SECURITIES AND EXCHANGE COMMISSION
☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☑ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Title of each class | Trading Symbol | Name of each exchange on which registered | ||
Ordinary Shares, par value NIS 10.00 per share | ELLO | NYSE American LLC |
Title of Class
1 | Does not include a total of 258,046 ordinary shares held at that date as treasury shares under Israeli law, all of which were repurchased by Ellomay. For so long as such treasury shares are owned by Ellomay they have no rights and, accordingly, are neither eligible to participate in or receive any future dividends which may be paid to Ellomay’s shareholders nor are they entitled to participate in, be voted at or be counted as part of the quorum for, any meetings of Ellomay’s shareholders. |
Large accelerated filer ☐ | Accelerated filer ☑ | Non-accelerated filer ☐ | Emerging growth company ☐ |
U.S. GAAP ☐ | International Financial Reporting Standards as issued ☑ | Other ☐ |
by the International Accounting Standards Board |
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Part I | ||
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Part II | ||
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Part III | ||
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209 |
• | risks related to projects that are in the development stage, among other issues due to the inability to obtain or maintain licenses or project finance; |
• | regulatory changes and government interventions impacting electricity prices and other changes in electricity prices, including their impact on the fair value of financial instruments and assets; |
• | weather conditions and various meteorological and geographic factors; |
• | our EPC contractors’ and our other contractors’ and service providers’ technical, professional and financial ability to construct, install, test and commission a renewable energy plant and to provide us with the required services and support; |
• | our contractors’ technical, professional and financial ability to deliver on and comply with their operation and maintenance, or O&M, undertakings in connection with the operation of our renewable energy plants; |
• | dependency on the availability of financial incentives and government subsidies and on governmental regulations for our operating renewable energy projects and projects under development and the potential reduction or elimination, including retroactive amendments, of the government subsidies and economic incentives applicable to, or amendments to regulations governing the, renewable energy markets in which we operate or to which we may in the future enter; |
• | defects in the components of the renewable energy plants we operate or theft of various components; |
• | our ability to meet our obligations, undertakings and financial covenants under various financing agreements, including to our debenture holders, our ability to raise additional equity, debt or other types of financing in the future and the limitations imposed on us in the deeds of trust governing our debentures; |
• | risks due to our current debt, which has increased in recent years, and in connection with debt incurred in the future; |
• | our inability to generate a positive cashflow from our operations; |
• | risks relating to operations in foreign countries, including cross currency movements, payment cycles and tax issues; |
• | our inability to locate land suitable or sufficient for the needs of the projects that we develop and potential disagreements with landowners; |
• | natural disasters, terrorist attacks, other catastrophic events, cyber attacks and information technology or telecommunication system disruptions; |
• | changes in the prices of the components or raw materials required for the production of renewable energy; |
• | our dependency on revenues and cash flows from the Talasol PV Plant; |
• | risks in connection with our Waste-to-Energy, or WtE, projects in the Netherlands, including shortages, insufficient quality or changes in prices of raw materials, increase in delivery prices and environmental and other regulatory changes; |
• | risks relating to our Israeli operations, including the centralized electricity market and exposure to damages due to hostile attacks; |
• | the risks we are exposed to due to our holdings in U. Dori Energy Infrastructures Ltd., or Dori Energy, and Dorad Energy Ltd. ,or Dorad, including risk factors generally applicable to electricity manufacturers and our joint control of Dori Energy and lack of control of Dorad, restrictions on our right to transfer our holdings in Dori Energy, regulatory changes applicable to Dorad, shortages of gas, exposure to changes in the Israeli consumer price index and exchange rates and involvement in legal proceedings; |
• | the market, economic and political factors in the countries in which we operate; |
• | our ability to maintain expertise in the energy market, and to track, monitor and manage the projects which we have undertaken; |
• | competition and changes in the renewable energy markets; |
• | future disagreements with our partners who own a portion of the renewable energy plants; |
• | dependency on payments received from governmental entities; |
• | fluctuations in the value of currency and interest rates; |
• | risks related to our incorporation and location in Israel, including security risks and political risks; |
• | risks related to economic uncertainty and exposure to the impact of the military conflict between Russia and Ukraine; |
• | our plans with respect to the management of our financial and other assets and our ability to identify, evaluate and consummate additional suitable business opportunities and strategic alternatives; |
• | we are controlled by a small group of shareholders and, as a foreign private issuer, may rely on home country practices with respect to certain matters; |
• | the price, market liquidity and volatility of our ordinary shares, potential future dilutions and listing on two markets; |
• | dependency on key management and personnel; |
• | the effects of the Covid-19 pandemic on the development, construction and operation of projects, including in connection with actions taken by governments and authorities, delays in construction due to quarantine and other measures, changes in regulation, changes in the price of electricity and in the consumption of electricity; |
• | our inability to maintain effective internal controls over financial reporting; |
• | impact of provisions of Israeli law on our shareholders’ ability to enforce US judgements on us, on the ability to acquire us or a controlling position in our company, on rights and obligations of shareholders; |
• | exposure to legal and administrative proceedings and tax audits; and |
• | we have not paid any cash dividends since 2016. |
A. | [Reserved] |
B. | Capitalization and Indebtedness |
C. | Reasons for the Offer and Use of Proceeds |
D. | Risk Factors |
• | As the raw materials used to produce energy in the WtE market are not freely available (as is the case with wind and solar energies), the success of a WtE plant depends, among other things, on the prices of feedstock required in order to maintain the optimal mix of feedstock necessary to maximize performance of the plants and meet a certain of range of energy (gas, electricity or heat) production levels. In order to ensure a continuous supply of raw materials, both in terms of the quantity and the quality and composition of the raw materials, a WtE plant is required to enter into supply relationships with several feedstock suppliers, such as farmers, food manufacturers and other specialized feedstock suppliers and to continuously monitor the proposed transactions to locate the most efficient and beneficial offers. Any increase in the price of feedstock or shortage in the type or quality of feedstock required to produce the desired energy levels with the technology used by the plant could slow down or halt operations, causing a material adverse effect on the results of operations. The price and quality of the feedstock mix might also increase the plant’s operating costs, either due to the need to purchase a more expensive feedstock mix to meet the desired energy production levels, or due to an increase in residues and the resulting increase of surplus quantities that require removal. In addition to the impact of the quality of the feedstock on the production levels, maintaining and monitoring the feedstock quality is crucial for preventing malfunctions in the process, for example due to high levels of certain chemicals that might harm the CHP engines. Additionally, a wrong feedstock mix and/or low feedstock quality might create biology problems such as lower bacteria population, which directly adversely impacts biogas production. Therefore, any shortage of quality feedstock and changes in the feedstock mix available for use could have a material adverse effect on the results of operations of our WtE plants. As a result of the Russia-Ukraine military conflict, our WtE plants experienced a shortage of raw materials and feedstock, which impacted the composition of the materials used by the facilities and their production. |
• | The operation of WtE facilities is highly complex and requires ongoing supervision and maintenance. Several factors may impact the efficiency of the facilities, including the availability and cost of feedstock, the composition of feedstock, malfunctions and damages. In addition, following a correction of malfunctions that disables the system, the facility does not generally return to maximum capacity immediately and the startup is implemented gradually. Although we have insurance policies that cover damages and loss of revenue upon certain events, these insurance policies may not cover all damages or be available to us in the future, on acceptable terms or at all. |
• | The expense level and profitability of WtE plants depends on many factors, many of which are not within our control. For example, the recent increase in fuel prices increased transportation costs and operating expenses of our WtE plants and the increase in electricity prices increased the costs of operations of our Gelderland biogas plant, that did not produce electricity for self-use during 2022. Any future increase in expenses could materially impact the results of operations and financial condition of our WtE plants. |
• | The WtE industry is subject to many laws and regulations which govern the protection of the environment, quality control standards, health and safety requirements, and the management, transportation and disposal of different types of waste. Environmental laws and regulations may require removal or remediation of pollutants and may impose civil and criminal penalties for violations. The costs arising from compliance with environmental laws and regulations may increase operating costs for our WtE plants and we may be exposed to penalties for failure to comply with such laws and regulations. In addition, existing regulation governing waste management and waste disposal provide incentives to feedstock suppliers to use waste management solutions such as the provision of feedstock to WtE plants. Any regulatory changes that impose additional environmental restrictions on the WtE industry or that relieve feedstock suppliers from the stringent regulation concerning waste management and disposal could increase our operating costs, limit or change the cost of the feedstock available to us, and adversely affect our results of operations. |
• | Electricity tariffs, which are determined and updated solely by the Israeli Electricity Authority, have a material impact on the results of operations of Dorad. |
• | The operation of the Dorad Power Plant is highly complex and depends upon the continued ability: (i) to operate the various turbines, and (ii) to turn the turbines on and shut them down quickly based on demand. The profitability of Dorad also depends on the accuracy of the proprietary forecasting system used by Dorad. Any defects or disruptions, or inaccuracies in forecasts, may result in an inability to provide the amount of electricity required by Dorad’s customers or in over-production, both of which could have a material adverse effect on Dorad’s operations and profitability. |
• | Dorad’s operations depend upon the expertise and success of its operations and maintenance contractor, who is responsible for the day-to-day operations of the Dorad Power Plant. If the services provided by such contractor will cause delays in the production of energy or any other damage to the Dorad Power Plant or to Dorad’s customers, Dorad may be subject to claims for damages and to additional expenses and losses and therefore Dorad’s profitability could be adversely affected. Dorad also depends on certain sole suppliers for services, including the IEC, which distributes the electricity manufactured by Dorad to Dorad’s customers and Israel Natural Gas Lines Ltd., who delivers the gas required for Dorad’s operations. Any disagreement or disruption of these services could adversely impact Dorad’s operations. |
• | Significant equipment failures may limit Dorad’s production of energy. Although damages from equipment failures generally covered by insurance policies, any such failures may cause disruption in the production, may not all be covered by the insurance and the correction of such failures may involve a considerable amount of resources and investment and could therefore adversely affect Dorad’s profitability. |
• | Dorad’s operations depend on the availability and accurate function of its information technology, communications and data retrieval and analysis systems. As such, Dorad is exposed to risks of cyber-attacks, either directed specifically at Dorad or at infrastructure or Israeli sites in general. The occurrence of a cyber-attack may halt Dorad’s operations and result in damages to Dorad’s financial results and reputation. |
• | The construction of the Dorad Power Plant was mainly financed by a consortium of financing entities pursuant to a long-term credit facility and such credit facility provides for pre-approval by the consortium of certain of Dorad’s actions and contracts with third parties and further includes a list of events that may enable the lenders to demand immediate repayment of the credit facility. Changes in the credit ratings of Dorad and its shareholders, non-compliance with financing and other covenants, delays in provision of required pre-approvals or disagreements with the financial entities, material changes in Dorad’s licenses or a loss of license by Dorad and additional factors may trigger certain rights granted to the lenders under the financing documents and may adversely affect Dorad’s operations and profitability. |
• | Dorad entered into a long-term natural gas supply agreement, or the Tamar Agreement, with the partners in the “Tamar” license located in the Mediterranean Sea off the coast of Israel, or Tamar. This agreement includes a “take or pay” mechanism, subject to certain restrictions and conditions that may result in Dorad paying for natural gas not actually required for its operations. In addition, in November 2022, Dorad started purchasing natural gas from Energean Israel Ltd., or Energean. Dorad’s operations depend on the timely, continuous and uninterrupted supply of natural gas from Tamar and Energean and on the existence of sufficient reserves throughout the term of the agreements with Tamar and Energean. Any disruptions in the gas supply, could adversely impact Dorad’s operations and results of operations. In addition, the price of natural gas under the supply agreements with Tamar and Energean is linked to production tariffs determined by the Israeli Electricity Authority but cannot be lower than the “final floor price” included in the agreements. In the event of future reductions in the production tariff, the price of gas may reach the “floor price” and thereafter will not be further reduced. Any delays, disruptions, increases in the price of natural gas under the agreement, or shortages in the gas supply from Tamar or Energean will adversely affect Dorad’s results of operations. |
• | The Dorad power plant is subject to environmental regulations, aimed at increasing the protection of the environment and reducing environmental hazards, including by way of imposing restrictions regarding noise, harmful emissions to the environment and handling of hazardous materials. Currently the costs of compliance with the foregoing requirements are not material. Any breach or other noncompliance with the applicable laws may cause Dorad to incur additional costs due to penalties and fines and expenses incurred in order to regain compliance with the applicable laws, all of which may have an adverse effect on Dorad’s profitability and results of operations. |
• | Due to the agreements with contractors of the Dorad Power Plant and the indexation included in the gas supply agreement, Dorad is exposed to changes in the exchange rates of the U.S. dollar against the NIS. To minimize this exposure Dorad executed forward transactions to purchase U.S. dollars against the NIS. In addition, due to the indexing to the Israeli consumer price index under Dorad’s credit facility, Dorad is exposed to fluctuations in the Israeli CPI, which may adversely affect its results of operations and profitability. For example, Dorad’s financing expenses increased during 2022 due to an increase in the Israeli CPI of approximately 5.3% during the year. Dorad entered into hedging transaction in order to minimize the risk. |
• | Dorad is involved in several arbitration and court proceedings initiated by Dorad’s shareholders, including Dori Energy. Disagreements and disputes among shareholders may interfere with Dorad’s operations and specifically with Dorad’s business plan and potential growth. |
• | The electricity production sector in Israel has expanded and evolved during recent years, with the introduction of privately held electricity production facilities. Dorad is subject to competition from existing or new electricity producers, who will attempt to sell electricity directly to private customers, including Dorad’s customers or potential customers. The added competition may reduce the rates received by Dorad and therefore decrease its revenues and profitability. |
• | Dorad is required to make payments to various third parties, including the financing consortium, the gas suppliers, the O&M contractor and the gas transmission service provider. In the event Dorad will not have sufficient liquidity to comply with its payment obligations, its operations and financial results may be materially adversely impacted. |
• | The Covid-19 crisis affected Dorad’s customers (which include hotels and other industrial customers), and therefore any decrease in electricity consumption by Dorad’s customers and in Israel generally (affecting the amount of electricity purchased by the IEC from Dorad), may affect Dorad’s financial results. Dorad is monitoring the re-spreading of the virus and continuously examines the options for dealing with damage to its income. |
• | increasing our vulnerability to adverse economic, industry or business conditions and cross currency movements and limiting our flexibility in planning for, or reacting to, changes in our industry and the economy in general; |
• | requiring us to dedicate a substantial portion of our cash flow from operations to service our debt, thus reducing the funds available for operations and future business development; and |
• | limiting our ability to obtain additional financing to operate, develop and expand our business. |
A. | History and Development of Ellomay |
PV Projects under Development |
i. | a fixed pledge first degree on shares of Dori Energy held by Ellomay Energy LP, representing a 50% ownership of Dori Energy, which holds 18.75% of Dorad; |
ii. | a floating first degree pledge and an assignment by way of a pledge of, and with respect to, Ellomay Energy LP’s rights and agreements in connection with shareholder’s loans provided by Ellomay Energy LP to Dori Energy; and |
iii. | a fixed first degree pledge on our rights and the rights of Ellomay Energy LP in and to a trust bank account in the name of the trustee of the Series E Secured Debentures. |
a. | Our Adjusted Balance Sheet Equity (as such term is defined in the Series E Deed of Trust, which, among other exclusions, excludes changes in the fair value of hedging transactions of electricity prices, such as the PPA executed in connection with the Talasol PV Plant), on a consolidated basis, shall not be less than €75 million for two consecutive quarters for purposes of the immediate repayment provision and shall not be less than €80 for purposes of the update of the annual interest provision; |
b. | The ratio of (a) the short-term and long-term debt from banks, in addition to the debt to holders of debentures issued by us and any other interest-bearing financial obligations provided by entities who are in the business of lending money (excluding financing of projects and other exclusions as set forth in the Series E Deed of Trust), net of cash and cash equivalents, short-term investments, deposits, financial funds and negotiable securities, to the extent that these are not restricted (with the exception of a restriction for the purpose of securing any financial debt according to this definition), or, together, the Series E Net Financial Debt, to (b) our Adjusted Balance Sheet Equity, on a consolidated basis, plus the Series E Net Financial Debt, or our Series E CAP, Net, to which we refer herein as the Series E Ratio of Net Financial Debt to Series E CAP, Net, shall not exceed the rate of 65% for three consecutive quarters for purposes of the immediate repayment provision and shall not exceed a rate of 60% for purposes of the update of the annual interest provision; and |
c. | The ratio of (a) our Series E Net Financial Debt, to (b) our earnings before financial expenses, net, taxes, depreciation and amortization, where the revenues from our operations, such as the Talmei Yosef project, are calculated based on the fixed asset model and not based on the financial asset model (IFRIC 12), and before share-based payments, when the data of assets or projects whose Commercial Operation Date occurred in the four quarters that preceded the test date will be calculated based on Annual Gross Up (as such terms are defined in the Series E Deed of Trust), based on the aggregate four preceding quarters, or our Series E Adjusted EBITDA, to which we refer to herein as the Series E Ratio of Net Financial Debt to Series E Adjusted EBITDA, shall not be higher than 12 for three consecutive quarters for purposes of the immediate repayment provision and shall not be higher than 11 for purposes of the update of the annual interest provision. |
B. | Business Overview |
• | Reliability - Solar energy production does not require fossil fuels and is therefore less dependent on this limited natural resource with volatile prices. Although there is variability in the amount and timing of sunlight over the day, season and year, a properly sized and configured system can be designed to be highly reliable while providing long-term, fixed price electricity supply. |
• | Convenience - Solar power systems can be installed on a wide range of sites, including small residential roofs, the ground, covered parking structures and large industrial buildings. Most solar power systems also have few, if any, moving parts and are generally guaranteed to operate for 20-25 years, resulting in low maintenance and operating costs and reliability compared to other forms of power generation. |
• | Cost-effectiveness - While solar power has historically been more expensive than fossil fuels, there are continual advancements in solar panel technology which increase the efficiency and lower the cost of production, thus making the production of solar energy even more cost effective. |
• | Environmental - Solar power is one of the cleanest electric generation sources, capable of generating electricity without air or water emissions, noise, vibration, habitat impact or waste generation. In particular, solar power does not generate greenhouse gases that contribute to global climate change or other air pollutants, as power generation based on fossil fuel combustion does, and does not generate radioactive or other wastes as nuclear power and coal combustion do. It is anticipated that environmental protection agencies will limit the use of fossil fuel based electric generation and increase the attractiveness of solar power as a renewable electricity source. |
• | Security - Producing solar power improves energy security both on an international level (by reducing fossil energy purchases from hostile countries) and a local level (by reducing power strains on local electrical transmission and distribution systems). |
Name | Installed Production / Capacity1 | Location | Type of Plant | Connection to Grid | Fixed Tariff | Revenue in the year ended December 31, 2021 (in thousands)2 | Revenue in the year ended December 31, 2022 (in thousands)2 |
“Rinconada II” | 2,275 kWp | Municipality of Córdoba, Andalusia, Spain | PV – Fixed Panels | July 2010 | N/A | €698 | €946 |
“Rodríguez I” | 1,675 kWp | Province of Murcia, Spain | PV – Fixed Panels | November 2011 | N/A | €550 | €684 |
“Rodríguez II” | 2,691 kWp | Province of Murcia, Spain | PV – Fixed Panels | November 2011 | N/A | €907 | €1,109 |
“Fuente Librilla” | 1,248 kWp | Province of Murcia, Spain | PV – Fixed Panels | June 2011 | N/A | €432 | €525 |
“Talmei Yosef” | 9,000 kWp | Talmei Yosef, Israel | PV – Fixed Panels | November 2013 | 0.98573 (NIS/kWh) | €1,0164 | €1,1194 |
“Talasol”5 | 300,000 kWp | Talaván, Cáceres, Spain | PV – Fixed Panels | December 2020 | N/A | €28,494 | €32,740 |
“Ellomay Solar” | 28,000 kWp | Talaván, Cáceres, Spain | PV – Fixed Panels | June 2022 | N/A | --6 | €3,597 |
1. | The actual capacity of a photovoltaic plant is generally subject to a degradation of approximately 0.5% per year, depending on climate conditions and quality of the solar panels. |
2. | These results are not indicative of future results due to various factors, including changes in the regulation and in the climate and the degradation of the solar panels. |
3. | The initial tariff of NIS 0.9631/kWh was fixed for a period of 20 years and is updated once a year based on changes to the Israeli CPI of October 2011. The tariff was NIS 0.9946/kWh in 2021 and increased to NIS 1.0185/kWh in 2022. |
4. | As a result of the accounting treatment of the Talmei Yosef PV Plant as a financial asset, out of total proceeds from the sale of electricity of approximately €4.3 million and €4.5 million for the years ended December 31, 2021 and 2022, respectively, only revenues related to the ongoing operation of the plant in the amount of approximately €1 million and €1.1 million for the years ended December 31, 2021 and 2022, respectively. |
5. | The Talasol PV Plant is 51% owned by us and the revenues included in the table reflect 100% ownership. |
6. | As the Ellomay Solar PV Plant was connected to the Spanish national grid during June 2022, no revenues were recorded in connection with this PV Plant for the year ended December 31, 2021 and during the year ended December 31, 2022 until connection to the national grid. |
• | Development Agreement with a local experienced developer for the provision of development services with respect to photovoltaic greenfield projects from initial processing, obtaining of approvals and clearances with the aim of reaching “ready to build” status; |
• | an Engineering, Procurement & Construction projects Contract, or an EPC Contract, which governs the installation, testing and commissioning of a photovoltaic plant by the respective Contractor; |
• | an Operation and Maintenance (O&M) Agreement, which governs the operation and maintenance of the photovoltaic plant by the respective Contractor; and |
• | a number of ancillary agreements, including: |
o | one or more “surface rights agreements” or “lease agreements” with the land owners, which provide the terms and conditions for the lease of land on which the photovoltaic plants are constructed and operated; |
o | optionally, one or more “project financing agreements” with financing entities, as were already executed with respect to several of the PV Plants and as more fully described below, and as may be executed in the future with respect to one or more of the remaining PV Plants; and |
o | a stock purchase agreement in the event we acquire an existing company that owns a photovoltaic plant that is under construction or is already constructed. |
• | Standard “power distribution agreements” with the applicable Spanish power distribution grid company such as Endesa Distribución Eléctrica, S.L.U., or Endesa, or Iberdrola Distribución Eléctrica, S.A.U., or Iberdrola, regarding the rights and obligations of each party, concerning, inter alia, the evacuation of the power generated in the plant to the grid; |
• | Standard “representation agreements” with an entity that will act as the energy sales agent of the PV Plant in the energy market, in accordance with Spanish Royal Decree 436/2004; and |
