia.
Drilling into location.
It was just responded to aneel.
The tender this was issued.
The Indonesian government.
CDP the state owned utility and we're competing with the mainline chevron on the site.
And we have additional location.
We are in various stages of negotiation as part of the exploration.
In Indonesia, the process takes a bit longer so it may be.
Later, but definitely.
Many potential that we're working today for the next round of development beyond what we have decided on our.
Presentation.
Okay, Great very helpful. And then was wondering if you can you just update us on what Youre seeing in terms of the trend and PPA pricing for geothermal assets, maybe in the U S. But then also in other markets.
It sounds like the PPA signed for the Pune project was favorable but maybe you can just comment on what youre seeing more broadly.
Yes.
We see.
And continue its demand for.
Geothermal projects I can tell you in order to follow up on your previous question, we've been actually been asked already by different.
<unk> on the.
Signing PPA is towards the end of 'twenty.
'twenty than maybe two at the beginning of the 2013.
So we see quite a lot of demand and when demand is high and the.
The number of projects are those very high prices go up.
So we continue we continue to see increased pricing in the U S. Indonesia is set to the other locations we're operating a set.
Presidential Taurus.
That ranges between.
$9 95 to 110 to $120 per megawatt depends on the location of the site.
So these are also.
Good.
Pricing.
Okay.
Got it Okay, and then maybe just one more for me.
Shifting to the product segment.
Revenues.
Declined a bit quarter over quarter was just wondering if you could share why the revenues declined in that segment.
Was this just happened to be the timing.
For project delivery is more did you see any issue in supply chain or logistics.
And then also on the margin profile.
You indicated that margins in that segment are expected to increase through the rest of the year here I was wondering where could we see gross margins for the project segment, and say Q2 Q3 or Q4.
Moving through the through the year here.
So as we mentioned in our brief remarks.
We expect the full year revenue to be on the high end of the revenue is basically we were able to.
To have a sufficient backlog to almost guarantee almost the revenue for the year.
And the reason why we were behind the this quarter is with just the way we decided to allocate work between internal work.
Building projects for Walmart and working for third party.
With respect to margin I think that.
On an annual basis or not in this environment.
It should be similar to in the 15% to 20% of gross margin.
These are the types of margins that we should have based on the combination of the some of the contracts that have lower margins that are coming from 2022.
And they wanted a slightly with higher margin that were signed in.
Early 2023, so when you combine between them and also some of the fixed cost.
We should consumer between 15% to 20% margin may be on the higher end.
Towards the end of the year.
Okay got it thank you.
Yeah.
Again, Thats star one if you'd like to ask a question. The next question is from Julien Dumoulin Smith with Bank of America. Your line is open.
Hey, good morning team. Thank you guys very much I appreciate it.
Look I wanted to talk about California, first and foremost obviously.
California capacity prices are up very meaningfully.
In the last few months here and obviously year over year in a big way I know that you principally operated contract portfolio, but I just wanted to get a sense as to how that might impact even modest amounts of exposure in the next few years as you might see.
Some step up from that as well as does that actually change your development focus to fixate on California, and the opportunity there just given how much more robust the IRR or conceivably between first the.
Higher capacity and secondly, IRA if you will.
Hi, Julian Thank you.
So we see the demand very strong in California. As you said, what we've also seen very strong demand in Nevada that is coming from the basic.
Requirement to go through in Europe .
As preparation for.
For this growth that we've started to see a couple of years ago.
Resolution of the CPUC, we more than doubled our exploration efforts.
In the past we've been drilling in two to three locations at the maximum today, we're drilling five locations in parallel and targeting to go up to seven locations.
We see the benefits that we get the higher PPA pricing and the IRA as you mentioned we are working.
Yes.
The geothermal at PTC, the up until the end of 'twenty four.
And we hope that it will be extended but regardless.
Operating.
Context of getting to start of construction according to the I, obviously <unk>.
By the end of the year. So most of our project coming online in the following four years, we'll enjoy the irate PTC.
Even if they will not be extended for geothermal.
We've put a lot of efforts into the U S mainly in the resource and exploration.
And as I said before we are drilling.
Already in three new locations in Nevada cohorts.
The plan is to drill another four this year and the beginning of next year and this will be the base for the next wave of projects.
Is this relation will be successful we will be part of the fault block Stifel.
Excellent. Thank you very much and if you can elaborate briefly if you don't mind key.
A key question is around.
The ITC and PTC.
Recognize through the forecast, but I think you guys had $150 million in the current year here what is how does that flow through over the next few years, just what does that amount to per year. If you didn't try to give some sense of visibility I know I know these things are moving around a little bit.
Julian This is Austin. Thank you for the question.
First the ITC is an outcome of the amount of Capex and the timing of the C O D.
The storage assets.
This year the.
The amount of assets that were bringing online, we expect somewhere around $15 million to $18 million of ITC benefit.
All of which should flow to the reduction in income tax and reduce the tax rate for the company similar to what we saw this quarter.
When we look to next year.
We have two large projects the larger one of course is the bottleneck, which cost us around 100 $510 million.
It looks like based on preliminary analysis, the bottleneck will be entitled to 40% ITC.
