Hello, everyone and welcome to the Ormat Technologies First Quarter 2022 Earnings Call. My name is Victoria and I'll be coordinating your call today. [Operator Instructions] I will now pass over to your host, Samuel Cohen to begin. Please go ahead.

Thank you, operator. Hosting the call today are Doron Blachar, Chief Executive Officer; Assi Ginzburg, Chief Financial Officer; Smadar Lavi, Vice President of Investor Relations and ESG Planning & Reporting. Before beginning, 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, 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. Because 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 ormat.com under the presentation link that’s found on the Investor Relations tab. With all that said, I’d now like to turn the call over to Doron Blachar. Doron, the call is yours.

Thank you, Sam, and good morning, everyone. Thank you for joining us today. The first quarter marks a good start for the year, delivering strong financial results in operational performance. We are encouraged by the robust growth captured in both the company's top line and adjusted EBITDA, which was driven primarily by solid performance from our leading Electricity segment and the strategic capacity addition to our portfolio that we made last year. I’m pleased to note that the first quarter demonstrated solid growth and advancement towards many of our stated targets discussed at a much recent Investor Day. We benefited from improved performance in our Electricity segment, mostly as a result of the capacity expansion to our operating power plants and the successful integration of our Q3 2021 geothermal asset acquisition. We continue to execute on our growth plans and recently commenced commercial operation of Tungsten Mountain 2, which increased the total generation of the Tungsten complex by 13 megawatt. In addition, we are on track to complete cost structure of the 13 megawatt CD4 geothermal power plant, the Tungsten Solar, the Wister Solar and the Steamboat Hills Solar facilities by the end of the second quarter. We continue to be encouraged by the increasing demand for geothermal energy, notably in California and Nevada. This increasing demand has already resulted in higher PPA prices compared to what we saw in recent years. This demand driven by legislation and broader migration towards renewable electricity sources will further support our unique business segments. We remain on track to deliver an annual adjusted EBITDA of $500 million on a run rate basis towards the end of 2022. I will now turn the call to Assi to review the financial results before I provide a further update on operations and further plans. Assi?

Thank you, Doron. Let me start my review of our financial highlights on Slide 5. Total revenue for the first quarter was $183.7 million, up 10.4% year-over-year, reflecting substantial growth in both our electricity and product segments. First quarter 2022 consolidated gross profits was $69.9 million. This resulted in a gross margin of 38.1%, down from the gross margin of 44.3% in the first quarter of 2021. The difference in margin performance is driven primarily by one-time revenue of $5.4 million in the first quarter of 2021 related to the February power crisis in Texas, as well as the impact of the shutdown of the Heber power plant in late February. Doron will elaborate on it shortly. Net income attributed to company's stockholder was $18.4 million or $0.33 per diluted share in the quarter. This compares favorably to the $15.3 million or $0.27 per diluted share in the same quarter last year, representing an increase of 20.8% and 22.2% respectively. The increase was mainly due to the electricity segment contribution. In addition, in the first quarter of 2021, the company was negatively impacted by the February crisis in Texas that reduced net income by $8.8 million or $0.16 respectively. Adjusted net income attributed to the company’s stockholders was $19.9 million or $0.35 per diluted share in the quarter. This compared to the $24.1 million or $0.42 per share in the same period last year. The decrease was mainly due to higher effective tax rates of 31.4%, compared to 14.8% in the same time last year. Adjusted EBITDA of $107.9 million, increased 8.7% in the first quarter, compared to $99.2 million in the first quarter last year, with EBITDA growth being largely driven by Electricity segment. Breaking the revenues down at the segment level, Electricity segment level increased 12.1% to $160.5…

Thank you, Assi. Turning to Slide 11 to look at our operating portfolio. During Q1 of 2022 power generation in our geothermal power plant increased by approximately 8.6% compared to last year. We’re capturing the benefit from the additional of the Dixie Valley and plants to our portfolio, as well as the increased output from McGinness Hills in Puna. These contributions were partially offset by lower generation at Heber 1 due to a fire outage and also offset by planned outage at the Tungsten plant, which is required – a required standard shutdown to complete our successful expansion. As I mentioned earlier, we successfully commence the operation of Tungsten 2, which adds certain megawatt to a Tungsten complex. This increase was higher than expected resulting in total of 42 megawatt of geothermal generating capacity. As noted on Slide 12, our Puna geothermal power plant is running and operating at an approximately 25 megawatts level. And currently PPA prices continue to be positively impacted by higher global energy prices exceeding the first quarter and continuing even further into second quarter. In addition, we are evaluating the positive decision that PUC made to conditionally approve the 46 megawatts PPA with HELCO subject to an environmental assessment process, which may take one to two years to finalize. We remain on track to drill new wells and expect to further improve generation at the site as the year progresses. Turning to Slide 13, let me discuss our plans to improve performance of our assets as the year continues. First, our assets in Guadeloupe returned to full capacity. And now our focus is on advancing the 10 megawatt expansion of the Bouillante project in the island. Second, with respect to our Olkaria power plant in Kenya, which is currently generating approximately 123 megawatts, I’m pleased…

Thank you. We will now start our Q&A session. [Operator Instructions] And our first question comes from Noah Kaye from Oppenheimer & Co. Please go ahead. Your line is open.