• | Assignment Contract (“contrato de encargo de proyecto”) and the Technical Access Contract (“Contracto técnico de acceso a la red de transporte”) with Red Eléctrica de España (the Spanish grid operator, or REE). |
• | A power purchase agreement with the IEC for the purchase of electricity by the IEC with a term of 20 years commencing on the date of connection to the grid. |
• | one or more “power purchase agreements” with GSE, specifying the power output to be purchased by GSE for resale and the consideration in respect thereof or, alternatively, a “power purchase agreements” with a private energy broker, specifying the power output to be purchased for resale and the consideration in respect thereof; |
• | one or more “interconnection agreements” with the Enel Distribuzione S.p.A, or ENEL, the Italian national electricity grid operator, which provide the terms and conditions for the connection to the Italian national grid; and |
• | to the extent the FiT or any other incentive will be applicable – standard “incentive agreements” with GSE, Italy’s energy regulation agency responsible, inter alia, for incentivizing and developing renewable energy sources in Italy and purchasing energy and re-selling it on the electricity market. Under such agreements, it is anticipated that GSE will grant the applicable FiT governing the purchase of electricity (FiTs are further detailed in “Material Effects of Government Regulations on the Italian PV Plants”). |
(i) | PV projects with an overall power capacity exceeding 1 MW are subject to the Environmental Impact Assessment screening procedure, or EIA Screening, performed by the relevant region. At the end of the EIA Screening procedure, the competent authority determines whether or not the PV project should be subject to the ordinary Environmental Impact Assessment procedure, or EIA; and |
(ii) | PV projects with an overall power capacity exceeding 10 MW are subject to the EIA performed by the state. |
(i) | PV projects falling within EIA procedure of the regions (i.e., PV projects with a power capacity between 1 MW and 10 MW) are authorized by means of Provvedimento Autorizzatorio Unico Regionale, or PAUR, pursuant to Article 27-bis of the Legislative Decree no. 152/2006, which includes the EIA and the Autorizzazione Unica (“Single Authorization”), or AU, pursuant to Article 12 of Legislative Decree no. 387 of December 29, 2003, or Legislative Decree no. 387/2003, and all other permits / nihil obstat / opinions necessary for the implementation of the PV project; and |
(ii) | PV projects falling within EIA procedure of the state (i.e., PV projects with a power capacity exceeding 10 MW) are authorized by means of the AU which includes the EIA decree. |
a. | Authorization for the construction and operation of PV Plants (Autorizzazione Unica) |
b. | PAUR |
c. | PAS |
(i) | the construction of PV plants of up to 10 MW located in so called “suitable areas” (aree idonee) (which are to be identified on the basis of the criteria set out in Legislative Decree no. 199 of November 8, 2021, as detailed below); and |
(ii) | agri-photovoltaic plants located less than 3 km away from industrial, productive or commercial areas (with no power limitation). |
d. | DILA |
e. | Free building activity (Attività di edilizia libera) |
(i) | in areas for industrial, productive or commercial use; |
(ii) | in closed and restored landfills or landfill lots; or |
(iii) | in quarries or lots of quarries that cannot be exploited further, for which the competent authority for the issue of the authorization has certified the completion of the recovery and environmental restoration activities envisaged in the authorization title in compliance with the regional regulations in force; |
(i) | provided that pending the identification of suitable areas by the regions no moratoria or suspensions of the terms of authorization procedures may be ordered; and |
(ii) | identified some suitable areas. |
(i) | the sites where plants of the same source are already installed and where non-substantial modification works are carried out, as well as, for PV plants only, the sites where, on the date of entry into force of the provision, there are photovoltaic plants on which, without change in the occupied area or otherwise with changes in the occupied area within the limits referred to in (vi)(a) below, substantial modification work is carried out for refurbishment, repowering or complete reconstruction, including with the addition of storage systems with a capacity not exceeding 8 MWh for each MW of power of the photovoltaic plant; |
(ii) | the areas of sites undergoing reclamation; |
(iii) | quarries and mines that have ceased, not reclaimed or abandoned or are in an environmentally degraded condition; |
(iv) | sites and facilities at the disposal of Italian State Railways Group companies and rail infrastructure managers as well as highway concession companies; |
(v) | sites and facilities in the availability of the airport management companies within the perimeter of relevance of the airports of the smaller islands subject to the necessary technical verifications by the National Civil Aviation Authority; |
(vi) | exclusively for photovoltaic plants, including those with ground-mounted modules, in the absence of constraints under Part Two of the Legislative Decree no. 42 of January 22, 2004, or the Cultural Heritage and Landscape Code: |
a) | areas classified as agricultural, enclosed within a perimeter whose points are not more than 500 meters from areas of industrial, artisanal and commercial use, including sites of national interest, as well as quarries and mines; |
b) | areas within industrial plants and establishments, as defined in Legislative Decree no. 152/2006, as well as classified agricultural areas enclosed within a perimeter whose points are no more than 500 meters from the same plant or establishment; |
c) | the areas adjacent to the highway network within a distance not exceeding 300 meters; and |
(vii) | without prejudice to the provisions of points above, areas that are not included in the perimeter of property subject to protection under the Cultural Heritage and Landscape Code, nor fall within the buffer zone of property subject to protection under Part Two or Article 136 of the same Legislative Decree. The buffer strip shall be determined by considering a distance from the perimeter of protected property of 500 metres for photovoltaic plants. |
(i) | in procedures for the authorization of power production facilities powered by renewable sources on suitable areas, including those for the adoption of the environmental impact assessment resolution, the competent authority for landscape matters shall express a mandatory non-binding opinion. After the time limit for the expression of the non-binding opinion has expired, the competent authority shall in any case take action on the permit application; and |
(ii) | the time limits for permit procedures for plants in suitable areas shall be reduced by one-third. |
(i) | by way of sale on the electricity market (Italian Power Exchange - IPEX), the so called “Borsa Elettrica”; |
(ii) | through bilateral contracts with wholesale dealers; and |
(iii) | via the so-called “Dedicated Withdrawal” introduced by ARERA Resolution no. 280/07 and subsequent amendments. This is the most common way of selling electricity, as it affords direct and quick negotiations with the national energy handler (GSE), which will in turn deal with energy buyers on the market. |
a. | FER1 Incentives |
Group A | Includes PV plants of new construction. |
Group A-2 | includes PV plants of new construction whose modules are installed to replace roofs of buildings and farm buildings on which asbestos or fibre cement is completely removed. |
Plant Type | Power level (kW) | Reference Tariff (€/MWh) | A-2 plants Bonus (€/MWh) | Bonus for self-consumption (€/MWh) |
Group A | 20 <P ≤100 | 99.75 | - | 10 |
100 <P ≤1000 | 85.50 | - | - | |
P ≥1000 | 66.50 | - | - | |
Group A-2 | 20 <P ≤100 | 105.00 | 12 | 10 |
100 <P ≤1000 | 90.00 | 12 | - |
(i) | Enrolment in Registers – PV plants with a power capacity of more than 20 kW and less than 1 MW that belong to Groups A and A-2 must be enrolled in the Registers, through which the available power quota is allocated on the basis of specific priority criteria. With respect to plants below 1 MW, the first criterion is the installation of the plant in areas such as closed dumps or mines, or (for A-2 plants) on public buildings such as schools or hospitals. This is aimed at giving preference to environment-friendly plants and therefore, for the avoidance of doubt, such plants will be preferred to other plants even if the tariff reduction set out in the application is lower. |
(ii) | Participation to Auction Procedures – PV plants with a power capacity greater than or equal to 1 MW that belong to Groups A must participate in the Auction Procedures, through which the available power quota is allocated, according to the highest discount offered on the incentive level and, at equal discount, applying further priority criteria. Incentives are awarded for a period of 20 years at the outcome of seven tenders held between September 2019 and September 2021, whereby the effective granted tariff will be equal to the reference tariff as reduced by the percentage reduction offered by the applicant. With respect to plants above 1 MW, the first criterion is instead the tariff percentage reduction. |
(i) | the All-in Tariff (Tariffa Onnicomprensiva, or TO) consisting of a single tariff, corresponding to the incumbent tariff, which also remunerates the electricity withdrawn by the GSE; and |
(ii) | an incentive calculated as the difference between the incumbent tariff and the hourly zonal energy price, since the energy produced remains at the operator’s disposal. |
b. | Red II Decree Incentives |
(i) | as to small plants with a power capacity equal to or less than 1 MW, incentives will be awarded: |
a) | as to plants with market competitive generation costs and plants belonging to energy communities or self-consumption configuration, through direct access to incentives; and |
b) | as to innovative plants and plants with higher generation costs, through tender procedures. |
(ii) | as to big plants, with power capacity above a threshold of at least 1 MW, incentives will be awarded through downward auction procedures. |
(i) | the combination of renewables with storage systems is promoted, so as to enable greater programmability of sources, also in coordination with mechanisms for the development of centralized storage capacity; |
(ii) | priority access is established for PV plants to be built on suitable areas (aree idonee), with the same economic offers; and |
(iii) | participation in incentives is facilitated for those who install PV plants following asbestos removal, with bonus facilities and the widest possible participation modalities. |
(i) | the creation of an online information board with the aim to facilitate the alignment of demand and offer; |
(ii) | the setting-up of a platform for the conclusion of power purchase agreements (as already provided in previous legislation); |
(iii) | the definition of tender schemes for the supply of renewable source energy to public administration through power purchase agreements; and |
(iv) | issuance of an ad hoc regulation in order to inform final customers as to power purchase agreements, also in order to facilitate use thereof by consumers in aggregate shape. |
(i) | PV plants with an output exceeding 20 kW that benefit from fixed feed-in tariffs under the Conto Energia scheme, which do not dependent on market prices (i.e., First, Second, Third and Fourth Conto Energia); and |
(ii) | plants powered by solar, hydroelectric, geothermal and wind power sources with an output exceeding 20 kW that do not benefit from incentive mechanisms, entered into operation before January 1, 2010 (any grid parity plant commissioned before December 31 , 2009). |
a. | Price cap on revenues |
(i) | renewable source plants not covered by Article 15-bis of Decree-Law No. 4 of January 27, 2022, converted, with amendments, by Law No. 25 of March 28, 2022 (i.e., renewable source plants not subject to the “Extra-profits” Measure discussed above); |
(ii) | plants powered by non-renewable sources. |
b. | Calculation method |
(i) | a reference price equal to 180 euros per MWh or, for sources with generation costs higher than the aforementioned price, to a value per technology established in accordance with criteria defined by ARERA, taking into account investment and operating costs and a fair return on investment. To this end, in the case of plants incentivized with one-way mechanisms other than those substituting green certificates, the reference price is equal to the maximum value between the amount of 180 euros per MWh and the tariff payable; |
(ii) | a market price equal to the monthly average of the hourly zonal market price, calculated as a weighted average for non-programmable plants, based on the production profile of the individual plant, and as an arithmetic average for programmable plants, or, for supply contracts entered into before the date of this law that do not fall in the exclusion cases, at the price indicated in the contracts themselves. |
c. | Exclusions |
(i) | to plants with a capacity of up to 20 kW; |
(ii) | to electricity falling under the scope of Article 5-bis of Decree-Law No. 14 of February 25, 2022 (i.e., coal- and oil-fired thermoelectric plants); |
(iii) | to energy subject to supply contracts concluded before December 1, 2022, provided that they are not linked to the price trend of the energy spot markets and that, in any case, they are not entered into at an average price higher than the value as calculated according to the calculation method described above, limited to the period of duration of such contracts; |
(iv) | to electricity subject to withdrawal contracts concluded by the GSE pursuant to Article 16-bis of Decree-Law No. 17 of March 1, 2022, and that, in any case, are not stipulated at an average price higher than the value as calculated according to the calculation method described above, limited to the period of duration of the aforesaid contracts; and |
(v) | to renewable source plants with active incentive contracts that are regulated with a two-way mechanism, renewable source plants with contracts that provide for the withdrawal at an all-inclusive fixed tariff of electricity by the GSE as well as electricity shared within energy communities and self-consumption configurations. |
(i) | price cap for new capacity at €75k/MW; |
(ii) | price cap for existing capacity at €33k/MW; |
(iii) | formula for the calculation of the strike price to be applied to the de-rated capacity production in the Ancillary Services Markets, or ASM. |
(i) | It introduces three principles in the activity of self-consumption: (i) the right to self-consume electricity without charges; (ii) the right to shared self-consumption by one or more consumers to take advantage of economies of scale; and (iii) administrative and technical simplification. |
(ii) | Any consumer – whether or not a direct consumer of the market – may acquire energy through bilateral contracting with a producer. |
(iii) | Regarding access and connection permits: (i) the validity of the access and connection permissions granted prior to the entry into force of Law 24/2013 is extended and the aforementioned permits will expire if they have not obtained the authorization of exploitation, on the later of: (a) before March 31, 2020, or (b) five years from the obtaining of the right of access and connection; (ii) the guarantees to be placed for the access and connection permits are increased from €10/kW to €40/kW; (iii) with regards to the actions carried out in the transport or distribution networks by the owners of the access and connection permits which must be developed by the grid operator or distributor, the promoter must advance 10% of the total investment value to be undertaken within a period not exceeding 12 months. Once the aforementioned amount has been paid and the administrative authorization for the generation facility has been obtained, its holder shall, within four months, enter into an Assignment Contract with the transportation grid operator or distributor, otherwise, the validity of the access and connection permits will expire. |
• | Request of connection permit required in 6 months. |
• | Valid request of Prior Administrative Authorization required in 6 months. |
• | Obtention of environmental permit required in 31 months. |
• | Obtention of Prior Administrative Authorization required in 34 months. |
• | Obtention of Construction Administrative Authorization required in 37 months. |
• | Obtention of Exploitation Authorization required in 5 years. |
E. | Resolution of May 20, 2021, of the CNMC, which establishes the detailed specifications for the determination of the generation access capacity to the transmission network and distribution networks |
F. | Law 7/2021 of climate change and energy transition |
G. | Royal Decree-Law 17/2021, of September 14 |
H. | Royal Decree-law 6/2022 |
I. | Royal Decree-law 11/2022 |
J. | Royal Decree-law 17/2022 |
K. | Royal Decree-law 18/2022 |
L. | Royal Decree-law 20/2022 |
1. | Royal Decree 413/2014 which regulates electricity generation activity using renewable energy sources, cogeneration and waste, or RD 413/2014. |
2. | Order IET/1045/2014 approving the retribution parameters for certain types of generation facilities of electricity from renewable energy sources, cogeneration and waste facilities, or Order 1045/2014. |
3. | Order ETU/130/2017 updating the retribution parameters for certain types of generation facilities of electricity from renewable energy sources, cogeneration and waste facilities, for the purposes of their application to the Regulatory Semi-period beginning on January 1, 2017 and ending on December 31, 2019, or Order 130/2017. |
4. | RDL 17/2019, adopting urgent measures for the necessary adaptation of remuneration parameters affecting the electricity system and responding to the process of cessation of activity of thermal generation plants. |
5. | Order TED/171/2020, updating the retribution parameters for certain types of generation facilities of electricity from renewable energy sources, cogeneration and waste facilities, for the purposes of their application to the Regulatory Period beginning on January 1, 2020, or Order 171/2020. |
6. | Royal Decree-Law 6/2022, of March 29, 2022, adopting urgent measures within the framework of the National Plan for the response to the economic and social consequences of the war in Ukraine. |
7. | Order TED/1232/2022, of December 2, 2022, which updates the remuneration parameters for its application to the year 2022. |
a) | The Specific Remuneration is calculated by reference to a “standard facility” during its “useful regulatory life”. Order 1045/2014 characterized the existing renewable installations into different categories (referred to as IT-category). These categories were created taking into account the type of technology, the date of the operating license and the geographical location of renewable installations. |
b) | According to RD 413/2014, the calculation of the Specific Remuneration of each IT-category shall be performed taking into account the following parameters: |
(i) | the standard revenues for the sale of energy production, valued at the production market prices (currently set at €54.42/MWh, €52.12/MWh and €48.82/MWh for 2020, 2021 and 2022, respectively); |
(ii) | the standard exploitation costs; and |
(iii) | the standard value of the initial investment. For this calculation, only those costs and investments that correspond exclusively to the electricity production activity will be taken into account. Furthermore, costs or investments determined by administrative rules or acts that do not apply throughout Spanish territory will not be taken into account. |
c) | Order 1045/2014 established the relevant parameters applicable to each IT-category. Therefore, to ascertain the total amount of the Specific Remuneration applicable to a particular installation it is necessary to (i) identify the applicable IT-category and (ii) integrate in the Specific Remuneration formula set forth in RD 413/2014 the economic parameters established by Order 1045/2014 for the relevant IT-category and the relevant update regulation (i.e., Order 171/2020). |
d) | The Specific Remuneration is calculated for regulatory periods of six years, each divided into two regulatory semi-periods of three years. The first Regulatory Period commenced July 14, 2013 and terminated on December 31, 2019. The second Regulatory Period commenced January 1, 2020 and terminates December 31, 2025 (the corresponding first Regulatory Semi-Period ends December 31, 2022). |
e) | The Specific Remuneration is designed to ensure a “reasonable rate of return” or profitability that during the first regulatory period (i.e., until December 2019) shall be equivalent to a Spanish 10-year sovereign bond calculated as the average of stock price in the stock markets during the months of April, May and June 2013, increased by 300 basis points (7.398% for plants prior to RDL 9/2013). RDL 17/2019 has fixed the reasonable rate of return for the second Regulatory Period at 7.09%. However, for plants prior to RDL the reasonable rate of return will remain at 7.398% if the conditions set forth in RDL 17/2019 are met (mainly to withdraw from any arbitration procedure, or to renounce any compensation, in connection with the regulatory changes in Spain that modified the remuneration regime). |
f) | Pursuant to RD 413/2014, the revenues from the Specific Remuneration are set based on the number of operating hours reached by the installation in a given year and adjusted to electricity market price deviations. Furthermore, the economic parameters of the Specific Remuneration might be reviewed by the Spanish government at the end of a regulatory period or semi-period, however the standard value of the initial investment and the useful regulatory life will remain unchanged for the entire Regulatory Useful Life of the installation, as determined by Order 1045/2014. |
a. | Tamar has committed to supply natural gas to Dorad in an aggregate quantity of up to approximately 11.2 billion cubic meters (BCM), or the Total Contract Quantity, in accordance with the conditions set forth in the Tamar Agreement. |
b. | The Tamar Agreement will terminate on the earlier to occur of: (i) sixteen (16) years following the commencement of delivery of natural gas to the Dorad power plant or (ii) the date on which Dorad will consume the Total Contract Quantity in its entirety. Each of the parties to the Tamar Agreement has the right to extend the Tamar Agreement until the earlier of: (i) an additional year provided certain conditions set forth in the Tamar Agreement were met, or (ii) the date upon which Dorad consumes the Total Contract Quantity in its entirety. |
c. | Dorad has committed to purchase or pay for (“take or pay”) a minimum annual quantity of natural gas in a scope and in accordance with a mechanism set forth in the Tamar Agreement. The Tamar Agreement provides that if Dorad did not use the minimum quantity of gas as committed, it shall be entitled to consume this quantity every year during the three following years and this is in addition to the minimum quantity of gas Dorad is committed to. |
d. | The Tamar Agreement grants Dorad the option to reduce the minimum annual quantity so that it will not exceed 50% of the average annual gas quantity that Dorad will actually consume in the three years preceding the notice of exercise of the option, subject to adjustments set forth in the Tamar Agreement. The reduction of the minimum annual quantity will be followed by a reduction of the other contractual quantities set forth in the Tamar Agreement. The option described herein is exercisable during the period commencing as of the later of: (i) the end of the fifth year after the commencement of delivery of natural gas to Dorad in accordance with the Tamar Agreement or (ii) January 1, 2020, and ending on the later of: (i) the end of the seventh year after the commencement of delivery of natural gas to Dorad in accordance with the Tamar Agreement or (ii) December 31, 2022. In the event Dorad exercises this option, the quantity will be reduced at the end of a one year period from the date of the notice and until the termination of the Tamar Agreement. This option was exercised by Dorad (see below for additional details). |
e. | The natural gas price set forth in the Tamar Agreement is linked to the production tariff as determined from time to time by the Israeli Electricity Authority, which includes a “final floor price.” Any delays, disruptions, increases in the price of natural gas under the agreement, or shortages in the gas supply from Tamar will adversely affect Dorad’s results of operations. In addition, as future reductions in the production tariff will not affect the price of natural gas under the agreement with Tamar, Dorad’s profitability may be adversely affected. |
f. | Dorad may be required to provide Tamar with guarantees or securities in the amounts and subject to the conditions set forth in the Tamar Agreement. |
g. | The Tamar Agreement includes additional provisions and undertakings as customary in agreements of this type such as compensation mechanisms in the event of shortage in supply, the quality of the natural gas, limitation of liability, etc. |
h. | The Tamar Agreement provides that during an “interim period” (as such term is defined in the Tamar Agreement), the supply of the gas to Dorad will be subject to the quantities of the natural gas that will be available to Tamar at that time after supply of natural gas to other customers of Tamar with which contracts were signed for supply of natural gas prior to the signing of the agreement with Dorad. The Tamar Agreement further provides that the interim period will end when Tamar completes, should it ultimately complete, a project for expansion of the supply capacity of a system for treatment and transfer of natural gas from the Tamar reserve, subject to the fulfillment of preconditions detailed in the agreement. In April 2015, Dorad received a notification from Tamar whereby the “interim period” will begin on May 5, 2015. In November 2016, Dorad received notification from Tamar whereby the interim period will end on September 30, 2020. On January 22, 2020, Dorad received a notification from the partners in the Tamar license that the “interim period” will end on March 1, 2020. According to the notification and the terms of the Tamar Agreement, Tamar considers Dorad as a permanent customer commencing from the end of the “interim period”. |
Plant Title | Installed/ production Capacity | Location | Connection to Grid | Revenue in the year ended December 31, 2021 (in thousands) | Revenue in the year ended December 31, 2022 (in thousands) |
“Groen Gas Goor” | 3 million Nm3 per year | Goor, the Netherlands | November 2017 | €3,394 | €3,207 |
“Groen Gas Oude-Tonge” | 3.8 million Nm3 per year, | Oude-Tonge, the Netherlands | June 2018 | €3,341 | €3,100 |
“Groen Gas Gelderland” | 7.5 million Nm3 per year1 | Gelderland, the Netherlands | April 2017 | €5,951 | €6,333 |
1. | This plant’s permit provides for a subsidy in connection with production of approximately 7.5 million Nm3 per year, however the actual production capacity of the plant is approximately 9.5 million Nm3 per year. |
a. | Purchase of availability from a licensed private producer; |
b. | Payment for availability, start-ups and dynamic benefits; |
c. | The plant is required to be under the full control of the system manager (currently the IEC); |
d. | Capital and operational tariff for availability – including exchange rate linkage, indexes and interests; |
e. | During the first twenty years of its operation, the plant shall be entitled to capital and operational tariff set out in the tariff approval; |
f. | Bonuses and fines mechanism, based on standard technical operational parameters. |
C. | Organizational Structure |
D. | Property, Plants and Equipment |
PV Plant | Size of Property | Location | Owners of the PV Plants/Lands |
“Rinconada II” | 81,103 m² | Municipality of Córdoba, Andalusia, Spain | PV Plant owned by Ellomay Spain S.L. Land held by owners and leased to Ellomay Spain S.L. |
“Rodríguez I” | 65,600 m2 | Lorca Municipality, Murcia Region, Spain | PV Plant owned by Rodríguez I Parque Solar, S.L. Lease Agreement executed between the owners and Rodríguez I Parque Solar, S.L. |
“Rodríguez II” | 50,300 m2 | Lorca Municipality, Murcia Region, Spain | PV Plant owned by Rodríguez II Parque Solar, S.L. Lease Agreement executed between the owners and Rodríguez II Parque Solar, S.L. |
“Fuente Librilla” | 64,000 m2 | Fuente Librilla Municipality, Murcia Region, Spain | PV Plant owned by Seguisolar S.L. Lease Agreement executed between owners and Seguisolar S.L. |
