Q3 2023 Genie Energy Ltd Earnings Call
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Speaker 1: I called it like earlier.
Earlier.
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Good morning, and welcome to Genie Energy's third quarter 2023 earnings call.
Speaker 2: and welcome to Geney Energy's third quarter, 2023.
Until the Q&A portion of the call all participants will be English only mode.
Speaker 2: Q&A portion of the call all participants will be in listen only mode. Should you need a
Should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
After todays presentation by Genie Energy's management, there will be an opportunity to ask questions. Please note. This event is being recorded I will now turn the call over to Brian Segal of Hayden IR.
Speaker 2: presentation by Jeannie Energy's management, there will be an opportunity to ask questions. Please note this event is being recorded.
Thank you operator with me today are Michael Stein, Genie Energy's, CEO, and Avi Goldin Genie Energy's CFO, who will discuss operational and financial results any forward looking statements made during this conference call, whether general or specific in nature are subject to risks and uncertainties that may cause actual results to differ materially from those statements.
Speaker 3: Thank you, operator. With me today, our Michael Stein, Gene Energy CEO , and Avi Golden, Gene Energy CSO, who will discuss operational financial results.
Speaker 3: And before looking statements made during this conference call, whether general or specific in nature are subject to risk and uncertainties that may cause actual results to differ materially from those statements.
Speaker 3: These written uncertainties include, but are not limited to, those discussed in the reports that we file periodically with the SEC.
These risks and uncertainties include but are not limited to those discussed in the reports that we filed periodically with the SEC.
Speaker 3: Genius, it was no obligation to update any four of the things statements that we have made or may make or to update the factors that make cause actual results to different materially from those that we forecast.
<unk> assumes no obligation to update any forward looking statements that we have made or may make or to update the factors that may cause actual results to differ materially from those that we forecast.
Speaker 3: During the remarks, management makes reference to a Justin Evely, a non-gum.
Jeremy or their remarks management makes reference to adjusted EBITDA, a non-GAAP measure.
Speaker 3: Measure police and its measure of adjusting with the provides useful information to both management and investors that supplement our core operating results.
Magic believes that it is a measure of adjusted EBITDA provides useful information to both management and investors.
Our core operating results our earnings release, which is posted on the Jimmy Dotcom IR page includes a reconciliation of consolidated adjusted EBITDA to its nearest comparable GAAP measures consolidated net income and income from operations for all periods presented in addition, adjusted EBITDA for applicable segments are reconciled in the earnings.
Speaker 3: Arning's release, which is posted on the genie.com IR page, includes a reconciliation of Consolidated Justice of EBITDA to its nearest comparable GAT measures. Consolidated that income and income from operations for all periods presented. In addition, an adjusted event that for applicable segments are reconciled in the earnings release to their respective segments of income from operations for all periods presented. Now, turn the conference over to Michael Stein, Genie's chief executive buff.
Released to their respective segments income from operations for all periods presented.
I'll now turn the conference over to Michael Stein Genie, <unk>, Chief Executive Officer.
Speaker 4: Thank you, Brian . Welcome to Genie Energy's third quarter earnings call. Our momentum from the first half of the year continued into Q3 with record quarterly revenues and nearly $19 million in adjusted divida driven mainly by GRE's investments in retail customer acquisition since early in the year. Additionally, Genie renewables or GRU continued to expand its pipeline of potential projects while moving forward in the construction process with two of its projects.
Thank you, Brian and welcome to Genie Energy's third quarter earnings call our momentum from the first half of the year continued into Q3 with record quarterly revenues and nearly $90 million and adjusted EBITDA, driven mainly by <unk> investments and retail customer acquisition since early in the year. Additionally, Genie renewable.
<unk> or group continued to expand its pipeline of potential projects, while moving forward in the construction process with two of its projects.
Speaker 4: At GRE, we added 60,000 growth new meters in the quarter, up 81% from Q3 of last year. However, we were less aggressive in adding customers compared to the first half of the year, and therefore, RCE and meters were essentially flat sequentially, despite year over year growth of 49% and 42% respect.