Thanks for taking the questions. First a supply chain related question for the Electricity segment. I think battery supply and solar panel shortages all that’s well publicized. But for the geothermal expansion, any items to be aware of in terms of gating factors on supply chain? I know you manufactured a lot of your own equipment for these projects. Are there any supply chain constraints to be aware of there? Or is it really all just permitting and environmental considerations at this point?

I would say, thank you for the question. As you said, we are vertically integrated, we do manufacture most of our products. But similar to everybody, we generate raw materials. There are challenges on the raw materials, but at least at this stage, what we see, we will not see any material impact due to supply chain issues on our geothermal development.

Okay. That’s positive. A follow-up on the Heber restoration. So you’ve got 20 megawatts back. What’s your sense of potential timing on those insurance recoveries? And when would you look to actually restore full capacities? Is that in plan?

We had quite good discussions with insurance, adjuster and insurance companies. And in the coming weeks or months, we will start to see payments for the property damages as well as for the business interruption. Ordering a generator regardless of supply chain issues takes roughly a year. So we don’t expect remaining 20 megawatts to come online in 2022. And that’s the reason that will reduce the revenue guidance due to this fair.

Okay. That’s helpful. And then, you mentioned Dixie Meadows, our understanding is that the protections there last I believe it was 240 days. How do you think this will play out? At what point will you be able to proceed with completion and what should investors should be watching for in the meantime?

I would say, the setting the toad an endangered species doesn’t impact the construction. So we believe that there’s no legal basis to stop construction of the plant. We have developed with the BLM, a robust mitigation plan due to these issues with over six years. Okay. So that this project could have come online already six years ago, had we not worked with the BLM to develop this mitigation plan. And we think that this mitigation plan is good enough. So we obviously with this new lifting we’ll of course continue to work with all the agencies, BLM, as well as the Fish and Wildlife to address any further concerns that they have. In the meantime, we continue with the construction, the 240 days that you mentioned is the time for them to finalize this emergency decision that they did. And we hope that we will be able to discuss with them and the BLM, good resolution that will allow us to operate this 12 megawatt facility since the U.S. administration. And I believe everybody wants renewable energy in order to mitigate the climate crisis. And that's what we do. And since, this is the target of a global target administration and everybody else targets in order to get more renewable energy, we believe that there should be a solution. We will have the right mitigation plan and operate the power plant over time.

Perfect. Thanks for taking the questions.

Thank you.

Perfect. Thank you, Noah, for your questions. [Operator Instructions] And our next question comes from Julien Dumoulin-Smith from Bank of America. Please go ahead.

Hey, good morning team. Thanks for the opportunity to connect. Just wanted to follow up on some of the delays here on the project, specifically storage. Can you talk about supplies sourcing at this point, which is what gives you confidence on this specificity, on the latest delays, understand that many of these are frankly relatively near-term in terms of deployment, just where do they stand? And then also, what is the impact on 2022, 2023, just ultimately across the delays in terms of sort of a walk from what you guys had talked about before, if there's a good number to run with there. But ultimately, getting confidence on the timeline is the key here that I'm curious about.

Hi, Julien, thanks for the question. The one confidence that we have is that all of these projects either have been supplied with the batteries like [indiscernible] that are supposed to come online. We've issued already PO and the batteries are due to come. So what we see with the supply chain issues is not getting batteries, but mainly might be some delay in timing wise, but also that PO has that defined time of delivery and we expect them to come online. So all-in-all the project that you see here we feel today very confident that they will come on time, mainly due to the fact that we've ordered the materials. So they will move in a month or two, it might happen, but this is where we believe now.

Julien, one more thing to mention. We did keep the storage revenue for the year flat versus our initial year-end guidance of $30 million to $35 million. And please also I'll remind you that in the East Coast, we are enjoying a record prices, if natural gas hit yesterday $7.70 per MMBtu. So even if we have a slight delay in project on the storage, the other assets are actually functioning very well. And as Doron mentioned, you can see on the slide deck, we continue to see improvements in the EBITDA margin of the storage. So we really are promoting this business. We think it's important. And we kept the revenue guidance for the year. And it wasn't a challenge. We actually see a good tailwind of prices.

Right. So actually effectively with that guidance unchanged, the thought process is that merchant prices are offsetting some of the delay in revenue recognition on new assets?

If that will be the case, that's the mitigating part. Yes.

Got it. Excellent. Thank you, guys. And then just related here on California, there's some headlines around extending nuclear asset life a little bit. I mean, that couldn't pack total procurement. I mean, what are you guys thinking on and seeing any updates on RA procurement. I mean, obviously that kind of extends an early next year to substantive extent, but are you seeing any updates on the overall scale of what the procurement is? Any updates on your position there in on the – I know multiple potential expansions.

We're in definitely excellent market right now, Julien, anything that we will bring in the next five year, will be able to contract in the West Coast in very good prices. So we see the same demand that we saw as we discussed in the recent Investor Day. Nothing changed.

Got it. All right. Excellent. I'll leave it there. Thank you, guys.

Thank you.

Thank you so much, Julien, for your question. At this time, there are no further questions and I’d like to pass back over to Doron Blachar for any final remarks.

Okay. Thank you. So thank you everyone for joining us, as you've seen, this was a very solid quarter and a very good start for the year. We're focusing on the growth of our company and the capital investment and we look forward to bring from you and seeing you. Thank you.

Thank you everybody for joining today's conference call. You may now disconnect your lines.