“Talasol” | 6,040,000 m2 | Talavan (Cáceres) – Extremadura Region, Spain | PV Plant owned by Talasol. Lease Agreements executed with the Talavan Municipality, which owns the land |
“Talmei Yosef” | 164,000 m2 | Talmei Yosef, Israel | Lease Agreement executed with the entity that leased the property from the ILA. |
“Ellomay Solar” | 706,400 m2 | Talavan (Cáceres) – Extremadura Region, Spain | PV Plant owned by Ellomay Solar S.L.U. Lease Agreement executed between owners and Ellomay Solar S.L.U. |
A. | Operating Results |
For the year ended December 31, | ||||||||
2022 | 2021 | |||||||
€ in thousands (except per share data) | ||||||||
Revenues | 53,360 | 45,721 | ||||||
Operating expenses | (24,089 | ) | (17,590 | ) | ||||
Depreciation and amortization expenses | (16,092 | ) | (15,116 | ) | ||||
Gross profit | 13,179 | 13,015 | ||||||
Project development costs | (3,784 | ) | (2,508 | ) | ||||
General and administrative expenses | (5,892 | ) | (5,661 | ) | ||||
Share of profits of equity accounted investee | 1,206 | 117 | ||||||
Operating profit (loss) | 4,709 | 4,963 | ||||||
Financing income | 9,565 | 2,931 | ||||||
Financing income (expenses) in connection with derivatives, net | 605 | (841 | ) | |||||
Financing expenses | (12,636 | ) | (28,974 | ) | ||||
Financing expenses, net | (2,466 | ) | (26,884 | ) | ||||
Profit (loss) before taxes on income | 2,243 | (21,921 | ) | |||||
Tax benefit (taxes on income) | (2,103 | ) | 2,281 | |||||
Profit (loss) for the year | 140 | (19,640 | ) | |||||
Profit (loss) attributable to: | ||||||||
Owners of the Company | (357 | ) | (15,090 | ) | ||||
Non-controlling interests | 497 | (4,550 | ) | |||||
Profit (loss) for the year | 140 | (19,640 | ) | |||||
Other comprehensive income (loss) items | ||||||||
that after initial recognition in comprehensive income (loss) were or will be transferred to profit or loss: | ||||||||
Foreign currency translation differences for foreign operations | (7,829 | ) | 12,284 | |||||
Effective portion of change in fair value of cash flow hedges | (28,283 | ) | (13,429 | ) | ||||
Net change in fair value of cash flow hedges transferred to profit or loss | 821 | (3,353 | ) | |||||
Total other comprehensive loss, net of tax | (35,291 | ) | (4,498 | ) | ||||
Total other comprehensive income (loss) attributable to: | ||||||||
Owners of the Company | (19,920 | ) | 3,124 | |||||
Non-controlling interests | (15,371 | ) | (7,622 | ) | ||||
Total other comprehensive loss | (35,291 | ) | (4,498 | ) | ||||
Total comprehensive loss for the year | (35,151 | ) | (24,138 | ) | ||||
Total comprehensive loss for the year attributable to: | ||||||||
Owners of the Company | (20,277 | ) | (11,966 | ) | ||||
Non-controlling interests | (14,874 | ) | (12,172 | ) | ||||
Total comprehensive loss for the year | (35,151 | ) | (24,138 | ) | ||||
Loss per share | ||||||||
Basic loss per share | (0.03 | ) | (1.18 | ) | ||||
Diluted loss per share | (0.03 | ) | (1.18 | ) |
Year ended December 31, | 2022 vs. 2021 Change | |||||||||||||||
(Euro in thousands) | 2022 | 2021 | € | % | ||||||||||||
Spanish PV segment | 3,264 | 2,587 | 677 | 26.17 | ||||||||||||
Ellomay Solar PV segment | 3,597 | - | 3,597 | 100 | ||||||||||||
Talasol PV Segment | 32,740 | 29,432 | 3,308 | 11.24 | ||||||||||||
Israeli PV segment | 1,119 | 1,016 | 103 | 10.1 | ||||||||||||
Dorad segment | 62,813 | 51,630 | 11,183 | 21.66 | ||||||||||||
Netherlands biogas segment | 12,640 | 12,686 | (46 | ) | (0.36 | ) |
Year ended December 31, | 2021 vs. 2020 Change | |||||||||||||||
(Euro in thousands) | 2022 | 2021 | € | % | ||||||||||||
Spanish PV segment | 322 | 472 | (150 | ) | (31.78 | ) | ||||||||||
Ellomay Solar segment | 1,399 | - | 1,399 | 100 | ||||||||||||
Talasol segment | 8,764 | 6,305 | 2,459 | 39 | ||||||||||||
Israeli PV segment | 418 | 367 | 51 | 13.9 | ||||||||||||
Dorad segment | 47,442 | 39,175 | 8,267 | 21.1 | ||||||||||||
Netherlands biogas segment | 13,186 | 10,446 | 2,740 | 26.2 |
For the year ended December 31 | ||||||||
2022 | 2021 | |||||||
€ in thousands | ||||||||
Interest income and consumer price index in Israel in connection to concession project | 3,103 | 2,248 | ||||||
Interest income | 420 | 276 | ||||||
Consumer price index in Israel for loan | (909 | ) | - | |||||
Swap interest | - | - | ||||||
Profit from settlement of derivatives contract | - | 407 | ||||||
Change in fair value of derivatives, net | 605 | (841 | ) | |||||
Debentures interest and related expenses | (2,130 | ) | (3,220 | ) | ||||
Interest and commissions related to projects finance | (6,952 | ) | (5,589 | ) | ||||
Amortization of capitalized expenses related to projects finance | (275 | ) | (12,211 | ) | ||||
Interest on minority shareholder loan | (1,529 | ) | (2,055 | ) | ||||
Bank charges and other commissions | (471 | ) | (137 | ) | ||||
Interest on lease liability | (370 | ) | (367 | ) | ||||
Gain (loss) from exchange rate differences, net | 6,042 | (5,395 | ) | |||||
Total financing expenses, net | (2,466 | ) | (26,884 | ) |
• | Income resulting from exchange rate differences amounting to approximately €6 million in the year ended December 31, 2022, mainly in connection with NIS cash and cash equivalents and our NIS denominated debentures, compared to expenses in the amount of approximately €5.4 million for the year ended December 31, 2021, caused by the 6.6% appreciation of the NIS against the euro during the year ended December 31, 2022, compared to the 10.8% devaluation of the NIS against the euro during the year ended December 31, 2021; |
• | An amount of approximately €15.5 million recorded as of December 31, 2021 in connection with the expected prepayment of Talasol’s previous financing. Such expenses include approximately €3.3 million recorded in connection with the termination of an interest rate swap contract and €12.2 million in connection with the amortization of the outstanding balance of expenses that were capitalized to Talasol’s previous financing; and |
• | Approximately €0.8 million of expenses in connection with the early repayment of our Series B Debentures, which were included in the financing expenses for the year ended December 31, 2021. |
Year ended December 31, | ||||||||
2022 | 2021 | |||||||
(Euro in thousands) | ||||||||
Profit (loss) for the year | 140 | (19,640 | ) | |||||
Financing expenses, net | 2,466 | 26,884 | ||||||
Taxes on income (tax benefit) | 2,103 | (2,281 | ) | |||||
Depreciation and amortization expenses | 16,092 | 15,116 | ||||||
EBITDA | 20,801 | 20,079 |
For the year ended December 31, | ||||||||
2021 | 2020 | |||||||
€ in thousands (except per share data) | ||||||||
Revenues | 45,721 | 9,645 | ||||||
Operating expenses | (17,590 | ) | (4,951 | ) | ||||
Depreciation and amortization expenses | (15,116 | ) | (2,975 | ) | ||||
Gross profit | 13,015 | 1,719 | ||||||
Project development costs | (2,508 | ) | (3,491 | ) | ||||
General and administrative expenses | (5,661 | ) | (4,512 | ) | ||||
Share of profits of equity accounted investee | 117 | 1,525 | ||||||
Other income, net | - | 2,100 | ||||||
Operating profit (loss) | 4,963 | (2,659 | ) | |||||
Financing income | 2,931 | 2,134 | ||||||
Financing income (expenses) in connection with derivatives, net | (841 | ) | 1,094 | |||||
Financing expenses | (28,974 | ) | (6,862 | ) | ||||
Financing expenses, net | (26,884 | ) | (3,634 | ) | ||||
Loss before taxes on income | (21,921 | ) | (6,293 | ) | ||||
Tax benefit | 2,281 | 125 | ||||||
Loss for the year | (19,640 | ) | (6,168 | ) | ||||
Loss attributable to: | ||||||||
Owners of the Company | (15,090 | ) | (4,627 | ) | ||||
Non-controlling interests | (4,550 | ) | (1,541 | ) | ||||
Loss for the year | (19,640 | ) | (6,168 | ) | ||||
Other comprehensive income (loss) items | ||||||||
that after initial recognition in comprehensive income (loss) were or will be transferred to profit or loss: | ||||||||
Foreign currency translation differences for foreign operations | 12,284 | (482 | ) | |||||
Effective portion of change in fair value of cash flow hedges | (13,429 | ) | 2,210 | |||||
Net change in fair value of cash flow hedges transferred to profit or loss | (3,353 | ) | 555 | |||||
Total other comprehensive income (loss), net of tax | (4,498 | ) | 2,283 | |||||
Total other comprehensive income (loss) attributable to: | ||||||||
Owners of the Company | 3,124 | 881 | ||||||
Non-controlling interests | (7,622 | ) | 1,402 | |||||
Total other comprehensive income (loss) | (4,498 | ) | 2,283 | |||||
Total comprehensive loss for the year | (24,138 | ) | (3,885 | ) | ||||
Total comprehensive loss for the year attributable to: | ||||||||
Owners of the Company | (11,966 | ) | (3,746 | ) | ||||
Non-controlling interests | (12,172 | ) | (139 | ) | ||||
Total comprehensive loss for the year | (24,138 | ) | (3,885 | ) | ||||
Loss per share | ||||||||
Basic loss per share | (1.18 | ) | (0.38 | ) | ||||
Diluted loss per share | (1.18 | ) | (0.38 | ) |
Year ended December 31, | 2021 vs. 2020 Change | |||||||||||||||
(Euro in thousands) | 2021 | 2020 | € | % | ||||||||||||
Spanish PV segment | 2,587 | 2,577 | 10 | 0.4 | ||||||||||||
Talasol PV Segment | 29,432 | - | 29,432 | 100 | ||||||||||||
Israeli PV segment | 1,016 | 1,066 | (50 | ) | 4.7 | |||||||||||
Dorad segment | 51,630 | 57,495 | (5,865 | ) | (10.2 | ) | ||||||||||
Netherlands biogas segment | 12,686 | 6,002 | 6,684 | 111.4 |
Year ended December 31, | 2021 vs. 2020 Change | |||||||||||||||
(Euro in thousands) | 2021 | 2020 | € | % | ||||||||||||
Spanish PV segment | 472 | 463 | 9 | 1.9 | ||||||||||||
Talasol Segment | 6,305 | - | 6,305 | 100 | ||||||||||||
Israeli PV segment | 367 | 379 | (12 | ) | (3.2 | ) | ||||||||||
Dorad segment | 39,175 | 44,489 | (5,314 | ) | (11.9 | ) | ||||||||||
Netherlands biogas segment | 10,446 | 4,109 | 6,337 | 154.2 |
For the year ended December 31 | ||||||||
2021 | 2020 | |||||||
€ in thousands | ||||||||
Interest income and consumer price index in Israel in connection to concession project | 2,248 | 1,423 | ||||||
Interest income | 276 | 553 | ||||||
Consumer price index in Israel for loan | - | 103 | ||||||
Swap interest | - | 55 | ||||||
Profit from settlement of derivatives contract | 407 | - | ||||||
Change in fair value of derivatives, net | (841 | ) | 1,094 | |||||
Debentures interest and related expenses | (3,220 | ) | (2,155 | ) | ||||
Interest and commissions related to projects finance | (5,589 | ) | (1,775 | ) | ||||
Amortization of capitalized expenses related to projects finance | (12,211 | ) | (48 | ) | ||||
Interest on minority shareholder loan | (2,055 | ) | (41 | ) | ||||
Bank charges and other commissions | (137 | ) | (230 | ) | ||||
Interest on lease liability | (367 | ) | (494 | ) | ||||
Loss from exchange rate differences, net | (5,395 | ) | (2,119 | ) | ||||
Total financing expenses, net | (26,884 | ) | (3,634 | ) |
• | Financing expenses include expenses in connection with the Talasol PV Plant, previously capitalized to fixed assets, are recognized in profit and loss starting from the connection to the Spanish national grid , consisting of (i) approximately €2.2 million of interest of bank loans, (ii) approximately €0.9 million of swap related payments, (iii) approximately €0.3 million of expenses in connection with Talasol’s project financing, and (iv) approximately €2.1 million of interest accrued on shareholder loans granted by the minority shareholders of Talasol; |
• | An amount of approximately €15.5 million recorded as of December 31, 2021 in connection with the expected prepayment of Talasol’s previous financing. Such expenses include approximately €3.3 million recorded in connection with the termination of an interest rate swap contract and €12.2 million in connection with the amortization of the outstanding balance of expenses that were capitalized to Talasol’s previous financing; and |
• | Approximately €0.9 million of expenses in connection with the early repayment of our Series B Debentures. |
Year ended December 31, | ||||||||
(Euro in thousands) | 2021 | 2020 | ||||||
Loss for the year | (19,640 | ) | (6,168 | ) | ||||
Financing expenses, net | 26,884 | 3,634 | ||||||
Tax benefit | (2,281 | ) | (125 | ) | ||||
Depreciation and amortization expenses | 15,116 | 2,975 | ||||||
EBITDA | 20,079 | 316 |
Year ended December 31, | ||||||||||||
2022 | 2021 | 2020 | ||||||||||
Appreciation (Devaluation) of the NIS against the euro | 6.6 | % | (10.8 | )% | 1.7 | % |
B. | Liquidity and Capital Resources |
a. | in an amount of approximately €3.6 million, granted to Rodríguez I Parque Solar, S.L.U.; |
b. | in an amount of approximately €6 million, granted to Rodríguez II Parque Solar, S.L.U.; |
c. | in an amount of approximately €3 million, granted to Seguisolar, S.L.U.; |
d. | in an amount of approximately €5 million, granted to Ellomay Spain, S.L.; and |
e. | a revolving credit facility to attend the debt service if needed, for a maximum amount of €0.8 million granted to any of the Spanish Subsidiaries. |
a. | a loan in the aggregate amount of approximately NIS 80 million provided during 2013 through 2014, linked to the Israeli CPI and bearing an average annual interest of approximately 4.65%. This loan is payable (principal and interest) every six months commencing June 30, 2014. The final maturity date is December 31, 2031; and |
b. | a loan in the aggregate amount of approximately NIS 25 million provided during 2014, linked to the Israeli CPI and bearing an annual interest of approximately 4.52%. This loan is payable (principal and interest) every six months commencing June 30, 2015 through June 30, 2028. |
a. | Our Series C Adjusted Balance Sheet Equity (as such term is defined in the Series C Deed of Trust, which, among other exclusions, excludes changes in the fair value of hedging transactions of electricity prices, such as the Talasol PPA), on a consolidated basis, shall not be less than €50 million for purposes of the immediate repayment provision and shall not be less than €60 for purposes of the update of the annual interest provision; |
b. | The ratio of (a) the short-term and long-term debt from banks, in addition to the debt to holders of debentures issued by us and any other interest-bearing financial obligations, net of cash and cash equivalents and short-term investments and net of financing of projects, including hedging transactions in connection with such financing, of our subsidiaries, or, together, the Series C Net Financial Debt, to (b) our Series C Adjusted Balance Sheet Equity, on a consolidated basis, plus the Net Financial Debt, or our Series C CAP, Net, to which we refer herein as the Series C Ratio of Net Financial Debt to Series C CAP, Net, shall not exceed the rate of 67.5% for purposes of the immediate repayment provision and shall not exceed a rate of 60% for purposes of the update of the annual interest provision; and |
c. | The ratio of (a) our Series C Net Financial Debt, to (b) our earnings before financial expenses, net, taxes, depreciation and amortization, where the revenues from our operations, such as the Talmei Yosef project, are calculated based on the fixed asset model and not based on the financial asset model (IFRIC 12), and before share-based payments, based on the aggregate four preceding quarters, or our Series C Adjusted EBITDA, to which we refer to herein as the Series C Ratio of Net Financial Debt to Series C Adjusted EBITDA, shall not be higher than 12 for purposes of the immediate repayment provision and shall not be higher than 10 for purposes of the update of the annual interest provision. |
a. | Our Adjusted Balance Sheet Equity (as such term is defined in the Series D Deed of Trust, which, among other exclusions, excludes changes in the fair value of hedging transactions of electricity prices, such as the Talasol PPA), on a consolidated basis, shall not be less than €70 million for two consecutive quarters for purposes of the immediate repayment provision and shall not be less than €75 for purposes of the update of the annual interest provision; |
b. | The ratio of (a) the short-term and long-term debt from banks, in addition to the debt to holders of debentures issued by us and any other interest-bearing financial obligations provided by entities who are in the business of lending money (excluding financing of projects and other exclusions as set forth in the Series D Deed of Trust), net of cash and cash equivalents, short-term investments, deposits, financial funds and negotiable securities, to the extent that these are not restricted (with the exception of a restriction for the purpose of securing any financial debt according to this definition), or, together, the Series D Net Financial Debt, to (b) our Adjusted Balance Sheet Equity, on a consolidated basis, plus the Series D Net Financial Debt, or our Series D CAP, Net, to which we refer herein as the Series D Ratio of Net Financial Debt to Series D CAP, Net, shall not exceed the rate of 68% for three consecutive quarters for purposes of the immediate repayment provision and shall not exceed a rate of 60% for purposes of the update of the annual interest provision; and |
c. | The ratio of (a) our Series D Net Financial Debt, to (b) our earnings before financial expenses, net, taxes, depreciation and amortization, where the revenues from our operations, such as the Talmei Yosef project, are calculated based on the fixed asset model and not based on the financial asset model (IFRIC 12), and before share-based payments, when the data of assets or projects whose Commercial Operation Date occurred in the four quarters that preceded the test date will be calculated based on Annual Gross Up (as such terms are defined in the Series D Deed of Trust), based on the aggregate four preceding quarters, or our Series D Adjusted EBITDA, to which we refer to herein as the Series D Ratio of Net Financial Debt to Series D Adjusted EBITDA, shall not be higher than 14 for three consecutive quarters for purposes of the immediate repayment provision and shall not be higher than 12 for purposes of the update of the annual interest provision. |
Year ended December 31, | ||||||||
2022 | 2021 | |||||||
Euro in thousands | ||||||||
Net cash provided by operating activities | 11,320 | 16,112 | ||||||
Net cash used in investing activities | (28,181 | ) | (105,497 | ) | ||||
Net cash provided by financing activities | 26,510 | 54,196 | ||||||
Effect of exchange rate fluctuations on cash and cash equivalents | (4,420 | ) | 9,573 | |||||
Increase (decrease) in cash and cash equivalents | 5,229 | (25,616 | ) | |||||
Cash and cash equivalents at the beginning of the year | 41,229 | 66,845 | ||||||
Cash and cash equivalents at the end of the year | 46,458 | 41,229 |
C. | Research and Development, Patents and Licenses, etc. |
D. | Trend Information |
E. | Critical Accounting Estimates |
Recoverable amount of cash generating unit |
A. | Directors and Senior Management |
Name | Age | Position with Ellomay |
Shlomo Nehama(1)(2) | 68 | Chairman of the Board of Directors |
Ran Fridrich(1)(2) | 70 | Director and Chief Executive Officer |
Anita Leviant(1)(3)(4) | 68 | Director |
Ehud Gil(1) | 48 | Director |
Dr. Michael J. Anghel(3)(4)(5) | 84 | Director |
Daniel Vaknin(3)(4)(5) | 67 | Director |
Kalia Rubenbach | 44 | Chief Financial Officer |
Ori Rosenzweig | 46 | Chief Investment Officer |
Yehuda Saban | 44 | Director of Operations for Israel and EVP of Business Development |
(1) | Election supported by certain of our major shareholders pursuant to the Shareholders Agreement, dated as of March 24, 2008, between S. Nechama Investments(2008) Ltd. and Kanir Joint Investments (2005) Limited Partnership (See “Item 7.A: Major Shareholders”). |
(2) | Provides management services to the Company pursuant to the Management Services Agreement (See “Item 6.B: Compensation”). |
(3) | Independent Director pursuant to the NYSE American LLC rules. |
(4) | Member of our Audit and Compensation Committees. |
(5) | External Director pursuant to the Companies Law. |
B. | Compensation |
Salary(1) | Management/Consulting Fees | Bonus(4) | Share-Based Payment(2) | Total | ||||||||||||||||
Name and Position | (euro in thousands) | |||||||||||||||||||
Shlomo Nehama, Chairman of the Board | - | 418 | (3) | - | - | 418 | (3) | |||||||||||||
Ran Fridrich, CEO and Director | - | 542 | (3) | - | - | 542 | (3) | |||||||||||||
Yehuda Saban, Director of Operations for Israel and EVP of Business Development | - | 249 | - | 23 | 272 | |||||||||||||||
Kalia Rubenbach, Chief Financial Officer | 303 | - | 78 | 23 | 404 | |||||||||||||||
Ori Rosenzweig, Chief Investment Officer | 298 | - | 137 | 23 | 458 |
1. | Salary and related benefits are paid to our executive officers in NIS. Salary as reported herein includes the recipient’s gross salary plus payment of social and other benefits made by us to or on behalf of the recipient. Such benefits may include, to the extent applicable, payments, contributions and/or allocations for education funds, pension funds, managers’ insurance, severance, risk insurances (e.g., life, or work disability insurance), social security, tax gross-up payments, vacation, car, phone, convalescence pay and other benefits and perquisites consistent with our policies. |
2. | Represents the share-based compensation expenses recorded in our consolidated financial statements for the year ended December 31, 2022, based on the Share-based Compensation fair value, calculated in accordance with accounting guidance for share-based compensation. For a discussion of the assumptions used in reaching this valuation, see Note 1 to our annual financial statements. |
3. | Such amounts are paid pursuant to the terms of the Management Services Agreement. For additional information, see “Management Services Agreement” below. |
4. | Bonus consists of amounts paid during 2022 in connection with 2021. |
a. | With respect to our chief executive officer, a controlling shareholder or a relative of a controlling shareholder, approval is required by the (i) compensation committee, (ii) board of directors and (iii) company’s shareholders with the “special majority” described above (in that order). Subject to certain conditions, the Israeli Companies Law provides an exemption from the shareholder approval requirement in connection with the approval of the Terms of Service and Employment of a CEO candidate. |
b. | With respect to a director, approval is required by the (i) compensation committee, (ii) board of directors and (iii) company’s shareholders with a regular majority (in that order). |
c. | With respect to any other office holder, approval is required by the compensation committee and the board of directors (in that order); however, in the event of an update of existing Terms of Service and Employment, which the Compensation Committee confirms is not material, the approval of the compensation committee is sufficient. |
C. | Board Practices |
a. | monetary liability imposed on the office holder in favor of a third party by a judgment, including a settlement or a decision of an arbitrator which is given the force of a judgment by court order; |
b. | reasonable litigation expenses, including legal fees, incurred by the office holder as a result of an investigation or proceeding instituted against such office holder by a competent authority, which investigation or proceeding has ended without the filing of an indictment or in the imposition of financial liability in lieu of a criminal proceeding, or has ended in the imposition of a financial obligation in lieu of a criminal proceeding for an offence that does not require proof of criminal intent (the phrases “proceeding that has ended without the filing of an indictment” and “financial obligation in lieu of a criminal proceeding” shall have the meanings ascribed to such phrases in Section 260(a)(1a) of the Companies Law) or in connection with an administrative enforcement proceeding or a financial sanction. Without derogating from the generality of the foregoing, such expenses will include a payment imposed on the office holder in favor of an injured party as set forth in Section 52[54](a)(1)(a) of the Securities Law, and expenses that the office holder incurred in connection with a proceeding under Chapters H’3, H’4 or I’1 of the Securities Law or in connection with Article D of Chapter Four of Part Nine of the Companies Law, including reasonable legal expenses, which term includes attorney fees; |
c. | reasonable litigation expenses, including legal fees, which the office holder has incurred or is obliged to pay by the court in proceedings commenced against him by the Company or in its name or by any other person, or pursuant to criminal charges of which he is acquitted or criminal charges pursuant to which he is convicted of an offence which does not require proof of criminal intent; and |
d. | Expenses, including reasonable legal fees, including attorney fees, incurred by the office holder with respect to a proceeding in accordance with the Restrictive Trade Practices Law, 1988, as amended, or the Restrictive Trade Practices Law. |
D. | Employees |
E. | Share Ownership |
Name of Beneficial Owner | Number of Shares Beneficially Held (1) | Percent of Class | ||||||
Shlomo Nehama(2)(4) | 3,588,577 | 27.9 | % | |||||
Ran Fridrich(3)(4) | 2,605,845 | 20.3 | % | |||||
Ehud Gil(5) | 1,666 | * | ||||||
Anita Leviant(5) | 4,000 | * | ||||||
Dr. Michael J. Anghel(5) | 3,500 | * | ||||||
Daniel Vaknin(5) | 1,583 | * | ||||||
Kalia Rubenbach | 3,000 | * | ||||||
Ori Rosenzweig | 3,000 | * | ||||||
Yehuda Saban | 3,000 | * | ||||||
All directors and executive officers as a group | 6,194,422 | 48.3 | % |
1. | As used in this table, “beneficial ownership” means the sole or shared power to vote or direct the voting or to dispose or direct the disposition of any security. For purposes of this table, a person is deemed to be the beneficial owner of securities that can be acquired within 60 days from March 31, 2023 through the exercise of any option or warrant. Ordinary shares subject to options or warrants that are currently exercisable or exercisable within 60 days are deemed outstanding for computing the ownership percentage of the person holding such options or warrants, but are not deemed outstanding for computing the ownership percentage of any other person. The amounts and percentages are based upon 12,852,585 ordinary shares outstanding as of March 31, 2023. This number of outstanding ordinary shares does not include a total of 258,046 ordinary shares held at that date as treasury shares under Israeli law, all of which were repurchased by us. For so long as such treasury shares are owned by us they have no rights and, accordingly, are neither eligible to participate in or receive any future dividends which may be paid to our shareholders nor are they entitled to participate in, be voted at or be counted as part of the quorum for, any meetings of our shareholders. |
2. | According to information provided by the holders, the 3,588,577 ordinary shares beneficially owned by Mr. Nehama consist of: (i) 3,123,604 ordinary shares held by Nechama Investments, an Israeli company, which constitute approximately 24.3% of our outstanding ordinary shares, and (ii) 464,973 ordinary shares held directly by Mr. Nehama, which constitute approximately 3.6% of our outstanding ordinary shares. Mr. Nehama, as the sole officer, director and shareholder of Nechama Investments, may be deemed to indirectly beneficially own any ordinary shares beneficially owned by Nechama Investments, which constitute (together with the shares held directly by him) approximately 27.9% of our outstanding ordinary shares. |
3. | The 2,605,845 ordinary shares beneficially owned by Mr. Fridrich consist of ordinary shares held by Kanir, which constitute approximately 20.3% of our outstanding share capital. Mr. Fridrich is one of two board members and a shareholder of Kanir Investments Ltd., or Kanir Ltd., the general partner in Kanir, and by virtue of his position with Kanir Ltd. may be deemed to indirectly beneficially own the ordinary shares beneficially owned by Kanir. Mr. Fridrich disclaims beneficial ownership of the shares held by Kanir, except to the extent of his pecuniary interest therein, if any. |
4. | By virtue of the 2008 Shareholders Agreement between Nechama Investments and Kanir (see “Item 7.A: Major Shareholders”), Mr. Nehama, Nechama Investments, Kanir and Mr. Fridrich may be deemed to be members of a group that holds shared voting power with respect to 5,729,449 ordinary shares, which constitute approximately 44.6% of our outstanding ordinary shares, and holds shared dispositive power with respect to 5,232,201 ordinary shares, which constitute 40.7% of our outstanding ordinary shares. Accordingly, taking into account the shares directly held by Mr. Nehama, he may be deemed to beneficially own approximately 48.2% of our outstanding ordinary shares. Mr. Nehama and Nechama Investments both disclaim beneficial ownership of the ordinary shares beneficially owned by Kanir and Kanir Ltd., Kanir and Mr. Fridrich disclaim beneficial ownership of the shares held by Nechama Investments. |