At GRE, we added 60000 gross new meters in the quarter up 81% from Q3 of last year. However, we were less aggressive in adding customers compared to the first half of the year and therefore RCN meters were essentially flat sequentially, despite year over year growth of 49% and 42% respectively.
Our churn rate was down 30 basis points from last year at four 4%, while we were not as aggressive as in the first half we continued to capitalize on pockets of customer acquisition opportunities during the quarter.
Speaker 4: Our turn rate was down 30 basis points from last year at 4.4%. While we were not as aggressive as in the first half, we continued to capitalize on pockets of customer acquisition opportunities during the quarter.
Speaker 4: At GRU, we added two projects comprising nine megawatts, tower development pipeline during the quarter, while continuing to build out the two New York projects under construction.
It grew we added two projects comprising nine megawatts tower development pipeline during the quarter, while continuing to build out the June New York projects under construction.
Speaker 4: As a result of our strong performance year to date, and overall 2023 outlook, we are increasing our previous consolidated adjusted EBITDA guidance range of 47 to 55 million to 52 to 57 million. This range increased, reflects our strong third quarter and continued optimism about the business as we head into the...
As a result of our strong performance year to date and overall 2023 outlook, we are increasing our previous consolidated adjusted EBITDA guidance range of 47% to 55 million to $52 million to $57 million. This range increase reflects our strong third quarter and continued optimism about the business as we head into the winter.
Yeah.
Speaker 4: Remember, these results also represent a significant increase from our pre-2022 normalized EBITDA range of $25 to $30 million, and these are consolidated configures even after allowing for our continued investment in GRU. These higher expectations reflect our larger customer base, transition to operating exclusively in domestic retail markets, and our focus on continuously enhancing our analytical and operational capability.
Remember these results also represent a significant increase from our pre 2022 normalized EBITDA range of $25 million to $30 million and these are consolidated figures, even after allowing for our continued investment in growth.
These higher expectations reflect our larger customer base transitioned to operating exclusively in domestic retail markets and our focus on continuously enhancing our analytical and operational capabilities.
Speaker 4: For the fourth quarter, we expect to continue to invest in new retail customer acquisition. With wholesale energy costs remaining at lower levels, we will continue to pursue targeted opportunities created by the higher legacy cost-based rates of certain and common utilities. This organic targeted growth strategy should enable us to expand our meter-based cost effectively, albeit at a lower growth rate than in the first half.
For the fourth quarter, we expect to continue to invest in new retail customer acquisition with wholesale energy costs remaining at lower levels. We will continue to pursue targeted opportunities created by the higher legacy cost based rates of certain incumbent utilities. This organic targeted growth strategies should enable us to expand our meter base cost effectively.
At a lower growth rate than in the first half of the year looking to the fourth quarter for group, we are making making solid progress toward completing our Perry New York Solar farm and are in the construction phase for our Atlanta, New York Project of course, we will also continue looking for opportunities to expand our pipeline of potential projects to wrap up we delivered yet another.
Speaker 4: Looking to the fourth quarter for GRU, we are making solid progress toward completing our Pairing New York Solar Farm and our in the construction phase for our Lansing New York Project. Of course, we will also continue looking for opportunities to expand our pipeline of the potential projects.
Speaker 4: To wrap up, we delivered yet another quarter of strong operational and financial results, while continuing to position ourselves to create incremental medium to long-term value with our solar pipeline. Now, I'll turn the call over to Avi for his discussion of the Q-
Our strong operational and financial results, while continuing to position ourselves to create incremental medium to long term value with our solar pipeline now I will turn the call over to Avi for his discussion of Q3 financial results. Thank you Michael and thanks to everyone on the call for joining US. This morning, My remarks today focus on our financial results for the three months.
Speaker 5: Thank you, Michael, and thanks to everyone on the call for joining us this morning. Mar-Marx today focused on our financial results for three months ended September 30th, 2020.
