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Genie Energy Ltd. Reports Second Quarter 2018 Results

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Genie Energy Ltd. Reports Second Quarter 2018 Results

PR Newswire

NEWARK, N.J., Aug. 6, 2018 /PRNewswire/ -- Genie Energy Ltd. (NYSE:GNE, GNEPRA)) reported a second quarter 2018 net loss of $0.09 per share on revenue of $56.4 million

Genie Energy is a leading provider of electricity and natural gas to homes and small businesses in the Eastern U.S. Genie also operates an E&P company with an active exploratory program in Northern Israel.

FINANCIAL AND OPERATIONAL HIGHLIGHTS

(Throughout this release, 2Q18 results are compared to 2Q17 results unless otherwise noted)

  • Genie Retail Energy's (GRE) income from operations increased to $3.3 million compared to a loss from operations of $9.4 million. Adjusted EBITDA* increased to $3.8 million compared to negative Adjusted EBITDA of $8.9 million. GRE's results in the year ago quarter were impacted by a legal accrual of $9 million;
  • Consolidated loss from operations was $2.3 million compared to $13.6 million. Consolidated Adjusted EBITDA increased to $1.8 million compared to negative Adjusted EBITDA of $11.9 million;
  • Net loss per share decreased to $0.09 per basic and diluted share from $0.55;
  • GRE's churn rate decreased to 5.7% from 6.3%;
  • Genie Energy reclassified its drilling assets as 'held for sale' reflecting management's decision to explore strategic options for its Atid drilling services start-up. The reclassification resulted in an impairment charge of $2.3 million;
  • Genie Energy's Board of Directors has declared a second quarter dividend of $0.075 per share.

COMMENTS OF MICHAEL STEIN, CEO OF GENIE ENERGY

"Genie Energy's results for the three months ended June 30 were solid and consistent with our expectations. We continue to focus on Genie Retail Energy's operations, and achieved encouraging improvements in revenue, gross profit and income from operations even with our continued investment in international expansion.

"Looking ahead, we are focused on continuing the expansion of Genie Retail Energy both domestically and overseas.  Orbit Energy, our retail energy JV operating in Great Britain, is ramping up its customer acquisition programs.  We also expect to begin acquiring customers in an additional international market later this year."

CONSOLIDATED RESULTS

$ in millions, except EPS

2Q18

1Q18

2Q17


2Q18 -2Q17

Change (%/$)

Revenue

$56.4

$89.3

$50.2


+12.3%

Gross profit

$16.1

$24.5

$12.1


+32.6%

Gross margin percentage

28.5%

27.4%

24.1%


+430 BP

SG&A expense (including stock-based compensation)

$15.4

$17.1

$24.7


(37.9)%

Stock-based compensation included in SG&A

$1.3

$1.3

$1.1


+10.2%

Exploration expense**

-

$0.2

$1.0


$(0.9)

Equity in the loss of Genie UK***

$(0.7)

$(0.5)

-


$(0.7)

Write-down of assets held for sale to fair value

$2.3

-

-


$2.3

(Loss) income from operations 

$(2.3)

$6.6

$(13.6)


+$11.2

Adjusted EBITDA*

$1.8

$8.6

$(11.9)


+$13.7

Net (loss) income attributable to Genie Energy common stockholders

$(2.3)

$5.8

$(12.9)


+$10.7

(Loss) earnings per share attributable to Genie Energy common stockholders

$(0.09)

$0.24

$(0.55)


+$0.46

Capitalized exploration costs

-

-

$2.2


$(2.2)

Net cash provided by (used in) operating activities

$3.4

$8.6

$(7.1)


+$10.5

*Adjusted EBITDA for all periods is a non-GAAP measure intended to provide useful information that supplements the core operating results in accordance with GAAP of Genie Energy or the relevant segment.  Please refer to the Reconciliation of Non-GAAP Financial Measure at the end of this release for an explanation of Adjusted EBITDA and reconciliation to the most directly comparable GAAP measure.

** Genie Energy's Afek Oil & Gas subsidiary accounts for its oil and gas exploration activities under the "successful efforts" method of accounting.  Under this method, acquisition costs, costs of drilling exploratory wells, and exploratory-type stratigraphic test wells are capitalized on the balance sheet as "Capitalized exploration costs – unproved oil and gas property" pending determination of whether the well has found proved reserves.  Exploration costs, other than exploration drilling costs, are charged to expense in the statement of operations as "Exploration expense".

*** Genie Energy accounts for its investment in Genie UK, its joint venture operating in the UK, under the equity method of accounting. Under this method Genie Energy records its share in the net income or loss of the joint venture. Therefore, revenues generated, and expenses incurred by the joint venture are not reflected in Genie Energy's consolidated revenues and expenses.

BALANCE SHEET HIGHLIGHTS

At June 30, 2018, Genie Energy had $124.4 million in total assets, including $44.4 million in cash, cash equivalents and restricted cash.  Liabilities totaled $50.7 million and working capital (current assets less current liabilities) totaled $45.0 million.  

DIVIDEND ON GENIE ENERGY COMMON STOCK

Genie Energy's Board of Directors has declared a 2Q18 dividend of $0.075 per share of Class A and Class B common stock with a record date of August 15, 2018.  The dividend will be paid on or about August 24, 2018.  The distribution will be treated as an ordinary dividend for income tax purposes.

RESULTS BY SEGMENT

$ in millions

2Q18

1Q18

2Q17


2Q18-2Q17

Change (%/$)

Genie Retail Energy






Total revenue

$56.4

$89.3

$50.2


+12.3%

   Electricity revenue

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