5. | (i) Ehud Gil holds currently exercisable options to purchase 1,666 ordinary shares with expiration dates ranging from December 17, 2030 to August 1, 2031 and exercise prices per share ranging between $28.5 - $34.44, (ii) Anita Leviant holds currently exercisable options to purchase 4,000 ordinary shares with expiration dates ranging from August 1, 2028 to August 1, 2031 and exercise prices per share ranging between $8.95 - $28.5, (iii) Dr. Michael J. Anghel holds currently exercisable options to purchase 3,500 ordinary shares with an expiration dates ranging from January 24, 2029 to August 1, 2031 and exercise prices per share ranging between $8.41 - $28.5, and (iv) Daniel Vaknin holds currently exercisable options to purchase 1,583 ordinary shares with expiration dates ranging between December 30, 2030 and August 1, 2031 and exercise prices per share ranging between $28.5 - and $34.3. |
A. | Major Shareholders |
Ordinary Shares Beneficially Owned(1) | Percentage of Ordinary Shares Beneficially Owned | |||||||
Shlomo Nehama (2)(4)(5) | 3,588,577 | 27.9 | % | |||||
Kanir Joint Investments (2005) Limited Partnership (3)(4)(5) | 2,605,845 | 20.3 | % | |||||
Yelin Lapidot Holdings Management Ltd.(6) | 1,741,299 | 13.5 | % | |||||
Clal Insurance Enterprises Holdings Ltd.(7) | 1,422,498 | 11 | % |
(1) | As used in this table, “beneficial ownership” means the sole or shared power to vote or direct the voting or to dispose or direct the disposition of any security as determined pursuant to Rule 13d-3 promulgated under the U.S. Securities Exchange Act of 1934, as amended. For purposes of this table, a person is deemed to be the beneficial owner of securities that can be acquired within 60 days from March 31, 2023 through the exercise of any option or warrant. Ordinary shares subject to options or warrants that are currently exercisable or exercisable within 60 days are deemed outstanding for computing the ownership percentage of the person holding such options or warrants, but are not deemed outstanding for computing the ownership percentage of any other person. The amounts and percentages are based on a total of 12,852,585 ordinary shares outstanding as of March 31, 2023. This number of outstanding ordinary shares does not include a total of 258,046 ordinary shares held at that date as treasury shares under Israeli law, all of which were repurchased by us. For so long as such treasury shares are owned by us they have no rights and, accordingly, are neither eligible to participate in or receive any future dividends which may be paid to our shareholders nor are they entitled to participate in, be voted at or be counted as part of the quorum for, any meetings of our shareholders. |
(2) | The 3,588,577 ordinary shares beneficially owned by Mr. Nehama consist of: (i) 3,123,604 ordinary shares held by Nechama Investments, which constitute approximately 24.3% of our outstanding ordinary shares and (ii) 464,973 ordinary shares and held directly by Mr. Nehama, which constitute approximately 3.6% of our outstanding ordinary shares. Mr. Nehama, as the sole officer, director and shareholder of Nechama Investments, may be deemed to indirectly beneficially own any ordinary shares owned by Nechama Investments, which constitute (together with his shares) approximately 27.9% of our outstanding ordinary shares. |
(3) | Kanir is an Israeli limited partnership. Kanir Ltd., in its capacity as the general partner of Kanir, has the voting and dispositive power over the ordinary shares directly beneficially owned by Kanir. As a result, Kanir Ltd. may be deemed to indirectly beneficially own the ordinary shares beneficially owned by Kanir. Mr. Ran Fridrich, who is a member of our Board of Directors and our Chief Executive Officer and Ms. Anat Raphael, the sister of Mr. Ehud Gil, who is a member of our Board of Directors, are the sole directors of Kanir Ltd. As a result, Mr. Fridrich and Ms. Raphael may be deemed to indirectly beneficially own the ordinary shares beneficially owned by Kanir. In addition, the estate of Mr. Raphael, who passed away in December 2020, is the majority shareholder of Kanir Ltd. and beneficially owns 254,524 ordinary shares, which constitute approximately 2% of our outstanding shares and which constitute, together with Kanir’s holdings, approximately 22.3% of our outstanding ordinary shares. Each of Kanir Ltd., Mr. Fridrich and Ms. Raphael disclaims beneficial ownership of such ordinary shares except to the extent of their respective pecuniary interest therein, if any. |
(4) | By virtue of the 2008 Shareholders Agreement, Mr. Nehama, Nechama Investments, Kanir, Kanir Ltd., and Messrs. Fridrich and Gil may be deemed to be members of a group that holds shared voting power with respect to 5,729,449 ordinary shares, which constitute approximately 44.6% of our outstanding ordinary shares, and holds shared dispositive power with respect to 5,232,201 ordinary shares, which constitute 40.7% of our outstanding ordinary shares. Accordingly, taking into account the shares directly held by Mr. Nehama, he may be deemed to beneficially own approximately 48.2% of our outstanding ordinary shares and taking into account the shares directly held by the estate of Mr. Raphael, the estate may be deemed to own approximately 46.6% of our outstanding ordinary shares. Each of Mr. Nehama and Nechama Investments disclaims beneficial ownership of the ordinary shares beneficially owned by Kanir. Each of Kanir, Kanir Ltd., Mr. Fridrich, Ms. Raphael and the estate of Mr. Raphael disclaims beneficial ownership of the ordinary shares beneficially owned by Nechama Investments. A copy of the 2008 Shareholders Agreement was filed with the Securities and Exchange Commission, or the SEC, on March 31, 2008 as Exhibit 14 to an amendment to a Schedule 13D and is not incorporated by reference herein. |
(5) | The information included in this table concerning the beneficial ownership of Nechama Investments, Kanir, Kanir Ltd., Messrs. Nehama and Fridrich, Ms. Raphael and the estate of Mr. Raphael is based on a Schedule 13D/A submitted on October 13, 2020 and on information provided by the shareholders. |
(6) | Based on a Schedule 13G/A submitted on February 9, 2023 by Mr. Dov Yelin, Mr. Yair Lapidot, Yelin Lapidot Holdings Management Ltd., or Yelin Lapidot, and Yelin Lapidot Mutual Funds Management Ltd., or Yelin Lapidot Mutual. According to the Schedule 13G/A: (i) the securities reported therein are beneficially owned as follows: (a) 1,166,865 ordinary shares, which constitute approximately 9.1% of our outstanding ordinary shares, by mutual funds managed by Yelin Lapidot Mutual and (b) 574,434 ordinary shares, which constitute approximately 4.5% of our outstanding ordinary shares, by provident funds managed by Yelin Lapidot Provident Fund Management Ltd., or Yelin Lapidot Provident, (ii) both Yelin Lapidot Mutual and Yelin Lapidot Provident are wholly-owned subsidiaries of Yelin Lapidot and operate under independent management and make their own independent voting and investment decisions, and (iii) Messrs. Yelin and Lapidot each own 24.38% of the share capital and 25.004% of the voting rights of Yelin Lapidot, and are responsible for the day-to-day management of Yelin Lapidot. Pursuant to the Schedule 13G/A, any economic interest or beneficial ownership in any of the securities covered by the Schedule 13G/A is held for the benefit of the members of the provident funds or mutual funds, as the case may be, and each of Messrs. Yelin and Lapidot, Yelin Lapidot and wholly-owned subsidiaries of Yelin Lapidot, disclaims beneficial ownership of any such securities. |
(7) | Based on a Schedule 13G/A submitted on February 13, 2023 by Clal Insurance Enterprises Holdings Ltd., or Clal. Based on the Schedule 13G/A, the 1,422,498 ordinary shares reported as beneficially owned by Call consist of: (i) 56,115 ordinary shares issuable upon the exercise of warrants to purchase ordinary shares that are exercisable within 60 days that are beneficially held for Clal’s own account and (ii) 1,366,383 ordinary shares that are held for members of the public through, among others, provident funds and/or pension funds and/or insurance policies, which are managed by subsidiaries of Clal, which subsidiaries operate under independent management and make independent voting and investment decisions. Consequently, Clal notes in the Schedule 13G/A that the Schedule 13G/A will not constitute an admission that it is the beneficial owner of more than 56,115 ordinary shares. |
B. | Related Party Transactions |
• | Meisaf, Kanir and Keystone, through their employees, officers and directors, will assist us in all aspects of the management of our company and advise as required from time to time by us; |
• | The position of the CEO, held by Mr. Fridrich, is set at a full-time position and the position of the Chairman of the Board, held by Mr. Nehama, is set at no less than a 77% position; |
• | The CEO services will be provided by Mr. Fridrich through Kanir and Keystone, and the Chairman services will be provided by Mr. Nehama through Meisaf; |
• | Meisaf, Kanir and Keystone are entitled to receive reimbursement for reasonable out-of-pocket business expenses borne by them or any of their employees, directors or officers in connection with the provision of the services; |
• | The management fees are as follows: (i) to Meisaf, an annual amount of NIS 1,386,000 (NIS 115,500 on a monthly basis) plus applicable VAT and (ii) to Kanir and Keystone, an aggregate annual amount of NIS 1,800,000 (NIS 150,000 on a monthly basis) plus applicable VAT, in an initial division of NIS 660,000 to Kanir and NIS 1,140,000 to Keystone or such other division as notified in writing to the Company by Kanir and Keystone. The management fee is the full and final compensation for the provision of the services and shall be in lieu of any and all payments that are due to the Service Providers as Board members, including the right to receive the options to purchase ordinary shares of the Company in accordance with the Company’s 1998 Share Option Plan for Non-Employee Directors; |
• | The Management Services Agreement be in effect until the earlier of: (i) June 30, 2024, (ii) the termination of service of Messrs. Nehama and Fridrich on our Board of Directors, (iii) a date that is six (6) months following the delivery of a written termination notice by Meisaf, Kanir and Keystone to the Company or by the Company to Meisaf, Kanir and Keystone, or (iv) the cessation of provision of Chairman and CEO services. In the event only Meisaf ceases to provide services or only Keystone and Kanir cease to provide services, the Management Services Agreement will continue in full force and effect with respect to the other parties, mutatis mutandis; and |
• | Kanir, Meisaf and Keystone serve as independent contractors of the Company and each of them is solely responsible to any payment it is required to pay its employees and representatives and undertake to indemnify the Company in the event the Company suffers any damage due to a determination that any of them or their affiliates are employees of the Company. |
• | Monthly Salary – Mr. Asaf Nehama will receive a gross monthly salary of NIS 7,000 and a monthly lump sum payment for overtime in the amount of NIS 5,000 (the monthly gross salary together with the monthly lump sum for overtime (i.e. NIS 12,000, or currently approximately $3,490), the Salary). |
• | Social and Ancillary Benefits – Mr. Asaf Nehama will be entitled to all social benefits and rights as required under applicable law (pension, severance pay, convalescence pay, etc.) and as customary in the Company, all based on his Salary. Mr. Asaf Nehama will be subject to the provisions of Section 14 of the Severance Pay Law, 5723-1963. Mr. Asaf Nehama will be entitled to sick leave under law and will be able to use the sick days as customary in the Company. The Company will deposit an amount equal to 7.5% of the Salary to an advanced study fund per Mr. Asaf Nehama’s selection and shall deduct from his Salary an amount equal to 2.5% of the Salary that shall be deposited in said advanced study fund as the employee’s share, as customary in the Company. |
• | Vacation – Mr. Asaf Nehama will be entitled to paid vacation days as determined under the Israeli Annual Vacation Law, 1951 plus two (2) days per year (pro rata) and will be entitled to transfer from year to year up to 15 vacation days. |
• | Reimbursement of Expenses – Mr. Asaf Nehama shall be entitled to reimbursement of expenses, travel expenses and meal expenses based on the policies and amounts as customary in the Company, currently travel expenses in the amount of NIS 300 per month and meal expenses in the amount of NIS 900 per month. |
• | Termination of Employment – the notice period during the first six months of employment will be pursuant to the Israeli Prior Notice of Termination Law, 2001 and thereafter 30 days, as customary in the Company. |
C. | Interests of Experts and Counsel |
A. | Consolidated Statements and Other Financial Information. |
B. | Significant Changes |
A. | Offer and Listing Details |
B. | Plan of Distribution |
C. | Markets |
D. | Selling Shareholders |
E. | Dilution |
F. | Expenses of the Issue |
A. | Share Capital |
B. | Memorandum of Association and Second Amended and Restated Articles |
a. | any amendment to the articles; |
b. | an increase in the company’s authorized share capital; |
c. | a merger; or |
d. | approval of related party transactions that require shareholder approval. |
C. | Material Contracts |
D. | Exchange Controls |
E. | Taxation |
a. | tax-exempt entities or any individual retirement account or Roth IRA; |
b. | banks and other financial institutions; |
c. | insurance companies; |
d. | real estate investment trusts and regulated investment companies; |
e. | broker-dealers; |
f. | traders in securities that elect to use a mark-to-market method of accounting for their securities holdings; |
g. | persons liable for alternative minimum tax; |
h. | “U.S. shareholders” (as defined in Code Section 951(b), generally persons owning directly, indirectly or constructively at least 10% of our shares by vote or value); |
i. | persons that hold ordinary shares as part of a straddle, hedge, conversion transaction or other integrated transaction; |
j. | U.S. expatriates; |
k. | persons whose functional currency is not the U.S. dollar; |
l. | persons that are residents of or have a permanent establishment in a jurisdiction outside the United States or persons who are not U.S. Holders; |
m. | persons who acquired the shares pursuant to the exercise of any employee share option or otherwise as compensation; and |
n. | partnerships or a partner in a partnership. |
(1) | an individual citizen or resident of the United States; |
(2) | a corporation or other entity taxable as a corporation for U.S. federal income tax purposes created or organized in or under the laws of the United States or any political subdivision thereof; |
(3) | an estate the income of which is subject to U.S. federal income tax without regard to its source; or |
(4) | a trust, if such trust was in existence on August 20, 1996 and has validly elected to be treated as a U.S. person for U.S. federal income tax purposes, or if (a) a court within the U.S. can exercise primary supervision over its administration and (b) one or more U.S. persons have the authority to control all of the substantial decisions of such trust. |
(1) | the excess distribution or gain will be allocated ratably over each U.S. Holder’s holding period for the ordinary shares; |
(2) | the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a PFIC, will be treated as ordinary income; and |
(3) | the amount allocated to each other year will be subject to tax at the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year. |
F. | Dividends and Paying Agents |
G. | Statement by Experts |
H. | Documents on Display |
I. | Subsidiary Information |
2022 | 2021 | |||||||
(Euro in thousands) | ||||||||
Audit Fees(1) | 460 | 443 | ||||||
Audit-Related Fees(2) | - | 21 | ||||||
Tax Fees(3) | 70 | 59 | ||||||
Total | 530 | 523 |
a. | Professional services rendered by our independent registered public accounting firm for the audit of our annual financial statements or services that are normally provided by the accountants in connection with statutory and regulatory filings or engagements. |
b. | Including professional services related to due diligence investigations. |
c. | Professional services rendered by our independent registered public accounting firm for international and local tax compliance, tax advice services and tax planning performed during the fiscal year. |
Number | Description |
Number | Description |
101.INS** | XBRL Instance Document |
101.SCH** | XBRL Taxonomy Extension Schema Document |
101.CAL** | XBRL Taxonomy Calculation Linkbase Document |
101.DEF** | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB** | XBRL Taxonomy Label Linkbase Document |
101.PRE** | XBRL Taxonomy Presentation Linkbase Document |
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
* | The original language version is on file with the Registrant and is available upon request. |
** | Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections. |
(1) | Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2012 and incorporated by reference herein. |
(2) | Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2018 and incorporated by reference herein. |
(3) | Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2011 and incorporated by reference herein. |
(4) | Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2019 and incorporated by reference herein. |
(5) | Included in the Registrant’s Form 6-K dated May 17, 2018 and incorporated by reference herein. |
(6) | Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2021 and incorporated by reference herein. |
(7) | Included in the Registrant’s Form 6-K dated October 14, 2005 and incorporated by reference herein. |
(8) | Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2010 and incorporated by reference herein. |
(9) | Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2013 and incorporated by reference herein. |
(10) | Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2014 and incorporated by reference herein. |
(11) | Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2017 and incorporated by reference herein. |
(12) | Included in the Registrant’s Form 6-K dated June 8, 2022 and incorporated by reference herein. |
(13) | Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2020 and incorporated by reference herein. |
(14) | Included in the Registrant’s Form 6-K dated July 1, 2021 and incorporated by reference herein. |
Ellomay Capital Ltd. | |||
By: | /s/ Ran Fridrich | ||
Ran Fridrich | |||
Chief Executive Officer and Director |
Ellomay Capital Ltd. and its Subsidiaries
Ellomay Capital Ltd. and its Subsidiaries Consolidated Financial Statements As at December 31, 2022 |
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 1057) | F-2 - F-4 |
F-5 | |
F-6 | |
F-7 - F-9 | |
F-10 - F-11 | |
F-12 - F-106 |
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, 2022, in conformity with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
F - 2
Basis for Opinions
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
F - 3
Critical Audit Matter
F - 4 |
December 31, | ||||||||||||||||
2022 | 2021 | 2022 | ||||||||||||||
Note | € in thousands | Convenience translation into US$in thousands (Note 3B) | ||||||||||||||
Assets | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | 4 | 46,458 | 41,229 | 49,547 | ||||||||||||
Marketable securities | 5 | 2,836 | 1,946 | 3,025 | ||||||||||||
Short term deposits | 5 | - | 28,410 | - | ||||||||||||
Restricted cash | 5 | 900 | 1,000 | 960 | ||||||||||||
Receivable from concession project | 6D3 | 1,799 | 1,784 | 1,919 | ||||||||||||
Trade and other receivables | 7 | 12,682 | 9,487 | 13,525 | ||||||||||||
64,675 | 83,856 | 68,976 | ||||||||||||||
Non-current assets | ||||||||||||||||
Investment in equity accounted investee | 6A | 30,029 | 34,029 | 32,026 | ||||||||||||
Advances on account of investments | 6C | 2,328 | 1,554 | 2,483 | ||||||||||||
Receivable from concession project | 6D3 | 24,795 | 26,909 | 26,444 | ||||||||||||
Fixed assets | 8 | 365,756 | *340,897 | 390,077 | ||||||||||||
Right-of-use asset | 14 | 30,020 | 23,367 | 32,016 | ||||||||||||
Intangible asset | 6D3 | 4,094 | 4,762 | 4,366 | ||||||||||||
Restricted cash and deposits | 5 | 20,192 | 15,630 | 21,535 | ||||||||||||
Deferred tax | 19 | 23,510 | 12,952 | 25,073 | ||||||||||||
Long term receivables | 7 | 9,270 | 5,388 | 9,886 | ||||||||||||
Derivatives | 21 | 1,488 | 2,635 | 1,587 | ||||||||||||
511,482 | 468,123 | 545,493 | ||||||||||||||
Total assets | 576,157 | 551,979 | 614,469 | |||||||||||||
Liabilities and Equity | ||||||||||||||||
Current liabilities | ||||||||||||||||
Current maturities of long term bank loans | 10 | 12,815 | 126,180 | 13,667 | ||||||||||||
Current maturities of long term loans | 10 | 10,000 | 16,401 | 10,665 | ||||||||||||
Current maturities of debentures | 12 | 18,714 | 19,806 | 19,958 | ||||||||||||
Trade payables | 4,504 | 2,904 | 4,803 | |||||||||||||
Other payables | 9 | 11,207 | 20,806 | 11,952 | ||||||||||||
Current maturities of derivatives | 21 | 33,183 | 14,783 | 35,390 | ||||||||||||
Current maturities of lease liabilities | 14 | 745 | 4,329 | 795 | ||||||||||||
91,168 | 205,209 | 97,230 | ||||||||||||||
Non-current liabilities | ||||||||||||||||
Long-term lease liabilities | 14 | 22,005 | 15,800 | 23,468 | ||||||||||||
Long-term loans | 11 | 229,466 | 39,093 | 244,725 | ||||||||||||
Other long-term bank loans | 11 | 21,582 | 37,221 | 23,017 | ||||||||||||
Debentures | 12 | 91,714 | 117,493 | 97,813 | ||||||||||||
Deferred tax | 19 | 6,770 | *9,044 | 7,220 | ||||||||||||
Other long-term liabilities | 13 | 2,021 | 3,905 | 2,155 | ||||||||||||
Derivatives | 21 | 28,354 | 10,107 | 30,239 | ||||||||||||
401,912 | 232,663 | 428,637 | ||||||||||||||
Total liabilities | 493,080 | 437,872 | 525,867 | |||||||||||||
Equity | ||||||||||||||||
Share capital | 16 | 25,613 | 25,605 | 27,316 | ||||||||||||
Share premium | 86,038 | 85,883 | 91,759 | |||||||||||||
Treasury shares | (1,736 | ) | (1,736 | ) | (1,851 | ) | ||||||||||
Transaction reserve with non-controlling Interests | 5,697 | 5,697 | 6,076 | |||||||||||||
Reserves | (12,632 | ) | 7,288 | (13,472 | ) | |||||||||||
Accumulated deficit | (7,256 | ) | *(6,899 | ) | (7,738 | ) | ||||||||||
Total equity attributed to shareholders of the Company | 95,724 | 115,838 | 102,090 | |||||||||||||
Non-Controlling Interest | (12,647 | ) | *(1,731 | ) | (13,488 | ) | ||||||||||
Total equity | 83,077 | 114,107 | 88,602 | |||||||||||||
Total liabilities and equity | 576,157 | 551,979 | 614,469 |
F - 5 |
For the year ended December 31, | ||||||||||||||||||||
2022 | 2021 | 2020 | 2022 | |||||||||||||||||
Note | € in thousands (except per share data) | Convenience translation into US$in thousands (Note 3B) | ||||||||||||||||||
Revenues | 18A | 53,360 | *45,721 | 9,645 | 56,908 | |||||||||||||||
Operating expenses | 18B | (24,089 | ) | *(17,590 | ) | (4,951 | ) | (25,691 | ) | |||||||||||
Depreciation and amortization expenses | 18B | (16,092 | ) | *(15,116 | ) | (2,975 | ) | (17,162 | ) | |||||||||||
Gross profit | 13,179 | 13,015 | 1,719 | 14,055 | ||||||||||||||||
Project development costs | 6C | (3,784 | ) | (2,508 | ) | (3,491 | ) | (4,036 | ) | |||||||||||
General and administrative expenses | 18C | (5,892 | ) | (5,661 | ) | (4,512 | ) | (6,284 | ) | |||||||||||
Share of profits of equity accounted investee | 6A | 1,206 | 117 | 1,525 | 1,286 | |||||||||||||||
Other income (expenses), net | - | - | 2,100 | - | ||||||||||||||||
Operating profit (loss) | 4,709 | 4,963 | (2,659 | ) | 5,021 | |||||||||||||||
Financing income | 18D | 9,565 | 2,931 | 2,134 | 10,201 | |||||||||||||||
Financing income (expenses) in connection with derivatives, net | 18D | 605 | (841 | ) | 1,094 | 645 | ||||||||||||||
Financing expenses | (12,636 | ) | (28,974 | ) | (6,862 | ) | (13,477 | ) | ||||||||||||
Financing expenses, net | (2,466 | ) | (26,884 | ) | (3,634 | ) | (2,631 | ) | ||||||||||||
Profit (loss) before taxes on income | 2,243 | (21,921 | ) | (6,293 | ) | 2,390 | ||||||||||||||
Tax benefit (taxes on income) | 19 | (2,103 | ) | *2,281 | 125 | (2,243 | ) | |||||||||||||
Profit (loss) for the year | 140 | (19,640 | ) | (6,168 | ) | 147 | ||||||||||||||
Profit (loss) attributable to: | ||||||||||||||||||||
Owners of the Company | (357 | ) | *(15,090 | ) | (4,627 | ) | (381 | ) | ||||||||||||
Non-controlling interests | 497 | *(4,550 | ) | (1,541 | ) | 528 | ||||||||||||||
Profit (loss) for the year | 140 | (19,640 | ) | (6,168 | ) | 147 | ||||||||||||||
Other comprehensive income (loss) items | ||||||||||||||||||||
that after initial recognition in comprehensive income (loss) were or will be transferred to profit or loss: | ||||||||||||||||||||
Foreign currency translation differences for foreign operations | (7,829 | ) | 12,284 | (482 | ) | (8,350 | ) | |||||||||||||
Effective portion of change in fair value of cash flow hedges, net of tax | (28,283 | ) | (13,429 | ) | 2,210 | (30,163 | ) | |||||||||||||
Net change in fair value of cash flow hedges transferred to profit or loss | 821 | (3,353 | ) | 555 | 876 | |||||||||||||||
Total other comprehensive income (loss), net of tax | (35,291 | ) | (4,498 | ) | 2,283 | (37,637 | ) | |||||||||||||
Total other comprehensive income (loss) attributable to: | ||||||||||||||||||||
Owners of the Company | (19,920 | ) | 3,124 | 881 | (21,244 | ) | ||||||||||||||
Non-controlling interests | (15,371 | ) | (7,622 | ) | 1,402 | (16,393 | ) | |||||||||||||
Total other comprehensive income (loss) | (35,291 | ) | (4,498 | ) | 2,283 | (37,637 | ) | |||||||||||||
Total comprehensive loss for the year | (35,151 | ) | (24,138 | ) | (3,885 | ) | (37,490 | ) | ||||||||||||
Total comprehensive income (loss) for the year attributable to: | ||||||||||||||||||||
Owners of the Company | (20,277 | ) | (11,966 | ) | (3,746 | ) | (21,625 | ) | ||||||||||||
Non-controlling interests | (14,874 | ) | (12,172 | ) | (139 | ) | (15,865 | ) | ||||||||||||
Total comprehensive income (loss) for the year | (35,151 | ) | (24,138 | ) | (3,885 | ) | (37,490 | ) | ||||||||||||
Earnings (loss) per share | ||||||||||||||||||||
Basic earnings (loss) per share | 20 | (0.03 | ) | (1.18 | ) | (0.38 | ) | (0.03 | ) | |||||||||||
Diluted earnings (loss) per share | 20 | (0.03 | ) | (1.18 | ) | (0.38 | ) | (0.03 | ) |
F - 6 |
Attributable to shareholders of the Company | Non- controlling interests | Total Equity | ||||||||||||||||||||||||||||||||||||||
Share capital | Share premium | Accumulated deficit | Treasury shares | Translation reserve from foreign operations | Hedging reserve | Transaction reserve with non-controlling interests | Total | |||||||||||||||||||||||||||||||||
€ in thousands | ||||||||||||||||||||||||||||||||||||||||
Balance as at January 1, 2022 | 25,605 | 85,883 | (6,899 | ) | (1,736 | ) | 15,365 | (8,077 | ) | 5,697 | 115,838 | (1,731 | ) | 114,107 | ||||||||||||||||||||||||||
Profit (loss) for the year | - | - | (357 | ) | - | - | - | - | (357 | ) | 497 | 140 | ||||||||||||||||||||||||||||
Other comprehensive loss for the year | - | - | - | - | (7,395 | ) | (12,525 | ) | - | (19,920 | ) | (15,371 | ) | (35,291 | ) | |||||||||||||||||||||||||
Total comprehensive loss for the year | - | - | (357 | ) | - | (7,395 | ) | (12,525 | ) | - | (20,277 | ) | (14,874 | ) | (35,151 | ) | ||||||||||||||||||||||||
Transactions with owners of the Company, recognized directly in equity: | ||||||||||||||||||||||||||||||||||||||||
Issuance of Capital note to non-controlling interest | - | - | - | - | - | - | - | - | 3,958 | 3,958 | ||||||||||||||||||||||||||||||
Options exercise | 8 | 28 | - | - | - | - | - | 36 | - | 36 | ||||||||||||||||||||||||||||||
Share-based payments | - | 127 | - | - | - | - | - | 127 | - | 127 | ||||||||||||||||||||||||||||||
Balance as at December 31, 2022 | 25,613 | 86,038 | (7,256 | ) | (1,736 | ) | 7,970 | (20,602 | ) | 5,697 | 95,724 | (12,647 | ) | 83,077 |
F - 7 |
Consolidated Statements of Changes in Equity (cont’d)
Attributable to shareholders of the Company | Non- controlling interests | Total Equity | ||||||||||||||||||||||||||||||||||||||
Share capital | Share premium | Retained earnings (accumulated deficit) | Treasury shares | Translation reserve from foreign operations | Hedging reserve | Transaction reserve with non- controlling interests | Total | |||||||||||||||||||||||||||||||||
€ in thousands | ||||||||||||||||||||||||||||||||||||||||
Balance as at January 1, 2021 | 25,102 | 82,401 | 8,191 | (1,736 | ) | 3,823 | 341 | 6,106 | 124,228 | 798 | 125,026 | |||||||||||||||||||||||||||||
Loss for the year | - | - | *(15,090 | ) | - | - | - | - | (15,090 | ) | (4,550 | ) | (19,640 | ) | ||||||||||||||||||||||||||
Other comprehensive profit (loss) for the year | - | - | - | - | 11,542 | (8,418 | ) | - | 3,124 | (7,622 | ) | (4,498 | ) | |||||||||||||||||||||||||||
Total comprehensive income (loss) for the year | - | - | (15,090 | ) | - | 11,542 | (8,418 | ) | - | (11,966 | ) | (12,172 | ) | (24,138 | ) | |||||||||||||||||||||||||
Transactions with owners of the Company, recognized directly in equity: | ||||||||||||||||||||||||||||||||||||||||
Issuance of ordinary shares | - | - | - | - | - | - | - | - | 8,682 | 8,682 | ||||||||||||||||||||||||||||||