Which mean in this scenario only bottleneck next year should give us compared to the 15 to 18. This year 40 million. So next year ITC benefit will be more than doubled this year.
Because in addition to bottleneck. We also have as you can see on the Lowe's leased Montague, which also.
We expect to get around $6 million of ITC. So on ITC of net income next year, we'll see a boost and we see a roughly $45 million of ITC proceeds.
When we look at tax equity transaction, we do have be while we next year.
It won't be as big as what we saw this year it will be equal to somewhere around North valley.
It should add around $30 million to $35 million of proceeds so between the two next year, we expect around $75 million of ITC and PTC proceeds.
In addition to some.
Some other bdcs that will generate during the year.
Some of the solar project, so, it's probably going to be around $80 million, but the P&L impact in.
In 2024 will be much higher.
The cash impact will be lower but the P&L impact will be much higher so we expect a very good net income next year.
Right and that's because you follow the itc's pretty much.
Instantaneous right. When you were talking to these numbers, that's not necessarily delayed or staggered over some period of time right just to confirm with you right. The numbers that you quoted are flowing through the P&L.
The ITC proceeds that they quoted flat flying to the P&L you are correct the PTC.
Turning to the cash flow and then amortize over usually nine to 10 years through the tax equity line item and you can see that this quarter, there was $4 $8 million more than the same period last year.
It's because we are producing more ptc's.
We expect to sell them either to tax equity transactions all through.
I would say PTC transfer transaction.
We are seeing the market moving to a higher level and values on PTC. It started with 89% 80% to 85.
Now, we're getting quotes up to 92 cents on the dollar for Fabry disease.
And then hopefully bank of America will be buying from us more PTC in the future.
Very good indeed, alright. Thank you guys very much I appreciate it all right.
Thank you Kim.
The next question is from Jeff Osborne with TD Colin Your line is open.
Yes. Good morning, just a couple of questions on my side.
Obviously, you've given some hence our bread crumbs over the past two earnings calls about some of the leverage in the model.
New projects that are flowing through for through 24 in response to Julians question, you talked a lot about the tax side, but I was wondering if you could talk specifically on EBITDA.
You get a full year of Pune break next some of the other projects or bottleneck is there a way of quantifying.
What sort of incremental EBITDA you have in 'twenty four either through the rebuild through the two facilities or some of the new projects.
Hey, good morning, Jeff So first already last quarter, we mentioned.
Debt.
The assets that will be built in 2023 and will be operate.
23.
We will add roughly a $30 million three zero of adjusted EBITDA to 2024.
Pune we.
We will only be upgraded in 2025.
In addition to that there are new assets that will be operated in 2020 for parsley.
Which are bottleneck.
Montague underscored sites.
<unk>, probably over $15 million of EBITDA.
And then we also have the upgrade of February .
It's our largest project in the 2024, which will add few more million dollars of EBITDA.
So the assets that will be COPD.
Hopefully as early as we can this year should add to the following year on $13 million of EBITDA, which mean.
If in 2020.
Three.
Our guidance for $4 $80 million to $510 million of EBITDA.
The Rockdale, we should benefit by additional $30 million from the assets, we already paid by the company.
And then we'll start adding the new assets for 2024.
Yeah.
Got it that's helpful. And then maybe just one follow up I think it was on Justin's question about the product gross margins I think you mentioned the Turkish.
Support has come back I think they have an election this weekend.
Taken but I'm just curious two part question how political that process was.
The election changes is there any risk to that program and then B I think historically your Turkish margins in particular, we're pretty depressed relative to other countries. So I'm just curious.
Turkey starts resuming orders, if theres any risk to the 15% to 20% number that you talked about.
So the elections in Turkey.
On May 14.
The new tariff was signed last week.
Sure.
We cannot predict who's going to win the election, and obviously, what the winner will do following the election.
But what.
But this trading <unk> deal for a long period of time, so the market did stop.
The government in Turkey saw that the market stopped.
Cost of the <unk> target.
Was initiated a few years ago and the discussion on improving the feed in tariff was a very long discussion.
We hope that it will not be changed or reduced.
I can tell you that unlike previous.
The requirement is for product a lot of production in Turkey, and as you know.
We have a facility in Turkey, and we know subcontractor.
It can deliver.
But in therapy so.
It will grow in terms of defeating tirelessly came in.
Waiting for the election.
We hope that after the election.
Automate regardless of who wins.
It will be more stable and stronger that will allow the local developers.
Two of these projects.
We've already been approached by multiple of them, but similar to what you asked everybody is waiting for the elections.
On May 14.
Margins in Turkey.
The past has ups and downs a few projects with very nice margins other with lower margin.
We do expect a significant competition.
The supply.
Turkey.
But.
If you're going to be a big market I'm sure, we'll be able to take a large portion of it.
Good margins.
Thanks for the detail that's all I had appreciate it.
Thank you.
No further questions at this time I'll turn it over to the presenters for any closing comments.
Okay. Thank you operator, thank you all for joining us and your continued support.
We look forward.
Look forward to continue and deliver to all our shareholders and all our stakeholders a profitable growth. Thank you all.
And gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
[music].