Ended September 32023.
Throughout my remarks, I will primarily compare third quarter of 2023 results to the third quarter of 2022.
Speaker 5: Throughout my remarks, I will primarily compare a third quarter of 2023 results to third quarter of 2022 to remove from consideration and seasonal factors that are characteristic of our retail energy business.
To remove from consideration of seasonal factors that are characteristic of our retail energy business.
Speaker 5: The third quarter, which includes this year's peak cooling season, is typically characterized by high levels of per meter electricity consumption and low per meter levels of gas use.
The third quarter, which includes this year's peak cooling season is typically characterized by high levels of per meter electricity consumption.
Oh per meter levels of gas usage.
Speaker 5: As Michael mentioned, our third quarter 2023 financial results were highlighted by record quarterly revenue and solid bottom liners.
As Michael mentioned, our third quarter 2023 financial results were highlighted by record quarterly revenue and solid bottom line results consolidated revenue increased $44 million or 54% to $125 million with strong contributions from both GRE and do new renewables.
Speaker 5: Consolid a revenue increased 44 million or 54 percent to 125 million, which strong contributions for both GRE and junior renewables.
At GRE, we increase quarterly revenue, 51% to $120 million driven by the significant investments we've made in customer acquisition. This year.
Speaker 5: At GRE, we increased quarterly revenue 51% to $120 million, driven by the significant investments we've made in customer acquisition.
Speaker 5: sales of electricity increased 55% from the year recorder. A 57% increase in electric meter served coupled with a 13% increase in consumption per meter for a 73% increase in total kilowatt hour sold.
Sales of electricity increased 55% from the year ago quarter.
57% increase in electric meter served coupled with a 13% increase in consumption per meter drove a 73% increase in total kilowatt hour sold.
Speaker 5: At junior renewables, revenue increased to 4.7 million on growth with in solar, diversity, and city.
At Genie renewables revenue increased to $4 7 million on growth within solar diversity and city car.
Speaker 5: Our Consolid Gross Profit and Third Quarter was a very strong at 41 million, yielding a gross margin of 33%. Our gross profit decreased 2 million, or 5% from the Euro Quarter, while our gross margin declined from 41% in the year of quarter. It's important to note that margin 2022 was positively impacted by our decision to reduce customer load in the face of all the commodity prices. In 2023, the margin environment has returned to historical levels, and the company has successfully added profitable...
Sorry, gross profit third quarter was very strong at 41 million, yielding a gross margin of 33%.
Gross profit decreased 2 million or 5% from year ago quarter, while gross margin declined from 41% in the year ago quarter.
It is important to note that margin in 2022 was positively impacted by our decision to reduce customer load in the face of volatile commodity prices.
2023, the margin environment has returned to historical levels. The company has successfully added profitable meters.
Speaker 5: Consolidated SQNA increased 20% to 23 points.
Solidago SG&A increased 20% to $23 2 million pets.
Speaker 5: At GRB, a sheet rate increased 19% to 18.8 million, triggered by increased customer acquisition.
At GRE SG&A increased 19% to $18 8 million driven by increased customer acquisition expense.
Speaker 5: Junior removal of SGNA increased 63% to 2.3 million as we continue to expand Genie Solar's operational capability.
Renewables SG&A increased 63% to $2 $3 million as we continue to expect Genie soldiers' operational capabilities.
Corporate SG&A decreased from $2 4 million to $2 1 million in the quarter.
Speaker 5: Corporate SG-9 decreased from 2.4 million to 2.1.
Solid income from operations was $17 9 million, while adjusted EBITDA was $18 $5 million, both decreased 24% from their respective levels in the year ago quarter, reflecting both the reduction in gross profit and increased SG&A expense, Jeremy delivered 22 million income from operations compared to $27 4 million a year ago adjusted.