Acquisition of shares in subsidiaries from non-controlling interests | - | - | - | - | - | - | (409 | ) | (409 | ) | 961 | 552 | ||||||||||||||||||||||||||||
Warrants exercise | 454 | 3,419 | - | - | - | - | - | 3,873 | - | 3,873 | ||||||||||||||||||||||||||||||
Options exercise | 49 | - | - | - | - | - | - | 49 | - | 49 | ||||||||||||||||||||||||||||||
Share-based payments | - | 63 | - | - | - | - | - | 63 | - | 63 | ||||||||||||||||||||||||||||||
Balance as at December 31, 2021 | 25,605 | 85,883 | (6,899 | ) | (1,736 | ) | 15,365 | (8,077 | ) | 5,697 | 115,838 | (1,731 | ) | 114,107 | ||||||||||||||||||||||||||
Balance as at January 1, 2020 | 21,998 | 64,160 | 12,818 | (1,736 | ) | 4,356 | (1073 | ) | 6106 | 106,629 | 937 | 107,566 | ||||||||||||||||||||||||||||
Loss for the year | - | - | (4,627 | ) | - | - | - | - | (4,627 | ) | (1,541 | ) | (6,168 | ) | ||||||||||||||||||||||||||
Other comprehensive profit (loss) for the year | - | - | - | - | (533 | ) | 1,414 | - | 881 | 1402 | 2,283 | |||||||||||||||||||||||||||||
Total comprehensive income (loss) for the year | - | - | (4,627 | ) | - | (533 | ) | 1,414 | - | (3,746 | ) | (139 | ) | (3,885 | ) | |||||||||||||||||||||||||
Transactions with owners of the Company, recognized directly in equity: | ||||||||||||||||||||||||||||||||||||||||
Issuance of Capital note to non-controlling interest | 3,084 | 18,191 | - | - | - | - | - | 21,275 | - | 21,275 | ||||||||||||||||||||||||||||||
Options exercise | 20 | - | - | - | - | - | - | 20 | - | 20 | ||||||||||||||||||||||||||||||
Share-based payments | - | 50 | - | - | - | - | - | 50 | - | 50 | ||||||||||||||||||||||||||||||
Balance as at December 31, 2020 | 25,102 | 82,401 | 8,191 | (1,736 | ) | 3,823 | 341 | 6,106 | 124,228 | 798 | 125,026 |
F - 8 |
Consolidated Statements of Changes in Equity (cont’d)
Attributable to shareholders of the Company | Non- controlling interests | Total Equity | ||||||||||||||||||||||||||||||||||||||
Share capital | Share premium | Accumulated deficit | Treasury shares | Translation reserve from Foreign operations | Hedging reserve | Transaction reserve with non-controlling interests | Total | |||||||||||||||||||||||||||||||||
US$ in thousands | ||||||||||||||||||||||||||||||||||||||||
Convenience translation into US$ (exchange rate as at December 31, 2022: euro 1 = US$ 1.066) | ||||||||||||||||||||||||||||||||||||||||
Balance as at January 1, 2022 | 27,307 | 91,594 | (7,357 | ) | (1,851 | ) | 16,386 | (8,614 | ) | 6,076 | 123,541 | (1,844 | ) | 121,697 | ||||||||||||||||||||||||||
Profit (loss) for the year | - | - | (381 | ) | - | - | - | - | (381 | ) | 528 | 147 | ||||||||||||||||||||||||||||
Other comprehensive loss for the year | - | - | - | - | (7,887 | ) | (13,357 | ) | - | (21,244 | ) | (16,393 | ) | (37,637 | ) | |||||||||||||||||||||||||
Total comprehensive loss for the year | - | - | (381 | ) | - | (7,887 | ) | (13,357 | ) | - | (21,625 | ) | (15,865 | ) | (37,490 | ) | ||||||||||||||||||||||||
Transactions with owners of the Company, recognized directly in equity: | ||||||||||||||||||||||||||||||||||||||||
Issuance of ordinary shares | - | - | - | - | - | - | - | - | 4,221 | 4,221 | ||||||||||||||||||||||||||||||
Options exercise | 9 | 30 | - | - | - | - | - | 39 | - | 39 | ||||||||||||||||||||||||||||||
Share-based payments | - | 135 | - | - | - | - | - | 135 | - | 135 | ||||||||||||||||||||||||||||||
Balance as at December 31, 2022 | 27,316 | 91,759 | (7,738 | ) | (1,851 | ) | 8,499 | (21,971 | ) | 6,076 | 102,090 | (13,488 | ) | 88,602 |
F - 9 |
For the year ended December 31 | ||||||||||||||||
2022 | 2021 | 2020 | 2022 | |||||||||||||
€ in thousands | Convenience translation into US$in thousands (Note 3B) | |||||||||||||||
Cash flows from operating activities | ||||||||||||||||
Profit (loss) for the year | 140 | *(19,640 | ) | (6,168 | ) | 147 | ||||||||||
Adjustments for: | ||||||||||||||||
Financing expenses, net | 2,466 | 26,884 | 3,634 | 2,631 | ||||||||||||
Profit from settlement of derivatives contract | - | (407 | ) | - | - | |||||||||||
Depreciation and amortization | 16,092 | *15,116 | 2,975 | 17,162 | ||||||||||||
Share-based payment transactions | 127 | 63 | 50 | 135 | ||||||||||||
Share of profits of equity accounted investees | (1,206 | ) | (117 | ) | (1,525 | ) | (1,286 | ) | ||||||||
Payment of interest on loan from an equity accounted investee | - | 859 | 582 | - | ||||||||||||
Change in trade receivables and other receivables | 724 | (1,883 | ) | (3,868 | ) | 772 | ||||||||||
Change in other assets | (209 | ) | (545 | ) | 179 | (223 | ) | |||||||||
Change in receivables from concessions project | (521 | ) | 1,580 | 1,426 | (556 | ) | ||||||||||
Change in trade payables | 1,697 | 154 | 190 | 1,810 | ||||||||||||
Change in other payables | 3,807 | 2,380 | (1,226 | ) | 4,060 | |||||||||||
Income tax expense (tax benefit) | 2,103 | *(2,281 | ) | (125 | ) | 2,243 | ||||||||||
Income taxes paid | (6,337 | ) | (94 | ) | (119 | ) | (6,758 | ) | ||||||||
Interest received | 1,896 | 1,844 | 2,075 | 2,022 | ||||||||||||
Interest paid | (9,459 | ) | (7,801 | ) | (3,906 | ) | (10,088 | ) | ||||||||
11,180 | 35,752 | 342 | 11,924 | |||||||||||||
Net cash provided by (used in) operating activities | 11,320 | 16,112 | (5,826 | ) | 12,071 |
F - 10 |
For the year ended December 31, | ||||||||||||||||
2022 | 2021 | 2020 | 2022 | |||||||||||||
€ in thousands | Convenience translation into US$in thousands (Note 3B) | |||||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Acquisition of fixed assets | (48,610 | ) | (80,885 | ) | (128,420 | ) | (51,842 | ) | ||||||||
Acquisition of subsidiary, net of cash acquired | - | - | (7,464 | ) | - | |||||||||||
Repayment of loan to an equity accounted investee | 149 | 1,400 | 1,978 | 159 | ||||||||||||
Loan to an equity accounted investee | (128 | ) | (335 | ) | (181 | ) | (137 | ) | ||||||||
Advances on account of investments | (774 | ) | - | (1,554 | ) | (825 | ) | |||||||||
Proceeds from marketable securities | - | - | 1,800 | - | ||||||||||||
Acquisition of marketable securities | (1,062 | ) | (112 | ) | (1,481 | ) | (1,133 | ) | ||||||||
Investment in settlement of derivatives, net | (528 | ) | (976 | ) | - | (563 | ) | |||||||||
Proceed from (investment in) restricted cash, net | (4,873 | ) | (5,990 | ) | 23,092 | (5,197 | ) | |||||||||
Proceeds from (investment in) short term deposit | 27,645 | (18,599 | ) | (1,323 | ) | 29,483 | ||||||||||
Compensation as per agreement with A.R.Z. Electricity Ltd. | - | - | 1,418 | - | ||||||||||||
Net cash used in investing activities | (28,181 | ) | (105,497 | ) | (112,135 | ) | (30,055 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||||||
Sale of shares in subsidiaries to non-controlling interests | - | 1,400 | - | - | ||||||||||||
Proceeds from options | 36 | 49 | 20 | 38 | ||||||||||||
Cost associated with long term loans | (9,988 | ) | (2,796 | ) | (734 | ) | (10,652 | ) | ||||||||
Payment of principal of lease liabilities | (5,703 | ) | (4,803 | ) | - | (6,082 | ) | |||||||||
Proceeds from long-term loans | 215,170 | 32,947 | 111,357 | 229,478 | ||||||||||||
Repayment of long-term loans | (153,751 | ) | (18,905 | ) | (3,959 | ) | (163,975 | ) | ||||||||
Repayment of Debentures | (19,764 | ) | (30,730 | ) | (26,923 | ) | (21,078 | ) | ||||||||
Repayment of SWAP instrument associated with long term loans | (3,290 | ) | - | - | (3,509 | ) | ||||||||||
Proceed from settlement of derivatives, net | 3,800 | - | - | 4,053 | ||||||||||||
Issue of ordinary shares | - | - | 21,275 | - | ||||||||||||
Proceeds from issue of convertible debentures | - | 15,571 | - | - | ||||||||||||
Proceeds from issuance of Debentures, net | - | 57,717 | 38,057 | - | ||||||||||||
Proceeds from issuance / exercise of warrants | - | 3,746 | 2,544 | - | ||||||||||||
Net cash provided by financing activities | 26,510 | 54,196 | 141,637 | 28,273 | ||||||||||||
Effect of exchange rate fluctuations on cash and | ||||||||||||||||
cash equivalents | (4,420 | ) | 9,573 | (1,340 | ) | (4,713 | ) | |||||||||
Increase (decrease) in cash and cash equivalents | 5,229 | (25,616 | ) | 22,336 | 5,576 | |||||||||||
Cash and cash equivalents at the beginning of year | 41,229 | 66,845 | 44,509 | 43,971 | ||||||||||||
Cash and cash equivalents at the end of the year | 46,458 | 41,229 | 66,845 | 49,547 |
F - 11 |
A. | Ellomay Capital Ltd. (hereinafter - the “Company”), is an Israeli Company operating in the business of renewable energy and a power generator and developer of renewable energy and power projects in Europe and Israel. As of December 31, 2022, the Company owns seven photovoltaic plants (each, a “PV Plant” and, together, the “PV Plants”) connected to their respective national grids and operating as follows: (i) five photovoltaic plants in Spain with an aggregate installed capacity of approximately 35.9 Mega Watt (“MW”), (ii) 51% of Talasol, which owns a photovoltaic plant with installed capacity of 300MW in the municipality of Talaván, Cáceres, Spain (hereinafter - the “Talasol PV Plant”) and (iii) one photovoltaic plant in Israel with an aggregate installed capacity of approximately 9 MW. In addition, the Company indirectly owns: (i) 9.375% of Dorad Energy Ltd. (hereinafter - “Dorad”), (ii) Ellomay Solar Italy One SRL and Ellomay Solar Italy Two SRL that are constructing photovoltaic plants with installed capacity of 14.8 MW and 4.95 MW, respectively, in the Lazio Region, Italy, (iii) Ellomay Solar Italy Four SRL, Ellomay Solar Italy Five SRL and Ellomay Solar Italy Ten SRL that are developing photovoltaic projects with installed capacity of 15.06 MW, 87.2 MW and 18 MW respectively, in the Lazio Region, Italy that have reached “ready to build” status, in the Lazio Region, Italy, (iv) Groen Gas Goor B.V., Groen Gas Oude-Tonge B.V. and Groen Gas Gelderland B.V., project companies operating anaerobic digestion plants in the Netherlands, with a green gas production capacity of approximately 3 million, 3.8 million and 9.5 million Normal Cubic Meter (“Nm3”) per year, respectively, and (v) 83.333% of Ellomay Pumped Storage (2014) Ltd., which is constructing a 156 MW pumped storage hydro power plant in the Manara Cliff, Israel (hereinafter - the “Manara PSP”). The Company also develops PV projects in Italy, Spain and Israel. |
B. | Definitions: |
F - 12 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 1 - General (cont’d)
C. | Effects of the military conflict between Russia and Ukraine: |
A. | Basis of preparation of the financial statements |
1. | The consolidated financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. |
2. | Consistent accounting policies |
3. | These consolidated financial statements are presented in euro, which is the Company’s functional currency, and have been rounded to the nearest thousand, except when otherwise indicated. The euro is the currency that represents the principal economic environment in which the Company operates. |
F - 13 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 2 - Basis of Preparation (cont’d)
A. | Basis of preparation of the financial statements (cont’d) |
4. | Basis of measurement - The consolidated financial statements have been prepared on the historical cost basis, except for the following: |
(i) | Investment in investee accounted for using the equity method; |
(ii) | Marketable securities; |
(iii) | Deferred tax assets and liabilities; |
(iv) | Financial instruments measured at fair value through other comprehensive income; |
(v) | Derivative financial instruments and other receivables measured at fair value through profit or loss; and |
(vi) | Provisions. |
B. | Significant accounting judgments, estimates and assumptions used in the preparation of the financial statements |
F - 14 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 2 - Basis of Preparation (cont’d)
B. | Significant accounting judgments, estimates and assumptions used in the preparation of the financial statements (cont’d) |
Business combination:
• | Note 15, on share-based payments; and |
• | Note 21, on financial instruments. |
• | Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. |
• | Level 2: inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly. |
• | Level 3: inputs that are not based on observable market data (unobservable inputs). |
C. | Adjustment in connection with the retrospective application |
F - 15 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 2 - Basis of Preparation (cont’d)
C. | Classification following the application for the first time (cont’d) |
December 31, 2021 | ||||||||||||
€ in thousands | ||||||||||||
As previously reported | Application effect IAS16- Amendment | As reported in these financial statements | ||||||||||
Fixed assets | 340,065 | 832 | 340,897 | |||||||||
Deferred tax | 8,836 | 208 | 9,044 | |||||||||
Accumulated deficit | (7,217 | ) | 318 | (6,899 | ) | |||||||
Non-controlling interest | (2,037 | ) | 306 | (1,731 | ) | |||||||
Revenues | 44,783 | 938 | 45,721 | |||||||||
Operating expenses | (17,524 | ) | (66 | ) | (17,590 | ) | ||||||
Depreciation and amortization expenses | (15,076 | ) | (40 | ) | (15,116 | ) | ||||||
Tax benefit (Taxes on income) | 2,489 | (208 | ) | 2,281 | ||||||||
Profit (loss) attributable to: | ||||||||||||
Owners of the Company | (15,408 | ) | 318 | (15,090 | ) | |||||||
Non-controlling interests | (4,856 | ) | 306 | (4,550 | ) | |||||||
Basic loss per share | (1.20 | ) | 0.02 | (1.18 | ) | |||||||
Diluted loss per share | (1.20 | ) | 0.02 | (1.18 | ) |
D. | Initial application of new standards, amendments to standards and interpretations |
1. | Amendment to IAS 37, Provisions, Contingent Liabilities and Contingent Assets - Costs of Fulfilling a Contract (“the Amendment”) |
- | Incremental costs; and |
- | An allocation of other costs that relate directly to fulfilling a contract (such as depreciation expenses for fixed assets used in fulfilling that contract and other contracts). |
F - 16 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 2 - Basis of Preparation (cont’d)
D. | Initial application of new standards, amendments to standards and interpretations (cont’d) |
2. | Amendment to IFRS 3, Business Combinations (“the Amendment”) |
A. | Basis of consolidation and equity method accounting |
1. | Subsidiaries |
2. | Transactions eliminated upon consolidation |
3. | Investment in associates and joint ventures (equity accounted investees) |
F - 17 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 3 - Significant Accounting Policies (cont’d)
A. | Basis of consolidation and equity method accounting (cont’d) |
4. | Business combinations |
F - 18 |
Notes to the Consolidated Financial Statements as at December 31, 2022
A. | Basis of consolidation and equity method accounting (cont’d) |
5. | Non-controlling interests |
B. | Functional and presentation currency |
Transactions in foreign currencies are translated to the respective functional currencies of the Company at exchange rates at the dates of the transactions.
F - 19 |
Notes to the Consolidated Financial Statements as at December 31, 2022
B. | Functional and presentation currency (cont’d) |
- | A financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; |
- | Qualifying cash flow hedges to the extent the hedge is effective. |
F - 20 |
Notes to the Consolidated Financial Statements as at December 31, 2022
B. | Functional and presentation currency (cont’d) |
C. | Financial instruments |
(1) | Non-derivative financial assets |
- | It is held within a business model whose objective is to hold assets so as to collect contractual cash flows; and |
F - 21 |
Notes to the Consolidated Financial Statements as at December 31, 2022
C. | Financial instruments (cont’d) |
(1) | Non-derivative financial assets (cont’d) |
- | The contractual terms of the financial asset give rise to cash flows representing solely payments of principal and interest on the principal amount outstanding on specified dates. |
- | It is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and |
- | The contractual terms of the debt instrument give rise to cash flows representing solely payments of principal and interest on the principal amount outstanding on specified dates. |
- | Contingent events that would change the timing or amount of the cash flows; |
- | Terms that may change the stated interest rate, including variable interest; |
- | Extension or prepayment features; and |
- | Terms that limit the Company’s claim to cash flows from specified assets (for example a non-recourse financial asset). |
F - 22 |
Notes to the Consolidated Financial Statements as at December 31, 2022
C. | Financial instruments (cont’d) |
(1) | Non-derivative financial assets (cont’d) |
(2) | Non-derivative financial liabilities |
F - 23 |
Notes to the Consolidated Financial Statements as at December 31, 2022
C. | Financial instruments (cont’d) |
(2) | Non-derivative financial liabilities (cont’d) |
F - 24 |
Notes to the Consolidated Financial Statements as at December 31, 2022
C. | Financial instruments (cont’d) |
(3) | Derivative financial instruments, including hedge accounting |
F - 25 |
Notes to the Consolidated Financial Statements as at December 31, 2022
C. | Financial instruments (cont’d) |
(3) | Derivative financial instruments, including hedge accounting (cont’d) |
(4) | Interest Rate Benchmark Reform |
(5) | CPI-linked assets and liabilities that are not measured at fair value |
(6) | Share capital |
F - 26 |
Notes to the Consolidated Financial Statements as at December 31, 2022
C. | Financial instruments (cont’d) |
(6) | Share capital (cont’d) |
D. | Fixed assets |
1. | Recognition and measurement |
2. | Depreciation |
% per annum | Mainly % per annum | |||||||
Office furniture and equipment | 6-33 | 33 | ||||||
Photovoltaic plants in Spain | 4-5 | 4-5 | ||||||
Photovoltaic plants in Italy | 5 | 5 | ||||||
Anaerobic digestion plants in the Netherlands | 8 | 8 | ||||||
Leasehold improvements | Over the shorter of the lease period or the life of the asset | 7 |
F - 27 |
Notes to the Consolidated Financial Statements as at December 31, 2022
D. | Fixed assets (cont’d) |
2. | Depreciation (cont’d) |
E. | Capitalization of borrowing costs |
F. | Impairment |
F - 28 |
Notes to the Consolidated Financial Statements as at December 31, 2022
F. | Impairment (cont’d) |
G. | Share-based payment transactions |
H. | Employee benefits |
1. | Short-term employee benefits: Short-term employee benefits include salaries, paid annual leave, paid sick leave, recreation and social security contributions. Short-term employee benefits are measured on an undiscounted basis and are expensed as the related services are rendered or upon the actual absence of the employee when the benefit is not accumulated (such as maternity leave). A liability in respect of a cash bonus is recognized when the Company has a legal or constructive obligation to make such payment as a result of past service rendered by an employee and the obligation can be estimated reliably. |
F - 29 |
Notes to the Consolidated Financial Statements as at December 31, 2022
H. | Employee benefits (cont’d) |
2. | Post-employment benefits: The post-employment plans are usually financed by deposits with insurance companies and classified as a defined contribution plan or as a defined benefit plan. |
I. | Provisions |
J. | Leases |
(a) | The right to obtain substantially all the economic benefits from use of the identified asset; |
(b) | The right to direct the identified asset’s use. |
F - 30 |
Notes to the Consolidated Financial Statements as at December 31, 2022
J. | Leases (cont’d) |
• | Lands | 20-40 years |
• | Machinery equipment | 1-4 years |
F - 31 |
Notes to the Consolidated Financial Statements as at December 31, 2022
K. | Revenue recognition |
(a) | The parties to the contract have approved the contract (in writing, orally or according to other customary business practices) and they are committed to satisfying the obligations attributable to them; |
(b) | The Company can identify the rights of each party in relation to the services that will be transferred; |
(c) | The Company can identify the payment terms for the services that will be transferred; |
(d) | The contract has a commercial substance (i.e., the risk, timing and amount of the entity’s future cash flows are expected to change as a result of the contract); |
(e) | It is probable that the consideration, to which the Company is entitled to in exchange for the services transferred to the customer, will be collected. |
F - 32 |
Notes to the Consolidated Financial Statements as at December 31, 2022
K. | Revenue recognition (cont’d) |
F - 33 |
Notes to the Consolidated Financial Statements as at December 31, 2022
L. | Income tax |
- | The initial recognition of goodwill, |
- | The initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss, and |
- | Differences relating to investments in subsidiaries, joint arrangements and associates, to the extent that the Company is able to control the timing of the reversal of the temporary difference and it is probable that they will not reverse in the foreseeable future, either by way of selling the investment or by way of distributing dividends in respect of the investment. |
F - 34 |
Notes to the Consolidated Financial Statements as at December 31, 2022
M. | Earnings (loss) per share |
N. | Financing income and expenses |
O. | Service concession arrangements |
F - 35 |
Notes to the Consolidated Financial Statements as at December 31, 2022
P. | New standards, amendments to standards and interpretations not yet adopted |
(1) | Amendment to IAS 1, Presentation of Financial Statements: Classification of Liabilities as Current or Non-Current and subsequent amendment: Non-Current Liabilities with Covenants (“the Amendment”) |
(2) | Amendment to IAS 1, Presentation of Financial Statements: Disclosure of Accounting Policies. (“the Amendment”) |
(3) | Amendment to IAS 12, Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction (“the Amendment”) |
P. | New standards, amendments to standards and interpretations not yet adopted (cont'd) |
(3) | Amendment to IAS 12, Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction (“the Amendment”) (cont’d) |
F - 36 |
Notes to the Consolidated Financial Statements as at December 31, 2022
December 31 | ||||||||
2022 | 2021 | |||||||
€ in thousands | ||||||||
Cash | 14,768 | 31,771 | ||||||
On call deposits | 31,690 | 9,458 | ||||||
Cash and cash equivalents | 46,458 | 41,229 | ||||||
Cash and cash equivalents in the statement of cash flows | 46,458 | 41,229 |
December 31 | ||||||||
2022 | 2021 | |||||||
€ in thousands | ||||||||
Marketable securities (1) | 2,836 | 1,946 | ||||||
Short-term deposits | - | 28,410 | ||||||
Short-term restricted cash | 900 | 1,000 | ||||||
Restricted cash and bank deposits, long-term (2) | 20,192 | 15,630 |
(1) | The Company invested in a traded corporate bond with a coupon rate of 3.255% and in a traded US treasury bill with a coupon rate of 1.375%. |
(2) | Deposits used to secure obligations towards the Israeli Electricity Authority for the license for the pumped-storage project in the Manara Cliff in Israel and to secure obligations under loan agreements (see Note 11). |
F - 37 |
Notes to the Consolidated Financial Statements as at December 31, 2022
A. | Equity accounted investees |
F - 38 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 6 - Investee Companies and other investments (cont'd)
A. | Equity accounted investees (cont'd) | |
U. Dori Energy Infrastructures Ltd. (“Dori Energy”) (cont’d)– |
F - 39 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 6 - Investee Companies and other investments (cont'd)
A. | Equity accounted investees (cont'd) | |
U. Dori Energy Infrastructures Ltd. (“Dori Energy”) (cont’d)– |
F - 40 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 6 - Investee Companies and other investments (cont'd)
A. | Equity accounted investees (cont'd) | ||
U. Dori Energy Infrastructures Ltd. (“Dori Energy”) (cont’d)– |
Petition to Approve a Derivative Claim filed by Dori Energy (cont’d)
F - 41 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 6 - Investee Companies and other investments (cont'd)
A. | Equity accounted investees (cont'd) | ||
U. Dori Energy Infrastructures Ltd. (“Dori Energy”) (cont’d)– |
Petition to Approve a Derivative Claim filed by Dori Energy (cont’d)
F - 42 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 6 - Investee Companies and other investments (cont'd)
A. | Equity accounted investees (cont'd) | |
U. Dori Energy Infrastructures Ltd. (“Dori Energy”) (cont’d)– | ||
Opening Motion filed by Zorlu (cont’d) |
F - 43 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 6 - Investee Companies and other investments (cont'd)
A. | Equity accounted investees (cont'd) | |
U. Dori Energy Infrastructures Ltd. (“Dori Energy”) (cont’d)– |
Composition of the investments
December 31 | ||||||||
2022 | 2021 | |||||||
€ in thousands | ||||||||
Investment in shares | 30,756 | 26,371 | ||||||
Long-term loans | 2,665 | 8,495 | ||||||
Deferred interest | (727 | ) | (837 | ) | ||||
32,694 | 34,029 | |||||||
Current maturities | (2,665 | ) | - | |||||
Investment in equity accounted investee | 30,029 | 34,029 |
2022 | 2021 | |||||||
€ in thousands | ||||||||
Changes in equity and loans: | ||||||||
Balance as at January 1 | 34,029 | 32,234 | ||||||
Long term loans extended | 128 | 335 | ||||||
Repayment of long term loans | (149 | ) | (2,259 | ) | ||||
Reevaluation in connection with long term loans | (270 | ) | (22 | ) | ||||
The Company’s share of income | 1,206 | 117 | ||||||
Foreign currency translation adjustments | (2,250 | ) | 3,624 | |||||
Conversion to short term loan | (2,665 | ) | - | |||||
Balance as at December 31 | 30,029 | 34,029 |
F - 44 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 6 - Investee Companies and other investments (cont'd)
A. | Equity accounted investees (cont'd) |
(a) | Summary information on financial position |
Equity | ||||||||||||||||||||||||||||||||||||||||||||||||
Rate of | Current | Non-current | Total | Current | Non-current | Total | attributable to the owners of the | Company’s | Surplus costs and | Other | Carrying amount of | |||||||||||||||||||||||||||||||||||||
ownership | assets | assets | assets | liabilities | liabilities | liabilities | Company | share | goodwill | adjustments | investment | |||||||||||||||||||||||||||||||||||||
% | € in thousands | |||||||||||||||||||||||||||||||||||||||||||||||
2022 | ||||||||||||||||||||||||||||||||||||||||||||||||
Dori Energy | 50 | 72 | 63,722 | 63,794 | (5,329 | ) | - | (5,329 | ) | 58,464 | 29,232 | 1,927 | (404 | ) | 30,756 | |||||||||||||||||||||||||||||||||
2021 | ||||||||||||||||||||||||||||||||||||||||||||||||
Dori Energy | 50 | 239 | 64,181 | 64,420 | (125 | ) | (15,871 | ) | (15,996 | ) | 48,424 | 24,212 | 2,569 | (410 | ) | 26,371 |
(b) | Summary information on operating results |
Rate of ownership as of December | Income for the year | Company’s share | Elimination of interest on loan from related party | Other adjustments | Company’s share of income of investee | |||||||||||||||||||
% | € in thousands | |||||||||||||||||||||||
2022 | ||||||||||||||||||||||||
Dori Energy | 50 | (61 | ) | (31 | ) | 1,475 | (238 | ) | 1,206 | |||||||||||||||
2021 | ||||||||||||||||||||||||
Dori Energy | 50 | (602 | ) | (301 | ) | 878 | (459 | ) | 118 |
F - 45 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 6 - Investee Companies and other investments (cont'd)
B. | Pumped Storage Projects |
F - 46 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 6 - Investee Companies and other investments (cont’d)
B. | Pumped Storage Projects (cont’d) |
F - 47 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 6 - Investee Companies and other investments (cont’d)
B. | Pumped Storage Projects (cont’d) |
Manara PSP Project Finance (cont’d)
F - 48 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 6 - Investee Companies and other investments (cont’d)
B. | Pumped Storage Projects (cont’d) |
C. | Development of PV Projects in Italy |
F - 49 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 6 - Investee Companies and other investments (cont’d)
C. | Development of PV Projects in Italy (cont’d) |
December 31 | ||||||||
2022 | 2021 | |||||||
€ in thousands | ||||||||
On account of development of PV projects in Italy | 2,328 | 1,554 |
F - 50 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 6 - Investee Companies and other investments (cont’d)
D. | Subsidiaries - |
1. | Biogas Plants in the Netherlands |
F - 51 |
Notes to the Consolidated Financial Statements as at December 31, 2022
D. | Subsidiaries - (cont’d) |
2. | PV Projects in Spain |
F - 52 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 6 - Investee Companies and other investments (cont’d)
D. | Subsidiaries - (cont’d) |
2. | PV Projects in Spain (cont’d) |
As the Company directs the operations of Talasol and the rights granted to the Talasol Partners are minority protective rights, these changes in the Company’s ownership interest in Talasol did not result in loss of control and were accounted for as equity transactions. The Company therefore recognized in equity an amount of approximately €6.1 million, less associated expenses in the amount of approximately €0.7 million on the date of the Talasol SPA.
