Market Overview

Genie Energy Ltd. Reports Second Quarter 2019 Results

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NEWARK, N.J., Aug. 5, 2019 /PRNewswire/ -- Genie Energy Ltd. (NYSE:GNE, GNEPRA)) reported a second quarter 2019 net loss of $0.29 per share on revenue of $61.0 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, 2Q19 results are compared to 2Q18 results unless otherwise noted)

  • Global customers increased during 2Q19 by 24 thousand RCEs (+7%) to 357 thousand RCEs and by 49 thousand meters (+12%) to 448 thousand meters;
  • Average monthly churn declined to 4.4% from 5.3% in 1Q19 and 5.7% in 2Q18;
  • Following the quarter close, Genie Retail Energy (GRE) commenced customer acquisition activities in Texas' electricity market and obtained a license to operate in certain Michigan gas territories;
  • Revenue increased 8.1% to $61.0 million from $56.4 million;
  • Consolidated loss from operations increased to $10.2 million from a loss of $2.2 million.  Consolidated negative Adjusted EBITDA* of $9.1 million compared to positive $1.8 million;
  • Genie Energy's Board of Directors has declared a second quarter 2019 dividend of $0.075 per share.

COMMENTS OF MICHAEL STEIN, CEO

"Genie Energy made good operational progress in the second quarter as we continued to invest in growth across the company.  We generated notable increases in our customer bases in both our US and overseas markets.  Through the first half of the year, we have added 101 thousand RCEs, increasing our customer base by 39%.   Following the quarter close, we launched operations in Texas' deregulated electricity market and obtained a license to supply natural gas in Michigan.

"The second quarter is typically the lowest consumption quarter of the year, and the mild weather this spring further reduced domestic retail profitability while our investments in customer acquisition materially increased SG&A expense.  Our P&L was also impacted by declines in wholesale electricity and natural gas markets during the quarter which also triggered mark-to-market losses of approximately $1.8 million on the unrealized value of our commodity hedges. While this combination of factors resulted in weaker than usual results this quarter, the fundamentals of our business remain strong and our outlook remains positive.

 

CONSOLIDATED RESULTS


$ in millions, except EPS

2Q19

1Q19

2Q18


2Q19 -2Q18

Change (%/$)

Revenue

$61.0

$86.6

$56.4


+8.1%

Gross profit

$9.0

$25.6

$16.1


(44.1)%

Gross margin percentage

14.7%

29.5%

28.5%


(1380) BP

SG&A expense (including stock-based compensation)

$18.2

$15.8

$15.4


+18.2%

Stock-based compensation included in SG&A

$0.3

$0.4

$1.3


$(1.0)

Research and development

$0.1

$0.1

-


+$0.1

Write-down of assets held for sale to fair value

-

-

$2.3


$(2.3)

Depreciation and amortization

$0.9

$0.9

$0.6


+$0.3

(Loss) income from operations 

$(9.3)

$9.8

$(1.6)


$(7.7)

Adjusted EBITDA*

$(9.1)

$10.4

$1.8


$(10.9)

Equity in the net loss in equity method investees**

$(1.1)

$(0.8)

$(0.7)


$(0.4)

Benefit from (provision for) income taxes

$1.7

$(2.9)

$(0.3)


+$2.0

Net (loss) income attributable to Genie Energy c
ommon stockholders

$(7.8)

$5.6

$(2.3)


$(5.5)

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

$(0.29)

$0.21

$(0.09)


$(0.20)

Net cash (used in) provided by operating activities

$(3.1)

$7.0

$3.4


$(6.5)


*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 accounts for its investments in Orbit Energy, its joint venture operating in the U.K. and Atid, a drilling services business based in Israel in which it holds a minority stake, under the equity method of accounting. Under this method, Genie Energy records its share in the net income or loss of the venture. Therefore, revenue generated, and expenses incurred are not reflected in Genie Energy's consolidated revenue and expenses, but the customers are included in metrics regarding our customer base.

 

METERS AND RCEs

Genie Energy's global customer base increased sequentially and year-over-year driven by robust customer acquisition programs in the U.S. and overseas markets.  Genie Energy's global RCE and meter totals are provided in the chart below.

Global RCEs and Meters
at End of Quarter (in
thousands)*

June 30,
2019

March 31,
2019

December 31,
2018

September 30,
2018

June 30,
2018

Electricity RCEs

290

271

197

216

219

Natural gas RCEs

67

62

59

59

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