Speaker 5: Solided income from operations with 17.9 million, while adjusted EBITDA was 18.5 million. Both decreased 24% from their respective levels near a row quarter, reflecting both the reduction gross profit and increased estrogenate.
Speaker 5: GRB delivered 22 million in income from operations compared to 27.4 million a year ago. Adjusted EBITDAQ with 22.3 million compared to 27.7 million a year earlier.
EBITDA was $22 3 million compared to $27 7 million a year earlier.
And she knew renewables the loss from operations increased to $2 1 million from $1 5 million Windows was impacted by an $820000 write down the value of our solar panel inventory diluted EPS from continuing operations, which excludes any impact from our discontinued international operations decreased to 54 cents in the third quarter of 2023 from 85.
Speaker 5: At junior renewables, the loss from operations increased to 2.1 million from 1.5 million. When the loser was impacted by an $820,000 write down in the value of our solar panel.
Speaker 5: The loot of the EPS from continuing operations, which includes any impact from our discontinued international operations, decreased to 54 cents in the third quarter of 2023 from 85 cents a year earlier.
To your earlier.
Genius third quarter diluted EPS was <unk> 53 on net income attributable Genie common stockholders of $14 5 million compared to EPS of <unk> 70 on net income attributable Genie common stockholders of $18 3 million a year ago quarter and the year.
Speaker 5: June 3rd, D alluded EPS was 53 cents on net income attributable to income and stockholders of 14.5 million compared to EPS at 70 cents on net income attributable to income and stockholders of 18.3 million in the year ago quarter. In the year ago quarter, we exited our remaining international businesses in Scandinavia and booked a $3.9 million loss from existing new operations compared to a loss from discontinued operations of 300,000 in this quarter.
So a quarter, we exited our remaining international businesses in Scandinavia, and booked a $3 9 million dollar loss from discontinued operations compared to a loss from discontinued operations of 300000 in this quarter.
Speaker 5: Gini Energy's balance sheet continues to strengthen during the quarter. Cash, restricted cash, and marketable securities increased by $28.7 million sequentially to $143.8 million. Working capital was $164.4 million, and non-current liabilities totaled just $2.5 million. Rapid market. In the third quarter a year ago, we capitalized on the unprecedented market volatility to achieve exceptional margins in our retail business. This quarter's results represent a solid performance under more normalized market conditions.
Energy is that she can see interest rates during the quarter cash restricted cash and marketable securities increased by $28 7 million sequentially to $143 8 million working capital was $164 4 million and non current liabilities totaled just $2 5 million rebate in the third quarter a year ago, we capitalize on the unprecedented market.
Volatility to achieve exceptional margins in our retail business. This quarter's results represent a solid performance under a more normalized market conditions.
Speaker 5: GRE benefited significantly from the investments we've made this year to build our customer base and is well positioned for a strong finish 2023 Mb.
Already benefited significantly from the investments you've made this year to build our customer base and is well positioned for a strong finish to 2023 and beyond.
Speaker 5: At Genea Renewables, we continue to advance our pipeline of utility-scale solar projects while building out our capabilities for commercial solar development. Anchal standpoint, we're particularly well positioned for a high interest rate environment.
Hygiene renewables, we continue to advance our pipeline of utility scale solar projects, while building out our capabilities for commercial solar development actual standpoint, we're particularly well positioned for high interest rate environment.
Speaker 5: With our strong business performances and unlearned balance sheet, we continue to put robust cash flows and a very skilled business to work to expand that business's market conditions permit, while prudently investing in promising solar development projects that will accrue significantly to our bottom line results in the coming years. And accomplish this while continuing to return value to our stockholders. Now operator, back to you for Q&A.
With a strong business performances and Unlevered balance sheet, we continue to put robust cash flows and for our retail business to work to expand that business as market conditions permit while prudently investing in promising solar development projects.
Significantly to our bottom line results in the coming years and accomplish this while continuing to return value to our stockholders now operator back to you for Q&A.
Speaker 2: Thank you. At this time, we will be conducting a question in here.
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