F - 53 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 6 - Investee Companies and other investments (cont’d)
D. | Subsidiaries - (cont’d) |
3. | PV Projects in Spain (cont’d) |
3. | Israeli Service Concession project |
Asset from concession project | ||||
€ in thousands | ||||
Balance as at December 31, 2022 | 26,594 | |||
Less current maturities | 1,799 | |||
Non current asset from concession project | 24,795 |
F - 54 |
Notes to the Consolidated Financial Statements as at December 31, 2022
December 31 | ||||||||
2022 | 2021 | |||||||
€ in thousands | ||||||||
Current Assets - Trade and Other receivables: | ||||||||
Government authorities | 3,752 | 1,602 | ||||||
Income receivable | 1,062 | 3,794 | ||||||
Interest receivable | 125 | 3 | ||||||
Advance tax payment | 566 | 76 | ||||||
Trade receivable | 420 | 598 | ||||||
Inventory | 1,201 | 640 | ||||||
Intangible asset from green certificates | 585 | - | ||||||
Derivatives (see Note 21) | 273 | 639 | ||||||
Prepaid expenses and other | 2,033 | 2,135 | ||||||
Current Maturities of loans given to an equity accounted investee | 2,665 | - | ||||||
12,682 | 9,487 | |||||||
Non-current Assets - Long term receivables: | ||||||||
Prepaid expenses associated with long term loans | 8,417 | 4,787 | ||||||
Annual rent deposits | 290 | 33 | ||||||
Loans to others | 546 | 568 | ||||||
Other | 17 | - | ||||||
9,270 | 5,388 |
F - 55 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Office | ||||||||||||||||||||
Photovoltaic | Pumped | Biogas | furniture and | |||||||||||||||||
plants | storage | plants | equipment | Total | ||||||||||||||||
€ in thousands | ||||||||||||||||||||
Cost | ||||||||||||||||||||
Balance as at January 1, 2022 | 251,027 | 78,892 | 35,192 | 190 | 365,301 | |||||||||||||||
Additions | 15,036 | 29,124 | 1,163 | 33 | 45,356 | |||||||||||||||
Effect of changes in exchange rates | (1 | ) | (5,544 | ) | - | 1 | (5,544 | ) | ||||||||||||
Balance as at December 31, 2022 | 266,062 | 102,472 | 36,355 | 224 | 405,113 | |||||||||||||||
Balance as at January 1, 2021 | 223,626 | 16,607 | 34,107 | 180 | 274,520 | |||||||||||||||
Additions | 27,401 | (*)59,488 | 1,085 | 8 | 87,982 | |||||||||||||||
Effect of changes in exchange rates | - | (*)2,797 | - | 2 | 2,799 | |||||||||||||||
Balance as at December 31, 2021 | 251,027 | 78,892 | 35,192 | 190 | 365,301 | |||||||||||||||
Depreciation | ||||||||||||||||||||
Balance as at January 1, 2022 | 17,297 | - | 6,952 | 155 | 24,404 | |||||||||||||||
Depreciation for the year | 12,233 | - | 2,700 | 21 | 14,954 | |||||||||||||||
Effect of changes in exchange rates | - | - | - | (1 | ) | (1 | ) | |||||||||||||
Balance as at December 31, 2022 | 29,530 | - | 9,652 | 175 | 39,357 | |||||||||||||||
Balance as at January 1, 2021 | 6,286 | - | 4,002 | 137 | 10,425 | |||||||||||||||
Depreciation for the year | 11,011 | - | 2,950 | 16 | 13,977 | |||||||||||||||
Effect of changes in exchange rates | - | - | - | 2 | 2 | |||||||||||||||
Balance as at December 31, 2021 | 17,297 | - | 6,952 | 155 | 24,404 | |||||||||||||||
Carrying amounts | ||||||||||||||||||||
As at January 1, 2021 | 217,340 | 16,607 | 30,105 | 43 | 264,095 | |||||||||||||||
As at December 31, 2021 | 233,730 | 78,892 | 28,240 | 35 | 340,897 | |||||||||||||||
As at December 31, 2022 | 236,532 | 102,472 | 26,703 | 49 | 365,756 |
F - 56 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 8 - Fixed assets (cont’d)
PV Plant Title | Original nominal capacity | Connection to grid/Other status | Cost included in the book value as at December 31, 2022 | |||
€ in thousands | ||||||
“Ellomay Spain – Rinconada II” | 2.275 MWP | June 2010 | 5,509 | |||
“Rodríguez I” | 1.675 MWP | November 2011 | 3,662 | |||
“Rodríguez II” | 2.691 MWP | November 2011 | 6,631 | |||
“Fuente Librilla” | 1.248 MWP | June 2011 | 3,212 | |||
“Talasol” | 300 MWP | January 2021 | 219,934 | |||
“Ellomay Solar” | 28 MWP | July 2022 | 18,074 | |||
“Solar Italy One” | 14.8 MWP | Under construction | 3,215 | |||
“Solar Italy Two” | 4.95 MWP | Under construction | 1,012 | |||
“Solar Italy Four” | 15.6 MWP | Ready to Build status | 304 | |||
“Solar Italy Five” | 87.2 MWP | Ready to Build status | 3,811 | |||
“Solar Italy Ten” | 18 MWP | Ready to Build status | 698 |
In addition, the Company indirectly owns five PV Plants projects in Italy that are in Ready to Build status or constructing. As it is probable that the Company will enjoy future economic benefits in connection with: (i) the Ellomay Solar Italy One SRL and Ellomay Solar Italy Two SRL projects since May 2022, (ii) the Ellomay Solar Italy Four SRL and Ellomay Solar Italy Five SRL projects since July 2022 and (iii) the Ellomay Solar Italy Ten SRL project since December 2022, expenses in connection with these projects are capitalized as assets (see Note 6C) commencing these dates.
F - 57 |
Notes to the Consolidated Financial Statements as at December 31, 2022
December 31 | ||||||||
2022 | 2021 | |||||||
€ in thousands | ||||||||
Employees and payroll accruals | 358 | 336 | ||||||
Government authorities | 1,426 | 1,337 | ||||||
Forward contracts closed | - | 527 | ||||||
Deferred revenues | 1,794 | 2,753 | ||||||
Accrued expenses connected to Manara PSP | 6,392 | 9,782 | ||||||
Other accrued expenses | 853 | 5,142 | ||||||
Taxes on income | 384 | 929 | ||||||
11,207 | 20,806 |
Interest rate | ||||||||||||||||
Linkage terms | 2021 and 2022 | December 31 2022 | December 31 2021 | |||||||||||||
% | € in thousands | |||||||||||||||
Current maturities of long term bank loans (refer to Note 11) | EURIBOR | 2 - 4.5 | 3,261 | 124,156 | ||||||||||||
- | 2.58 – 3.03 | 7,463 | - | |||||||||||||
Consumer price index in Israel | 4.65 | 2,091 | 2,024 | |||||||||||||
12,815 | 126,180 |
Interest rate | ||||||||||||||||
Linkage terms | 2021 and 2022 | December 31 2022 | December 31 2021 | |||||||||||||
% | € in thousands | |||||||||||||||
Current maturities of other long term loans | EURIBOR | 5.27 | 10,000 | 16,401 | ||||||||||||
10,000 | 16,401 |
F - 58 |
Notes to the Consolidated Financial Statements as at December 31, 2022
A. | Loans details |
Interest rate | ||||||||||||||||
Linkage terms | 2021 and 2022 | December 31 2022 | December 31 2021 | |||||||||||||
% | € in thousands | |||||||||||||||
Bank loans | EURIBOR | 2-4.5 | 23,918 | 147,446 | ||||||||||||
- | 2.58 – 3.03 | 164,212 | - | |||||||||||||
Bank of Israel interest rate | 4.35-6.35 | 2,986 | - | |||||||||||||
Consumer price index in Israel | 2.75-4.65 | 51,165 | 17,827 | |||||||||||||
242,281 | 165,273 | |||||||||||||||
Current maturities | 12,815 | 126,180 | ||||||||||||||
Long-term loans | 229,466 | 39,093 |
Interest rate | ||||||||||||||||
Linkage terms | 2021 and 2022 | December 31 2022 | December 31 2021 | |||||||||||||
% | € in thousands | |||||||||||||||
Other long term loans | EURIBOR | 5.27 | 23,247 | 45,949 | ||||||||||||
Consumer price index in Israel | 3-7 | 8,335 | 7,673 | |||||||||||||
31,582 | 53,622 | |||||||||||||||
Current maturities | 10,000 | 16,401 | ||||||||||||||
Other long-term loans | 21,582 | 37,221 |
1. | The Company’s 83.333% owned Israeli subsidiary promoting the Manara PSP, Ellomay PS, entered into a loan agreement with the owner of the remaining 16.667% of its outstanding shares (“Ampa”). The unpaid balance (principal and interest) of the loan is split into 2 separate loans, an interest-bearing loan at an annual rate of 7% linked to the consumer price index (senior international debt), and a mezzanine loan (an internationally inferior debt) bearing an annual interest rate of 5%. The maturity date of this loan starts from December 31, 2027. As of December 31, 2022, the amount of the loan is €7,538 thousand. |
F - 59 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 11 - Loans (cont’d)
A. | Loans details (cont’d) |
2. | On February 11, 2021, the Manara PSP Project Finance achieved financial closing. The Manara PSP Project Finance facilities are provided by a consortium of Israeli banks and institutional investors, arranged, and led by Mizrahi-Tefahot Bank Ltd. The Manara PSP Project Finance long term facilities were in the aggregate amount of approximately NIS 1.27 billion (approximately €338 million). This aggregate amount represents the real (non-indexed) value of the Long Term Facilities as of the date of Financial Closing. Such amount, as well as the standby facilities, is linked to a synthetic composite index comprising a weighted average of the indices and currencies applicable to the Manara PSP’s construction costs (the “Project Index”), on a yearly basis during the first 4 years of construction, and thereafter semi-annually until construction end. According to the linkage mechanism set out in the loan agreements, the amount of the Long Term Facilities is linked to the Project Index. |
F - 60 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 11 - Loans (cont’d)
A. | Loans details (cont’d) |
F - 61 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 11 - Loans (cont’d)
A. | Loans details (cont’d) |
F - 62 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 11 - Loans (cont’d)
A. | Loans details (cont’d) |
1. | Groen Goor and Ellomay Luxembourg entered into a senior project finance agreement in 2017 (the “Goor Loan Agreement”), with Coöperatieve Rabobank U.A. (“Rabobank”), that includes the following tranches: (i) two loans with principal amounts of €3,510 thousand (with a fixed interest rate of 3% until the end of 2021 and with a fixed interest rate of 3.45% for the next five years) and €2,090 thousand, (with a fixed interest rate of 2.5% until the end of March 2022 and with a fixed interest rate of 2.65% until the end of March 2023), for a period of 12.25 years, repayable in equal monthly installments commencing three months following the connection of the Goor Project’s facility to the grid and (ii) an on-call credit facility of €370 thousand with variable interest. The amount of €5,600 thousand was withdrawn in 2017 on account of these loans. In connection with the Goor Loan Agreement, the following securities were provided to Rabobank: (i) pledge on the present and future rights arising from the feedstock purchase agreement, the EPC agreement, the O&M agreement, the SDE subsidy, the various power and green gas purchase agreements, and the green gas certification supply agreement, (ii) pledge on all present and future (a) receivables arising from business and trade, and (b) stock and inventory including machinery and transport vehicles of Groen Goor and IPP, and (iii) all rights/claims of Groen Goor and IPP against third parties existing at the time of the execution of the Loan Agreement, including rights from insurance agreements. |
2. | Groen Gas Oude-Tonge and Ellomay Luxembourg entered into a senior project finance agreement (the “Oude Tonge Loan Agreement”), with Rabobank, that includes the following tranches: (i) three loans with principal amounts of €3,150 thousand (with a fixed interest rate of 3.1% the end of June 2022 and with a fixed interest rate of 3.95% for the next three years), €1,540 thousand (with a fixed interest rate of 2.9% until the end of March 2023) and €160 thousand, (with a fixed interest rate of 3.4% until the end of March 2023), for a period of 12.25 years, repayable in equal monthly installments commencing three months following the connection of the Oude Tonge Project’s facility to the grid and (ii) an on-call credit facility of €100 thousand with variable interest. The amount of €4,850 thousand was withdrawn in 2017 and 2018 on account of these loans. |
F - 63 |
Notes to the Consolidated Financial Statements as at December 31, 2022
A. | Loans details (cont’d) |
3. | GG Gelderland entered into a senior project finance agreement (the “Gelderland Loan Agreement”), with Rabobank, that includes the following tranches: (i) four loans with principal amounts of (a) €2,453 thousand (with a fixed interest rate of 3.6% for the first five years), (b) €1,200 thousand (with a fixed interest rate of 4.5% until the beginning of December 2020 and with a fixed interest rate of 3.5% until the beginning of December 2025), (c) €400 thousand (with a fixed interest rate of 3.55% until the end of January 2023 and with a fixed interest rate of 5.95% until the end of the loan period) and (d) €2,847 thousand (with a fixed interest rate of 4.5% until the beginning of December 2020 and with a fixed interest rate of 3.5% until the beginning of December 2025), all for a period of 12 years (144 monthly payments), repayable in equal monthly installments and (ii) an on-call credit facility of €750 thousand with variable interest. An aggregate amount of €6,900 thousand was withdrawn in 2015, 2016 and 2018 on account of these loans. On November 30, 2020, GG Gelderland replaced the loan set forth in (i)(a) above, which as of that date had an outstanding principal amount of €1,890 thousand, with another loan from Rabobank with a fixed interest rate of 3.1% per year, repayable in 56 payments monthly, with a repayment of principal in one payments on August 2025. |
4. | GG Gelderland, entered into a loan agreement in the end of November 2020, with Ontwikkelingsnaatscgappij Oost-Nederland N.V. (“Oost”), as a benefit created in connection with the Covid-19 pandemic. The loan is with a principal amount of €750 thousand with a fixed interest rate of 3 % per year for 3 years. The interest and the principle will be fully repaid in one single amount after 3 years. According to the agreement with Oost, the loan term may be prolonged up to 5 years. |
F - 64 |
Notes to the Consolidated Financial Statements as at December 31, 2022
A. | Loans details (cont’d) |
1. | On March 12, 2019, four of the Company’s Spanish subsidiaries (together, hereinafter – the “Subsidiaries”) entered into a €18.4 million project finance Facility Agreement (the “Facility Agreement”). The €18.4 million principal amount is divided into: (i) four term loan facilities, one for each Subsidiary, in the aggregate amount of €17.6 million with terms ending in December 2037, and (ii) a revolving credit facility to attend the debt service if needed, for a maximum amount of euro 0.8 million granted to any of the Subsidiaries. |
F - 65 |
Notes to the Consolidated Financial Statements as at December 31, 2022
A. | Loans details (cont’d) |
1. | On April 30, 2019, the Talasol PV Plant reached financial closing in the aggregate amount of approximately €158.5 million (the “Talasol Previous Financing”). The Talasol Previous Financing consisted of several facilities including two term facilities and two revolving debt service facilities, with terms ending on September 30, 2033, with interest rates based on Euribor plus varying margins. |
(a) | a term loan in the amount of €155 million of which the final maturity date is June 30, 2044, and |
(b) | a term loan in the amount of €20 million of which the final maturity date is December 31, 2042. |
F - 66 |
Notes to the Consolidated Financial Statements as at December 31, 2022
A. | Loans details (cont’d) |
2. | On April 30, 2019, following the closing of Talasol PV Plant and sale of 49% holdings of the Talasol Project, Talasol entered into a loan agreement with GSE 3 UK Limited and Fond-ICO Infraestructuras II, FICC (the minority shareholders of Talasol, each of whom owns 24.5% of Talasol). The unpaid balance (principal and interest) of the loan will bear interest of Euribor 6 mount plus 5.27%. The maturity date of this loan is December 31, 2037. As of December 31, 2022, the amount of the loan is €23,247 thousand. |
B. | The aggregate annual maturities are as follows: |
December 31 | December 31 | |||||||
2022 | 2021 | |||||||
€ in thousands | ||||||||
Second year | 13,811 | 7,402 | ||||||
Third year | 15,952 | 7,849 | ||||||
Fourth year | 14,759 | 7,623 | ||||||
Fifth year | 16,026 | 6,524 | ||||||
Sixth year and thereafter | 190,500 | 46,916 | ||||||
Long-term loans | 251,048 | 76,314 | ||||||
Current maturities | 22,815 | 142,581 | ||||||
273,863 | 218,895 |
C. | In order to minimize the interest-rate risk resulting from liabilities to banks and financing institutions linked to the Euribor, the Company executed swap transactions. For more information, see Note 21. |
F - 67 |
Notes to the Consolidated Financial Statements as at December 31, 2022
D. | Movement in liabilities deriving from financing activities |
Liabilities | ||||||||||||||||
Loans and | ||||||||||||||||
Note | borrowings | Debentures | Total | |||||||||||||
€ in thousands | ||||||||||||||||
Balance as at January 1, 2022 | 218,895 | 137,299 | 356,194 | |||||||||||||
Changes from financing activities | ||||||||||||||||
Repayment of debentures | 12 | - | (19,764 | ) | (19,764 | ) | ||||||||||
Receipt of loans | 11 | 215,170 | - | 215,170 | ||||||||||||
Repayment of loans | 11 | (153,751 | ) | - | (153,751 | ) | ||||||||||
Accrued interest | 11 | 2,488 | - | 2,488 | ||||||||||||
Linkage | 11 | 2,029 | - | 2,029 | ||||||||||||
Transaction costs related to borrowings | (3,861 | ) | 779 | (3,082 | ) | |||||||||||
Issuance of capital note to non-controlling interest | (3,958 | ) | - | (3,958 | ) | |||||||||||
Total net financing liabilities | 277,012 | 118,314 | 395,326 | |||||||||||||
Effect of changes in foreign exchange rates | (3,149 | ) | (7,886 | ) | (11,035 | ) | ||||||||||
Balance as at December 31, 2022 | 273,863 | 110,428 | 384,291 |
Liabilities | ||||||||||||||||
Loans and | ||||||||||||||||
Note | borrowings | Debentures | Total | |||||||||||||
€ in thousands | ||||||||||||||||
Balance as at January 1, 2021 | 198,169 | 82,724 | 280,893 | |||||||||||||
Changes from financing activities | ||||||||||||||||
Proceeds from issue of debentures | 12 | - | 71,398 | 71,398 | ||||||||||||
Repayment of Debentures | 12 | - | (30,730 | ) | (30,730 | ) | ||||||||||
Receipt of loans | 11 | 32,947 | - | 32,947 | ||||||||||||
Repayment of loans | 11 | (27,587 | ) | - | (27,587 | ) | ||||||||||
Accrued interest | 11 | 2,598 | - | 2,598 | ||||||||||||
Transaction costs related to borrowings | 9,978 | 567 | 10,545 | |||||||||||||
Total net financing liabilities | 216,105 | 123,959 | 340,064 | |||||||||||||
Effect of changes in foreign exchange rates | 2,790 | 13,340 | 16,130 | |||||||||||||
Balance as at December 31, 2021 | 218,895 | 137,299 | 356,194 |
F - 68 |
Notes to the Consolidated Financial Statements as at December 31, 2022
A. | Composed as follows: |
December 31, 2022 | December 31, 2021 | |||||||||||||||
Face value | Carrying amount | Face value | Carrying amount | |||||||||||||
€ in thousands | € in thousands | |||||||||||||||
Debentures | 111,911 | 110,428 | 139,664 | 137,299 | ||||||||||||
Less current maturities | 19,078 | 18,714 | 20,342 | 19,806 | ||||||||||||
Total long-term debentures | 92,833 | 91,714 | 119,322 | 117,493 |
B. | Debentures - Details |
F - 69 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 12 - Debentures (cont’d)
B. | Debentures - Details (cont'd) |
1. | the Company’s Adjusted Balance Sheet Equity (as such term is defined in the Series C Deet of Trust, which, among other exclusions, excludes changes in the fair value of hedging transactions of electricity prices, such as the Talasol PPA), on a consolidated basis, shall not be less than €50 million for purposes of the immediate repayment provision and shall not be less than €60 for purposes of the update of the annual interest provision; |
2. | The ratio of (a) the short-term and long-term debt from banks, in addition to the debt to holders of debentures issued by us and any other interest-bearing financial obligations, net of cash and cash equivalents and short-term investments and net of financing of projects, including hedging transactions in connection with such financing, of the Company’s subsidiaries (together, the “Series C Net Financial Debt”), to (b) the Company’s Series C Adjusted Balance Sheet Equity, on a consolidated basis, plus the Net Financial Debt (the “Series C CAP, Net” and the “Series C Ratio of Net Financial Debt to Series C CAP, Net,” respectively), shall not exceed the rate of 67.5% for purposes of the immediate repayment provision and shall not exceed a rate of 60% for purposes of the update of the annual interest provision; and |
F - 70 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 12 - Debentures (cont’d)
B. | Debentures - Details (cont'd) |
3. | The ratio of (a) the Series C Net Financial Debt, to (b) the Company’s earnings before financial expenses, net, taxes, depreciation and amortization, where the revenues from the Company’s operations, such as the Talmei Yosef project, are calculated based on the fixed asset model and not based on the financial asset model (IFRIC 12), and before share-based payments, based on the aggregate four preceding quarters (the “Series C Adjusted EBITDA” and the “Series C Ratio of Net Financial Debt to Series C Adjusted EBITDA,” respectively), shall not be higher than 12 for purposes of the immediate repayment provision and shall not be higher than 10 for purposes of the update of the annual interest provision. |
F - 71 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 12 - Debentures (cont’d)
B. | Debentures - Details (cont'd) |
1. | The Company Adjusted Balance Sheet Equity (as such term is defined in the Series D Deed of Trust, which, among other exclusions, excludes changes in the fair value of hedging transactions of electricity prices, such as the Talasol PPA), on a consolidated basis, shall not be less than €70 million for two consecutive quarters for purposes of the immediate repayment provision and shall not be less than €75 for purposes of the update of the annual interest provision; |
2. | The ratio of (a) the short-term and long-term debt from banks, in addition to the debt to holders of debentures issued by us and any other interest-bearing financial obligations provided by entities who are in the business of lending money (excluding financing of projects and other exclusions as set forth in the Series D Deed of Trust), net of cash and cash equivalents, short-term investments, deposits, financial funds and negotiable securities, to the extent that these are not restricted (with the exception of a restriction for the purpose of securing any financial debt according to this definition) (together, the “Series D Net Financial Debt”), to (b) The Series D Adjusted Balance Sheet Equity, on a consolidated basis, plus the Series D Net Financial Debt (the “Series D CAP, Net” and the “Series D Ratio of Net Financial Debt to Series D CAP, Net,” respectively), shall not exceed the rate of 68% for three consecutive quarters for purposes of the immediate repayment provision and shall not exceed a rate of 60% for purposes of the updated of the annual interest provision; and |
3. | The ratio of (a) the Series D Net Financial Debt, to (b) the Company earnings before financial expenses, net, taxes, depreciation and amortization, where the revenues from its operations, such as the Talmei Yosef project, are calculated based on the fixed asset model and not based on the financial asset model (IFRIC 12), and before share-based payments, when the data of assets or projects whose Commercial Operation Date occurred in the four quarters that preceded the test date will be calculated based on Annual Gross Up (as such terms are defined in the Series D Deed of Trust), based on the aggregate four preceding quarters (the “Series D Adjusted EBITDA” and the “Series D Ratio of Net Financial Debt to Series D Adjusted EBITDA,” respectively), shall not be higher than 14 for purposes of the immediate repayment provision and shall not be higher than 12 for purposes of the update of the annual interest provision. |
F - 72 |
Notes to the Consolidated Financial Statements as at December 31, 2022
B. | Debentures - Details (cont'd) |
C. | The aggregate annual maturities are as follows: |
December 31 | December 31 | |||||||
2022 | 2021 | |||||||
€ in thousands | ||||||||
Second year | 37,779 | 19,824 | ||||||
Third year | 37,792 | 40,195 | ||||||
Fourth year | 16,143 | 40,263 | ||||||
Fifth year | - | 17,211 | ||||||
Long-term debentures | 91,714 | 117,493 | ||||||
Current maturities | 18,714 | 19,806 | ||||||
110,428 | 137,299 |
December 31 | December 31 | |||||||
2022 | 2021 | |||||||
€ in thousands | ||||||||
Warrants Liability (refer to Note 16) | 329 | 2,196 | ||||||
Other liabilities (see note 6B) | 1,626 | 1,665 | ||||||
Liabilities for employees benefits | 66 | 44 | ||||||
2,021 | 3,905 |
F - 73 |
Notes to the Consolidated Financial Statements as at December 31, 2022
1. | Lands; and |
2. | Machinery equipment. |
1. | Information regarding material lease agreements |
2. | Information regarding material lease agreements entered into during the period |
3. | Right-of-use assets |
Gelderland | Italy | Spain | Talasol | Talmei Yosef | Pumped storage | Total | ||||||||||||||||||||||
€ in thousands | ||||||||||||||||||||||||||||
Balance as at January 1, 2022 | 170 | - | 2,755 | 7,587 | 1,503 | 11,352 | 23,367 | |||||||||||||||||||||
lease agreements entered into during the period | - | 8,861 | - | - | - | - | 8,861 | |||||||||||||||||||||
Depreciation for the year | (124 | ) | (128 | ) | (120 | ) | (404 | ) | (117 | ) | (473 | ) | (1,366 | ) | ||||||||||||||
Other | - | - | (321 | ) | - | 36 | 228 | (57 | ) | |||||||||||||||||||
Effect of changes in exchange rates | - | - | - | - | (91 | ) | (694 | ) | (785 | ) | ||||||||||||||||||
Balance as at December 31, 2022 | 46 | 8,733 | 2,314 | 7,183 | 1,331 | 10,413 | 30,020 |
F - 74 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 14 - Leases (cont’d)
3. | Right-of-use assets (cont’d) |
Gelderland | Spain | Talasol | Talmei Yosef | Pumped storage | Total | |||||||||||||||||||
€ in thousands | ||||||||||||||||||||||||
Balance as at January 1, 2021 | 355 | 2,874 | 12,517 | 1,463 | - | 17,209 | ||||||||||||||||||
Lease agreements entered into during the period | - | - | - | - | 10,629 | 10,629 | ||||||||||||||||||
Depreciation for the year | (185 | ) | (119 | ) | (404 | ) | (110 | ) | (213 | ) | (1,031 | ) | ||||||||||||
Other | - | - | (4,526 | ) | (18 | ) | 48 | (4,496 | ) | |||||||||||||||
Effect of changes in exchange rates | - | - | - | 168 | 888 | 1,056 | ||||||||||||||||||
Balance as at December 31, 2021 | 170 | 2,755 | 7,587 | 1,503 | 11,352 | 23,367 |
4. | Lease liability |
December 31, 2022 | ||||
€ in thousands | ||||
Less than one year | 745 | |||
One to five years | 3,168 | |||
More than five years | 18,837 | |||
Total | 22,750 | |||
Current maturities of lease liability | 745 | |||
Long-term lease liability | 22,005 |
5. | Additional information on leases |
(a) | Amounts recognized in profit or loss |
2022 | 2021 | 2020 | ||||||||||
€ in thousands | ||||||||||||
Depreciation on right-of-use asset | *743 | 774 | 320 | |||||||||
Interest expenses on lease liability | 370 | 367 | 494 |
* The rest of the depreciation is capitalized to fixed asset.
(b) | Short-term leases |
F - 75 |
Notes to the Consolidated Financial Statements as at December 31, 2022
A. | On December 30, 2008, the Company’s shareholders approved the terms of a management services agreement entered into among the Company, Kanir Joint Investments (2005) Limited Partnership (“Kanir”), the one of the Company’s controlling shareholders, and Meisaf Blue & White Holdings Ltd. (“Meisaf”), a company controlled by the Company’s chairman of the board and controlling shareholder, effective as of March 31, 2008 (the “Previous Management Agreement”). The updated aggregate annual management fee under the Previous Management Agreement was $400 thousand. |
B. | Compensation to key management personnel and interested parties (including directors) |
Year ended December 31 | ||||||||||||||||||||||||
2022 | 2021 | 2020 | ||||||||||||||||||||||
Number of | Number of | Number of | ||||||||||||||||||||||
People | Amount | People | Amount | People | Amount | |||||||||||||||||||
€ thousands | € thousands | € thousands | ||||||||||||||||||||||
Short-term employee | ||||||||||||||||||||||||
Benefits | 3 | 994 | 3 | 763 | 3 | 880 | ||||||||||||||||||
Post-employment | ||||||||||||||||||||||||
Benefits | 2 | 72 | 2 | 61 | 2 | 62 | ||||||||||||||||||
Share-based payments | 3 | 69 | 3 | 68 | 1 | - |
F - 76 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 15 - Transactions and Balances with Related Parties (cont’d)
B. | Compensation to key management personnel and interested parties (including directors) (cont’d) |
Year ended December 31 | ||||||||||||||||||||||||
2022 | 2021 | 2020 | ||||||||||||||||||||||
Number of | Number of | Number of | ||||||||||||||||||||||
people | Amount | people | Amount | People | Amount | |||||||||||||||||||
€ thousands | € thousands | € thousands | ||||||||||||||||||||||
Total compensation to directors not employed by the Company | 4 | 90 | 4 | 72 | 3 | 63 | ||||||||||||||||||
Share-based payments | 4 | 36 | 4 | 10 | 3 | 34 |
C. | Debts and loans to related and interested parties |
Interest income recognized in statement of | |||||||||||||||||||||||||
The terms of the loan | Balance as at December 31 | income for the year ended December 31 | |||||||||||||||||||||||
Interest | Linkage | ||||||||||||||||||||||||
rate | base | 2022 | 2021 | 2022 | 2021 | 2020 | |||||||||||||||||||
% | € thousands | ||||||||||||||||||||||||
Dori Energy | 8.1 (*) | NIS+ Israeli CPI | 2,665 | 8,495 | 1,398 | 821 | 620 |
(*) | See Note 6A regarding the conversion of approximately NIS 46,933 thousand of the shareholders loans (of which the Company’s portion is approximately NIS 23,467 thousand) to capital notes. |
A. | Composition of share capital |
December 31, 2022 | December 31, 2021 | December 31, 2020 | ||||||||||||||||||||||
Issued and | Issued and | Issued and | ||||||||||||||||||||||
Authorized | Outstanding(1) | Authorized | outstanding(1) | Authorized | Outstanding | |||||||||||||||||||
Number of shares | ||||||||||||||||||||||||
Ordinary shares | ||||||||||||||||||||||||
of NIS 10.00 par value each | 17,000,000 | 13,110,631 | (1) | 17,000,000 | 12,849,295 | (1) | 17,000,000 | 12,652,094 | (1) |
(1) | Net of 258,046 Ordinary shares held as treasury shares as of December 31, 2022, 2021 and 2020, all of which have been purchased according to share buyback programs that were authorized the Company's Board of Directors. |
F - 77 |
Notes to the Consolidated Financial Statements as at December 31, 2022
A. | Composition of share capital (cont'd) |
B. | Rights attached to shares: |
1. | Voting rights at the general meeting, right to dividend and rights upon liquidation of the Company. |
2. | Commencing August 22, 2011, the Company’s ordinary shares have been listed on the NYSE American (formerly the NYSE MKT and the NYSE Amex). On October 27, 2013, the Company's ordinary shares were also listed for trading on the Tel Aviv Stock Exchange in Israel. |
C. | Translation reserve from foreign operation |
D. | Capital management in the Company |
1. | To preserve the Company’s ability to ensure business continuity thereby creating a return for the shareholders, investors and other interested parties. |
2. | To ensure adequate return for the shareholders by making reasonable investment decisions based on the level of internal rate of return that is in line with the Company’s business activity. |
3. | To maintain healthy capital ratios in order to support business activity and maximize shareholders value. |
A. | Expenses recognized in the financial statements |
Year ended December 31 | ||||||||||||
2022 | 2021 | 2020 | ||||||||||
€ thousand | ||||||||||||
Expenses arising from share-based payment transactions | 127 | 63 | 50 |
F - 78 |
Notes to the Consolidated Financial Statements as at December 31, 2022
A. | Expenses recognized in the financial statements (cont'd) |
Year ended December 31 | ||||||||||||
2022 | 2021 | 2020 | ||||||||||
Dividend yield | 0 | % | 0 | % | 0 | % | ||||||
Expected volatility | 0.405 | 0.433 | 0.427 | |||||||||
Risk-free interest | 2.9 | % | 0.48 | % | 0.11 | % | ||||||
Expected life (in years) | 2-3 | 2-3 | 2-3 |
Equal market price | ||||||||
2022 | 2021 | |||||||
US$ | ||||||||
Weighted average exercise prices | 27.22 | 29.27 | ||||||
Weighted average fair value on grant date | 7.27 | 9.65 |
B. | Stock Option Plans |
F - 79 |
Notes to the Consolidated Financial Statements as at December 31, 2022
2022 | 2021 | 2020 | ||||||||||||||||||||||
Weighted | Weighted | Weighted | ||||||||||||||||||||||
Average | average | Average | ||||||||||||||||||||||
Number of | Exercise | Number of | exercise | Number of | Exercise | |||||||||||||||||||
options | Price | options | price | options | Price | |||||||||||||||||||
US$ | US$ | US$ | ||||||||||||||||||||||
Outstanding at | ||||||||||||||||||||||||
beginning of year | 48,684 | 26.16 | 31,135 | 12.94 | 34,886 | 9.83 | ||||||||||||||||||
Granted during | ||||||||||||||||||||||||
the year | 4,000 | 27.22 | 37,000 | 29.27 | 4,249 | 28.91 | ||||||||||||||||||
Exercised during | ||||||||||||||||||||||||
the year | (3,290 | ) | 11.19 | (18,451 | ) | 10.06 | (8,000 | ) | 7.87 | |||||||||||||||
Expired during | ||||||||||||||||||||||||
the year | (- | ) | - | (1,000 | ) | 26.63 | - | - | ||||||||||||||||
Outstanding at | ||||||||||||||||||||||||
end of year | 49,394 | 26.98 | 48,684 | 26.16 | 31,135 | 12.94 | ||||||||||||||||||
Exercisable at | ||||||||||||||||||||||||
end of year | 23,394 | 25.25 | 6,749 | 20.05 | 17,018 | 6.3 |
F - 80 |
Notes to the Consolidated Financial Statements as at December 31, 2022
A. | Revenues |
For the year ended December 31 | ||||||||||||
2022 | 2021 | 2020 | ||||||||||
€ in thousands | ||||||||||||
Revenues from the sale of solar electricity | 39,601 | 31,081 | 2,577 | |||||||||
Revenues from the sale of gas and power produced by anaerobic digestion plants | 12,640 | 12,686 | 6,002 | |||||||||
Revenues from concessions project | 1,119 | 1,954 | 1,066 | |||||||||
Total revenues | 53,360 | 45,721 | 9,645 |
B. | Operating Costs, Depreciation and Amortization |
For the year ended December 31 | ||||||||||||
2022 | 2021 | 2020 | ||||||||||
€ in thousands | ||||||||||||
Depreciation from fixed assets | 14,954 | 13,977 | 2,299 | |||||||||
Depreciation from right-of-use assets | 743 | 774 | 320 | |||||||||
Amortization of intangible asset | 395 | 365 | 356 | |||||||||
Professional services | 2,280 | 1,496 | 482 | |||||||||
Operating and maintenance services | 14,115 | 11,456 | 4,025 | |||||||||
System operator charges | 6,882 | 3,046 | - | |||||||||
Insurance | 694 | 549 | 178 | |||||||||
Other | 118 | 1,043 | 266 | |||||||||
Total operating costs | 40,181 | 32,706 | 7,926 |
C. | General and administrative expenses |
For the year ended December 31 | ||||||||||||
2022 | 2021 | 2020 | ||||||||||
€ in thousands | ||||||||||||
Salaries and related compensation | 2,151 | 1,505 | 1,442 | |||||||||
Professional services | 2,404 | 2,822 | 2,057 | |||||||||
Other | 1,337 | 1,334 | 1,013 | |||||||||
Total general and administrative expenses | 5,892 | 5,661 | 4,512 |
F - 81 |
Notes to the Consolidated Financial Statements as at December 31, 2022
D. | Financing income and expenses: |
1. | Financing income |
For the year ended December 31 | ||||||||||||
2022 | 2021 | 2020 | ||||||||||
€ in thousands | ||||||||||||
Interest income and consumer price index in Israel in connection to concession project | 3,103 | 2,248 | 1,423 | |||||||||
Interest income | 420 | 276 | 553 | |||||||||
Change in fair value of derivatives, net | 605 | - | 1,094 | |||||||||
Consumer price index in Israel for loan | - | - | 103 | |||||||||
Swap interest | - | - | 55 | |||||||||
Profit from settlement of derivatives contract | - | 407 | - | |||||||||
Gain from exchange rate differences, net | 6,042 | - | - | |||||||||
Total financing income | 10,170 | 2,931 | 3,228 |
2. | Financing expenses |
For the year ended December 31 | ||||||||||||
2022 | 2021 | 2020 | ||||||||||
€ in thousands | ||||||||||||
Change in fair value of derivatives, net | - | 841 | - | |||||||||
Consumer price index in Israel for loan | 909 | - | - | |||||||||
Debentures interest and related expenses | 2,130 | 3,220 | 2,155 | |||||||||
Interest and commissions related to projects finance | 6,952 | 5,589 | 1,775 | |||||||||
Amortization of capitalized expenses related to projects finance | 275 | 12,211 | 48 | |||||||||
Interest on minority shareholder loan | 1,529 | 2,055 | 41 | |||||||||
Bank charges and other commissions | 471 | 137 | 230 | |||||||||
Interest on lease liability | 370 | 367 | 494 | |||||||||
Loss from exchange rate differences, net | - | 5,395 | 2,119 | |||||||||
Total financing expenses | 12,636 | 29,815 | 6,862 |
F - 82 |
Notes to the Consolidated Financial Statements as at December 31, 2022
- | The real NWT is calculated by the difference between the entity’s total assets and entity’s total liabilities (exemption can be applied) multiplied by 0.5%. |
- | The minimum NWT is from €535 to €21,400. |
For the year ended December 31 | ||||||||||||
2022 | 2021 | 2020 | ||||||||||
€ in thousands | ||||||||||||
Current tax expense | ||||||||||||
Current year | (2,201 | ) | *(978 | ) | (119 | ) | ||||||
Adjustments for prior years, net | (2,936 | ) | — | (4 | ) | |||||||
(5,137 | ) | (978 | ) | (123 | ) | |||||||
Deferred tax income | ||||||||||||
Creation and reversal of temporary differences | 98 | *3,259 | 248 | |||||||||
Adjustments for prior years, net | 2,936 | - | - | |||||||||
3,034 | *3,259 | 248 | ||||||||||
Tax benefit (taxes in income) | (2,103 | ) | 2,281 | 125 |
F - 83 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 19 - Taxes on Income (cont’d)
2022 | 2021 | 2020 | ||||||||||
€ in thousands | ||||||||||||
Profit (loss) before taxes on income | 2,243 | (21,921 | ) | (6,293 | ) | |||||||
Primary tax rate of the Company | 23 | % | 23 | % | 23 | % | ||||||
Tax benefit (tax expenses) calculated according to the Company’s primary tax rate | (516 | ) | 5,042 | 1,447 | ||||||||
Additional tax saving in respect of: | ||||||||||||
Different tax rate of foreign subsidiaries | (526 | ) | (76 | ) | (576 | ) | ||||||
Neutralization of tax calculated in respect of the Company’s share in profits of equity accounted investees | 277 | 27 | 351 | |||||||||
Difference between measurement basis of income (expenses) for tax purposes and measurement basis of income (expenses) for financial reporting purposes | (706 | ) | - | - | ||||||||
Changes in deferred taxes for tax losses and benefits from previous years for which deferred taxes were not created in the past | 282 | - | 483 | |||||||||
Utilization of tax losses and benefits from prior years for which deferred taxes were not created | 566 | - | - | |||||||||
Change in temporary differences for which deferred tax were not recognized | - | 65 | 325 | |||||||||
Current year tax losses and benefits for which deferred taxes were not created | (1,345 | ) | (2,770 | ) | (1,910 | ) | ||||||
Tax benefit (tax expenses) in respect to previous years and others | (135 | ) | (7 | ) | 5 | |||||||
Actual tax benefit (taxes on income) | (2,103 | ) | 2,281 | 125 |
F - 84 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 19 - Taxes on Income (cont’d)
Deferred taxes are recognized by operating subsidiaries for unused tax losses, tax benefits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized.
As of December 31, 2022, the Company’s Dutch subsidiaries had carry forward tax losses and deductions aggregating to approximately €17,464 thousand. Of such carry forward tax losses, deferred tax asset was not recorded in connection with aggregate tax loss amounting to approximately €705 thousand.
Financial | Fixed | Swap | Carry- forward tax | |||||||||||||||||
assets | assets and leases | contract | losses | Total | ||||||||||||||||
€ in thousands | ||||||||||||||||||||
Balance of deferred tax asset (liability) | ||||||||||||||||||||
as at January 1, 2022 | (6,964 | ) | * (1,555 | ) | 5,400 | 7,027 | * 3,908 | |||||||||||||
Changes recognized in profit or loss | 3,065 | (569 | ) | - | 538 | 3,034 | ||||||||||||||
Changes recognized in other comprehensive income | 257 | - | 9,544 | (3 | ) | 9,798 | ||||||||||||||
Balance of deferred tax asset (liability) as at | ||||||||||||||||||||
December 31, 2022 | (3,642 | ) | (2,124 | ) | 14,944 | 7,562 | 16,740 |
Financial | Fixed | Swap | Carry- forward tax | |||||||||||||||||
assets | assets and leases | contract | losses | Total | ||||||||||||||||
€ in thousands | ||||||||||||||||||||
Balance of deferred tax asset (liability) | ||||||||||||||||||||
as at January 1, 2021 | (7,064 | ) | (1,509 | ) | (168 | ) | 4,540 | (4,201 | ) | |||||||||||
Changes recognized in profit or loss | 926 | *(46 | ) | - | 2,379 | 3,259 | ||||||||||||||
Changes recognized in other comprehensive income | (826 | ) | - | 5,568 | 108 | 4,850 | ||||||||||||||
Balance of deferred tax asset (liability) as at | ||||||||||||||||||||
December 31, 2021 | (6,964 | ) | * (1,555 | ) | 5,400 | 7,027 | 3,908 |
F - 85 |
Notes to the Consolidated Financial Statements as at December 31, 2022
For the year ended December 31 | ||||||||||||
2022 | 2021 | 2020 | ||||||||||
€ in thousands (other than share and per share data) | ||||||||||||
Net loss attributed to owners of the Company | (357 | ) | *(15,090 | ) | (4,627 | ) | ||||||
Weighted average ordinary shares outstanding (1) | 12,850,118 | 12,824,088 | 12,304,269 | |||||||||
Dilutive effect: | ||||||||||||
Stock options and warrants | 7,796 | 8,637 | 23,549 | |||||||||
Diluted weighted average ordinary shares outstanding | 12,857,914 | (2) | 12,832,725 | (2) | 12,327,818 | (2) | ||||||
Basic loss per share from continuing operations | (0.03 | ) | *(1.18 | ) | (0.38 | ) | ||||||
Diluted loss per share from continuing operations | (0.03 | ) | *(1.18 | ) | (0.38 | ) |
* Restated following application of an amendment to IAS 16 - see Note 2C.
(1) | Net of treasury shares. |
(2) | In 2022, 2021 and 2020 share options and warrants did not have a dilutive effect. |
F - 86 |
Notes to the Consolidated Financial Statements as at December 31, 2022
A. | Overview |
● | Credit risk |
● | Liquidity risk |
● | Market risk |
For the year ended December | ||||||||
2022 | 2021 | |||||||
€ in thousands | ||||||||
Derivatives presented under current assets | ||||||||
Currency swap | - | 639 | ||||||
Swap contracts | 273 | - | ||||||
273 | 639 | |||||||
Derivatives presented under non-current assets | ||||||||
Swap contracts | 1,488 | - | ||||||
Currency swap | - | 2,635 | ||||||
1,488 | 2,635 | |||||||
Derivatives presented under current liabilities | ||||||||
Swap contracts | - | (3,431 | ) | |||||
Financial power swap | (33,183 | ) | (11,352 | ) | ||||
(33,183 | ) | (14,783 | ) | |||||
Derivatives presented under non-current liabilities | ||||||||
Financial power swap | (28,354 | ) | (9,542 | ) | ||||
Swap contracts | - | (565 | ) | |||||
(28,354 | ) | (10,107 | ) |
F - 87 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 21 - Financial Instruments (cont’d)
December 31, 2022 | ||||||||||
Currency/ | Currency/ | Fair value - € | ||||||||
linkage/interest rate | linkage/interest rate | in | ||||||||
receivable | Payable | Date of expiration | thousand | |||||||
Euro 17.6 million interest swap transaction for a period of 18 years, semi-annually. | Euribor 6 months | Fixed 1% | December 20, 2037 | 1,761 | ||||||
Financial power swap- electricity price swap fixed for float | Electricity price in Spain | Fixed price | September 30, 2030 | (61,537 | ) |
B. | Risk management framework |
F - 88 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 21 - Financial Instruments (cont’d)
C. | Credit Risk |
F - 89 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 21 - Financial Instruments (cont’d)
C. | Credit Risk (cont’d) |
D. | Liquidity risk |
F - 90 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 21 - Financial Instruments (cont’d)
D. | Liquidity risk (cont’d) |
December 31, 2022 | ||||||||||||||||||||||||
Carrying | Contractual | Less than | More than | |||||||||||||||||||||
amount | cash flows | 1 year | 2 years | 3-5 years | 5 years | |||||||||||||||||||
€ in thousands | ||||||||||||||||||||||||
Non-derivative financial liabilities | ||||||||||||||||||||||||
Long term loans, including current maturities | 273,863 | 363,553 | 30,392 | 42,547 | 43,381 | 247,233 | ||||||||||||||||||
Debentures | 110,428 | 141,140 | 22,878 | 62,710 | 55,552 | - | ||||||||||||||||||
Lease liabilities | 22,750 | 35,911 | 1,630 | 3,233 | 3,194 | 27,854 | ||||||||||||||||||
Trade payables and other accounts payable | 15,144 | 15,144 | 15,144 | - | - | - | ||||||||||||||||||
422,185 | 555,748 | 70,044 | 108,490 | 102,127 | 275,087 | |||||||||||||||||||
Derivative finance liabilities | ||||||||||||||||||||||||
Financial power swap | 61,537 | 61,537 | 33,183 | 26,424 | (2,666 | ) | 4,596 | |||||||||||||||||
61,537 | 61,537 | 33,183 | 26,424 | (2,666 | ) | 4,596 |
December 31, 2021 | ||||||||||||||||||||||||
Carrying | Contractual | Less than | More than | |||||||||||||||||||||
amount | cash flows | 1 year | 2 years | 3-5 years | 5 years | |||||||||||||||||||
€ in thousands | ||||||||||||||||||||||||
Non-derivative financial liabilities | ||||||||||||||||||||||||
Long term loans, including current maturities | 218,895 | 240,038 | 147,127 | 20,671 | 18,347 | 53,892 | ||||||||||||||||||
Debentures | 137,299 | 150,116 | 24,244 | 66,481 | 59,391 | - | ||||||||||||||||||
Lease liabilities | 20,129 | 25,825 | 4,832 | 2,244 | 2,201 | 16,548 | ||||||||||||||||||
Trade payables and other accounts payable | 22,058 | 22,058 | 22,058 | - | - | - | ||||||||||||||||||
398,381 | 438,037 | 198,261 | 89,396 | 79,939 | 70,440 | |||||||||||||||||||
Derivative finance liabilities | ||||||||||||||||||||||||
Financial power swap | 20,894 | 20,894 | 11,352 | 14,079 | 1,961 | (6,498 | ) | |||||||||||||||||
Swap contracts | 3,996 | 3,996 | 3,431 | 234 | 157 | 174 | ||||||||||||||||||
24,890 | 24,890 | 14,783 | 14,313 | 2,118 | (6,324 | ) |
F - 91 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 21 - Financial Instruments (cont’d)
E. | Market risk |
(1) | Foreign currency risk |
F - 92 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 21 - Financial Instruments (cont’d)
E. | Market risk (cont’d) |
(1) | Foreign currency risk (cont’d) |
(a) | The exposure to linkage and foreign currency risk |
December 31, 2022 | ||||||||||||||||||||
Non-monetary/ Non finance | NIS(*) | Unlinked | EURO | Total | ||||||||||||||||
€ in thousands | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | - | 30,359 | 55 | 16,044 | 46,458 | |||||||||||||||
Marketable securities | - | - | 2,836 | - | 2,836 | |||||||||||||||
Restricted cash | - | - | - | 900 | 900 | |||||||||||||||
Receivable from concession project | - | 1,799 | - | - | 1,799 | |||||||||||||||
Trade and other receivables | 2,174 | 4,694 | 16 | 5,798 | 12,682 | |||||||||||||||
Non-current assets: | ||||||||||||||||||||
Investments in equity accounted investees | 23,976 | 6,053 | - | - | 30,029 | |||||||||||||||
Advances on account of investments | 2,328 | - | - | - | 2,328 | |||||||||||||||
Receivable from concession project | - | 24,795 | - | - | 24,795 | |||||||||||||||
Fixed assets | 365,756 | - | - | - | 365,756 | |||||||||||||||
Right-of-use asset | 30,020 | - | - | - | 30,020 | |||||||||||||||
Intangible asset | 4,094 | - | - | - | 4,094 | |||||||||||||||
Restricted cash and deposits | - | 5,607 | - | 14,585 | 20,192 | |||||||||||||||
Deferred tax | 23,510 | - | - | - | 23,510 | |||||||||||||||
Long term receivables | 7,840 | 1,171 | - | 259 | 9,270 | |||||||||||||||
Derivatives | - | - | - | 1,488 | 1,488 | |||||||||||||||
Current liabilities: | ||||||||||||||||||||
Current maturities of long term bank loans | - | (2,091 | ) | - | (10,724 | ) | (12,815 | ) | ||||||||||||
Current maturities of long term loans | - | - | - | (10,000 | ) | (10,000 | ) | |||||||||||||
Current maturities of debentures | - | (18,714 | ) | - | - | (18,714 | ) | |||||||||||||
Trade payables | - | (123 | ) | - | (4,381 | ) | (4,504 | ) | ||||||||||||
Other payables | - | (6,107 | ) | - | (5,100 | ) | (11,207 | ) | ||||||||||||
Current maturities of derivatives | - | - | - | (33,183 | ) | (33,183 | ) | |||||||||||||
Current maturities of lease liabilities | - | (193 | ) | - | (552 | ) | (745 | ) | ||||||||||||
Non-current liabilities: | ||||||||||||||||||||
Long-term lease liabilities | - | (4,740 | ) | - | (17,265 | ) | (22,005 | ) | ||||||||||||
Long-term loans | - | (13,495 | ) | - | (215,971 | ) | (229,466 | ) | ||||||||||||
Other long-term bank loans | - | (7,538 | ) | - | (14,044 | ) | (21,582 | ) | ||||||||||||
Debentures | - | (91,714 | ) | - | - | (91,714 | ) | |||||||||||||
Deferred tax | (6,770 | ) | - | - | - | (6,770 | ) | |||||||||||||
Derivatives | - | - | - | (28,354 | ) | (28,354 | ) | |||||||||||||
Other long-term liabilities | - | (2,021 | ) | - | - | (2,021 | ) | |||||||||||||
Total exposure in statement | ||||||||||||||||||||
of financial position in | ||||||||||||||||||||
respect of financial assets | ||||||||||||||||||||
and financial liabilities | 452,928 | (72,258 | ) | 2,907 | (300,500 | ) | 83,077 |
F - 93 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 21 - Financial Instruments (cont’d)
E. | Market risk (cont’d) |
(1) | Foreign currency risk (cont’d) |
(a) | The exposure to linkage and foreign currency risk (cont’d) |
December 31, 2021 | ||||||||||||||||||||
Non-monetary/ Non finance | NIS(**) | Unlinked | EURO | Total | ||||||||||||||||
€ in thousands | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | - | 30,405 | 1,090 | 9,734 | 41,229 | |||||||||||||||
Marketable securities | - | - | 1,946 | - | 1,946 | |||||||||||||||
Short term deposits | - | 28,410 | - | - | 28,410 | |||||||||||||||
Restricted cash | - | - | - | 1,000 | 1,000 | |||||||||||||||
Receivable from concession project | - | 1,784 | - | - | 1,784 | |||||||||||||||
Trade and other receivables | 1,020 | 739 | - | 7,728 | 9,487 | |||||||||||||||
Non-current assets: | ||||||||||||||||||||
Investments in equity accounted investees | 25,534 | 8,495 | - | - | 34,029 | |||||||||||||||
Advances on account of investments | 1,554 | - | - | - | 1,554 | |||||||||||||||
Receivable from concession project | - | 26,909 | - | - | 26,909 | |||||||||||||||
Fixed assets | *340,897 | - | - | - | 340,897 | |||||||||||||||
Right-of-use asset | 23,367 | - | - | - | 23,367 | |||||||||||||||
Intangible asset | 4,762 | - | - | - | 4,762 | |||||||||||||||
Restricted cash and deposits | - | 6,630 | - | 9,000 | 15,630 | |||||||||||||||
Deferred tax | 12,952 | - | - | - | 12,952 | |||||||||||||||
Long term receivables | 1,928 | 1,272 | - | 2,188 | 5,388 | |||||||||||||||
Derivatives | - | - | - | 2,635 | 2,635 | |||||||||||||||
Current liabilities: | ||||||||||||||||||||
Current maturities of long term bank loans | - | (2,024 | ) | - | (124,156 | ) | (126,180 | ) | ||||||||||||
Current maturities of long term loans | - | - | - | (16,401 | ) | (16,401 | ) | |||||||||||||
Current maturities of debentures | - | (19,806 | ) | - | - | (19,806 | ) | |||||||||||||
Trade payables | - | (218 | ) | - | (2,686 | ) | (2,904 | ) | ||||||||||||
Other payables | - | (6,882 | ) | (527 | ) | (13,397 | ) | (20,806 | ) | |||||||||||
Current maturities of derivatives | - | - | - | (14,783 | ) | (14,783 | ) | |||||||||||||
Current maturities of lease liabilities | - | (3,782 | ) | - | (547 | ) | (4,329 | ) | ||||||||||||
Non-current liabilities: | ||||||||||||||||||||
Long-term lease liabilities | - | (5,154 | ) | - | (10,646 | ) | (15,800 | ) | ||||||||||||
Long-term loans | - | (15,803 | ) | - | (23,290 | ) | (39,093 | ) | ||||||||||||
Other long-term bank loans | - | (6,898 | ) | - | (30,323 | ) | (37,221 | ) | ||||||||||||
Debentures | - | (117,493 | ) | - | - | (117,493 | ) | |||||||||||||
Deferred tax | *(9,044 | ) | - | - | - | (9,044 | ) | |||||||||||||
Derivatives | - | - | - | (10,107 | ) | (10,107 | ) | |||||||||||||
Other long-term liabilities | - | (3,905 | ) | - | - | (3,905 | ) | |||||||||||||
Total exposure in statement | ||||||||||||||||||||
of financial position in | ||||||||||||||||||||
respect of financial assets | ||||||||||||||||||||
and financial liabilities | 402,970 | (77,321 | ) | 2,509 | (214,051 | ) | 114,107 |
F - 94 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 21 - Financial Instruments (cont’d)
E. | Market risk (cont’d) |
(1) | Foreign currency risk (cont’d) |
(a) | The exposure to linkage and foreign currency risk (cont’d) |
For the year ended December 31 | ||||||||||||||||
Rate of | Rate of | |||||||||||||||
Change | Change | |||||||||||||||
% | Dollar | % | NIS | |||||||||||||
1 Euro in 2022 | (5.8 | ) | 1.066 | 6.6 | 3.753 | |||||||||||
1 Euro in 2021 | (7.7 | ) | 1.132 | (10.8 | ) | 3.520 |
(b) | Sensitivity analysis |
December 31, 2022 | ||||||||
Increase | Decrease | |||||||
Equity | Equity | |||||||
€ thousands | ||||||||
Change in the exchange rate of: | ||||||||
5% in the USD | 155 | (155 | ) | |||||
5% in NIS | (963 | ) | 963 |
December 31, 2021 | ||||||||
Increase | Increase | |||||||
Equity | Equity | |||||||
€ thousands | ||||||||
Change in the exchange rate of: | ||||||||
5% in the USD | 111 | (111 | ) | |||||
5% in NIS | (1,098 | ) | 1,098 |
F - 95 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 21 - Financial Instruments (cont’d)
E. | Market risk (cont’d) |
(2) | Interest rate risk |
December 31, | ||||||||
2022 | 2021 | |||||||
Profit or loss | Profit or loss | |||||||
€ in thousands | ||||||||
Increase of 1% | 1,313 | 2,446 | ||||||
Increase of 3% | 4,245 | 7,368 | ||||||
Decrease of 1% | (1,615 | ) | (2,474 | ) | ||||
Decrease of 3% | (4,548 | ) | (7,396 | ) |
(3) | Electricity market prices risk |
F - 96 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 21 - Financial Instruments (cont’d)
F. | Fair value |
(1) | Fair values versus carrying amounts |
December 31, 2022 |
Fair value | |||||||||||||||||||
Carrying | Valuation techniques for | Inputs used to | |||||||||||||||||
amount | Level 1 | Level 2 | Level 3 | determining fair value | determine fair value | ||||||||||||||
€ in thousands | |||||||||||||||||||
Non-current liabilities: | |||||||||||||||||||
Debentures | 110,428 | 102,957 | - | - | |||||||||||||||
Loans from banks and others (including current maturities) | 273,863 | - | 217,073 | - | Discounting future cash flows by the market interest rate on the date of measurement. | Discount rate of Euribor+ 2% with a zero floor, Euribor+ 5.27%, fix rate for 5 years 2.65%-4.5% Linkage to Euribor, fix rate 2.58%-3.03%, fix rate 2.75%-7% Linkage to Consumer price index in Israel and floating interest rate based on the Bank of Israel Rate plus a spread of 4.35%. | |||||||||||||
384,291 | 102,957 | 217,073 | - |
December 31, 2021 |
Fair value | |||||||||||||||||||
Carrying | Valuation techniques for | Inputs used to | |||||||||||||||||
amount | Level 1 | Level 2 | Level 3 | determining fair value | determine fair value | ||||||||||||||
€ in thousands | |||||||||||||||||||
Non-current liabilities: | |||||||||||||||||||
Debentures | 137,299 | 140,293 | - | - | |||||||||||||||
Loans from banks and others (including current maturities) | 218,895 | - | 223,287 | - | Discounting future cash flows by the market interest rate on the date of measurement. | Discount rate of Euribor+ 2.53%, fix rate for 5 years 2.9%-3.1% and 4.65% Linkage to Consumer price index in Israel | |||||||||||||
356,194 | 140,293 | 223,287 | - |
F - 97 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 21 - Financial Instruments (cont’d)
F. | Fair value (cont’d) |
(2) | Interest rates used for determining fair value |
December 31, | |||
2022 | 2021 | ||
% | |||
Non-current liabilities: | |||
Loans from banks | Discount rate of Euribor+ 2% with a zero floor | Euribor+ 1.76%- 2.75% with a zero floor | |
Loans from banks | fix rate for 5 years 2.65%-4.5% Linkage to Euribor | fix rate for 5 years 2.65% - 3.55% | |
Loans from banks | 4.65% Linkage to Consumer price index in Israel | 4.65% Linkage to Consumer price index in Israel | |
Loans from banks | fix rate 2.58%-3.03% | - | |
Loans from others | Euribor+ 5.27% | Euribor+ 5.27% | |
Loans from others | 7% Linkage to Consumer price index in Israel and fixed rate of 5.5% | 7% Linkage to Consumer price index in Israel and fixed rate of 5.5% |
(3) | Fair values hierarchy |
Level 1 | - | Quoted prices (unadjusted) in active markets for identical assets or liabilities. |
Level 2 | - | Inputs other than quoted prices included within Level 1 that are observable either directly or indirectly. |
Level 3 | - | Inputs that are not based on observable market data (unobservable inputs). |
F - 98 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 21 - Financial Instruments (cont’d)
F. | Fair value (cont’d) |
(3) | Fair values hierarchy (Cont’d) |
December 31, 2022 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Valuation techniques for | |||||||||||||
€ in thousands | determining fair value | ||||||||||||||||
Marketable securities | 2,836 | - | - | 2,836 | Market price | ||||||||||||
Swap contracts | - | 1,761 | - | 1,761 | Fair value is measured by discounting the future cash flows, over the period of the contract and using market interest rates appropriate for similar instruments, including the adjustment required for the parties’ credit risks. | ||||||||||||
Financial power swap | - | - | (61,537 | ) | (61,537 | ) | Fair value is measured by discounting the future fixed and assessed cash flows, over the period of the contract and using market interest rates appropriate for similar instruments. The value is adjusted for the parties’ credit risks. |
December 31, 2021 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Valuation techniques for | |||||||||||||
€ in thousands | determining fair value | ||||||||||||||||
Marketable securities | 1,946 | - | - | 1,946 | Market price | ||||||||||||
Swap contracts | - | (3,996 | ) | - | (3,996 | ) | Fair value is measured by discounting the future cash flows, over the period of the contract and using market interest rates appropriate for similar instruments, including the adjustment required for the parties’ credit risks. | ||||||||||
Currency swap | - | 3,274 | - | 3,274 | Fair value is measured by discounting the future cash flows, over the period of the contract and using market interest rates appropriate for similar instruments, including the adjustment required for the parties’ credit risks. | ||||||||||||
Dori Energy loan | - | - | 8,495 | 8,495 | The fair value is measured by discounting the expected future loan repayments and using market interest rates appropriate for similar instruments, including the adjustment required for the parties’ credit risks. The discounting rate was estimated at approximately 10% and the expected yearly change of Israeli Consumer Price Index, during the expected lifetime of the loan, was estimated at approximately 1%. | ||||||||||||
Financial power swap | - | - | (20,894 | ) | (20,894 | ) | Fair value is measured by discounting the future fixed and assessed cash flows, over the period of the contract and using market interest rates appropriate for similar instruments. The value is adjusted for the parties’ credit risks. |
F - 99 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 21 - Financial Instruments (cont’d)
F. | Fair value (cont'd) |
(4) | Level 3 financial instruments carried at fair value |
Financial assets | ||||
Dori Energy loan | ||||
€ in thousands | ||||
Balance as at December 31, 2020 | 8,745 | |||
Total income recognized in profit or loss | 799 | |||
Grant of loan | 335 | |||
Repayment | (2,259 | ) | ||
Foreign Currency translation adjustments | 875 | |||
Balance as at December 31, 2021 | 8,495 | |||
Total income recognized in profit or loss | 243 | |||
Grant of loan | 128 | |||
Repayment | (149 | ) | ||
Conversion to capital notes | (6,053 | ) | ||
(2,665 | ) | |||
Current maturities | (2,665 | ) | ||
Balance as at December 31, 2022 | - |
Financial liability | ||||
Financial power swap | ||||
€ in thousands | ||||
Balance as at December 31, 2020 | 10,238 | |||
Total income recognized in other comprehensive income | (31,132 | ) | ||
Balance as at December 31, 2021 | (20,894 | ) | ||
Total income is recognized in other comprehensive income | (40,643 | ) | ||
Balance as at December 31, 2022 | (61,537 | ) |
F - 100 |
Notes to the Consolidated Financial Statements as at December 31, 2022
● | Photovoltaic power plants (“PV Plants”) – Operation of installations that convert the energy in sunlight into electrical energy as follows: (i) approximately 7.9MWp aggregate installed capacity of photovoltaic power plants in Spain, (ii) Ellomay Solar S.L.U, a photovoltaic plant with a peak capacity of 28 MW in the municipality of Talaván, Cáceres, Spain, that was connected to the electricity grid at June 24, 2022 (iii) 51% of Talasol, with a peak capacity of 300 MW in the municipality of Talaván, Cáceres, Spain, (iv) a photovoltaic power plant of approximately 9 MWp installed capacity in Israel (v) Ellomay Solar Italy One SRL and Ellomay Solar Italy Two SRL that are constructing photovoltaic plants with installed capacity of 14.8 MW and 4.95 MW respectively, in the Lazio Region, Italy and (vi) Ellomay Solar Italy four SRL, Ellomay Solar Italy five SRL and Ellomay Solar Italy Ten SRL that are developing photovoltaic projects with installed capacity of 15.06 MW, 87.2 MW and 18 respectively, in the Lazio Region, Italy that have reached “ready to build” status. |
● | Groen Gas Goor B.V., Groen Gas Oude-Tonge B.V. and Groen Gas Gelderland B.V. (BioGas), project companies operating anaerobic digestion plants in the Netherlands, with a green gas production capacity of approximately 3 million, 3.8 million and 9.5 million Nm3 per year, respectively. |
● | Dorad Energy Ltd. (Dorad) – 9.375% indirect interest in Dorad, which owns and operates a combined cycle power plant based on natural gas, with production capacity of approximately 860 MW, located south of Ashkelon, Israel. |
● | Pumped storage hydro power plant (Manara) – 83.333% indirect interest in a company constructing a 156 MW pumped storage hydro power plant in the Manara Cliff, Israel. |
F - 101 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 22 - Operating Segments (cont’d)
PV | Total | |||||||||||||||||||||||||||||||||||||||||||
Ellomay | Bio | reportable | Total | |||||||||||||||||||||||||||||||||||||||||
Italy | Spain | Solar | Talasol | Israel | Gas | Dorad | Manara | segments | Reconciliations | consolidated | ||||||||||||||||||||||||||||||||||
For the year ended December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||
€ in thousands | ||||||||||||||||||||||||||||||||||||||||||||
Revenues | - | 3,264 | 3,597 | 32,740 | 1,119 | 12,640 | 62,813 | - | 116,173 | (62,813 | ) | 53,360 | ||||||||||||||||||||||||||||||||
Operating expenses | - | (322 | ) | (1,399 | ) | (8,764 | ) | (418 | ) | (13,186 | ) | (47,442 | ) | - | (71,531 | ) | 47,442 | (24,089 | ) | |||||||||||||||||||||||||
Depreciation expenses | - | (908 | ) | (427 | ) | (11,400 | ) | (512 | ) | (2,824 | ) | (6,339 | ) | - | (22,410 | ) | 6,318 | (16,092 | ) | |||||||||||||||||||||||||
Gross profit (loss) | - | 2,034 | 1,771 | 12,576 | 189 | (3,370 | ) | 9,032 | - | 22,232 | (9,053 | ) | 13,179 | |||||||||||||||||||||||||||||||
Adjusted gross profit (loss) | - | 2,034 | 1,771 | 12,576 | 1,565 | 1 | (3,370 | ) | 9,032 | - | 23,608 | (10,429 | ) | 13,179 | ||||||||||||||||||||||||||||||
Project development costs | (3,784 | ) | ||||||||||||||||||||||||||||||||||||||||||
General and administrative expenses | (5,892 | ) | ||||||||||||||||||||||||||||||||||||||||||
Share of loss of equity accounted investee | 1,206 | |||||||||||||||||||||||||||||||||||||||||||
Operating profit | 4,709 | |||||||||||||||||||||||||||||||||||||||||||
Financing income | 9,565 | |||||||||||||||||||||||||||||||||||||||||||
Financing expenses in connection | ||||||||||||||||||||||||||||||||||||||||||||
with derivatives and warrants, net | 605 | |||||||||||||||||||||||||||||||||||||||||||
Financing expenses, net | (12,636 | ) | ||||||||||||||||||||||||||||||||||||||||||
Loss before taxes on income | 2,243 | |||||||||||||||||||||||||||||||||||||||||||
Segment assets as at December 31, 2022 | 22,608 | 14,577 | 20,090 | 244,584 | 34,750 | 32,002 | 107,079 | 137,432 | 613,122 | (36,965 | ) | 576,157 |
F - 102 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 22 - Operating Segments (cont’d)
PV | Total | |||||||||||||||||||||||||||||||||||||||||||
Ellomay | Bio | reportable | Total | |||||||||||||||||||||||||||||||||||||||||
Italy | Spain | Solar | Talasol | Israel | Gas | Dorad | Manara | segments | Reconciliations | consolidated | ||||||||||||||||||||||||||||||||||
For the year ended December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||
€ in thousands | ||||||||||||||||||||||||||||||||||||||||||||
Revenues | - | 2,587 | - | 29,432 | *1,016 | 12,686 | 51,630 | - | 97,351 | (51,630 | ) | 45,721 | ||||||||||||||||||||||||||||||||
Operating expenses | - | (472 | ) | - | (6,305 | ) | (367 | ) | (10,446 | ) | (39,175 | ) | - | (56,765 | ) | 39,175 | (17,590 | ) | ||||||||||||||||||||||||||
Depreciation expenses | - | (904 | ) | - | (10,586 | ) | (475 | ) | (3,135 | ) | (5,539 | ) | - | (20,639 | ) | 5,523 | (15,116 | ) | ||||||||||||||||||||||||||
Gross profit (loss) | - | 1,211 | - | 12,541 | *174 | (895 | ) | 6,916 | - | 19,947 | (6,932 | ) | 13,015 | |||||||||||||||||||||||||||||||
Adjusted gross profit (loss) | - | 1,211 | - | 12,541 | 1,514 | 2 | (895 | ) | 6,916 | - | 21,287 | (8,272 | ) | 13,015 | ||||||||||||||||||||||||||||||
Project development costs | (2,508 | ) | ||||||||||||||||||||||||||||||||||||||||||
General and administrative expenses | (5,661 | ) | ||||||||||||||||||||||||||||||||||||||||||
Share of loss of equity accounted investee | 117 | |||||||||||||||||||||||||||||||||||||||||||
Operating profit | 4,963 | |||||||||||||||||||||||||||||||||||||||||||
Financing income | 2,931 | |||||||||||||||||||||||||||||||||||||||||||
Financing expenses in connection | ||||||||||||||||||||||||||||||||||||||||||||
with derivatives and warrants, net | (841 | ) | ||||||||||||||||||||||||||||||||||||||||||
Financing expenses, net | (28,974 | ) | ||||||||||||||||||||||||||||||||||||||||||
Loss before taxes on income | (21,921 | ) | ||||||||||||||||||||||||||||||||||||||||||
Segment assets as at December 31, 2021 | 1,715 | 13,841 | 14,456 | 247,004 | 38,809 | 34,570 | 118,435 | 107,678 | 576,508 | (24,529 | ) | 551,979 |
* Segment presentation for prior periods was adjusted to reflect revenues and operating expenses for the Talmei Yosef PV Plant under IFRIC 12 and not under the fixed asset model and to include the adjusted gross profit of such segment, to align the presentation with the presentation of the segments for the year ended December 31, 2022.
F - 103 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 22 - Operating Segments (cont’d)
PV | Total | |||||||||||||||||||||||||||||||||||||||||||
Ellomay | Bio | reportable | Total | |||||||||||||||||||||||||||||||||||||||||
Italy | Spain | Solar | Talasol | Israel | Gas | Dorad | Manara | segments | Reconciliations | consolidated | ||||||||||||||||||||||||||||||||||
For the year ended December 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||
€ in thousands | ||||||||||||||||||||||||||||||||||||||||||||
Revenues | - | 2,577 | - | - | *1,066 | 6,002 | 57,495 | - | 67,140 | (57,495 | ) | 9,645 | ||||||||||||||||||||||||||||||||
Operating expenses | - | (463 | ) | - | - | (379 | ) | (4,109 | ) | (44,489 | ) | - | (49,440 | ) | 44,489 | (4,951 | ) | |||||||||||||||||||||||||||
Depreciation expenses | - | (905 | ) | - | - | (462 | ) | (1,457 | ) | (5,674 | ) | - | (8,498 | ) | 5,523 | (2,975 | ) | |||||||||||||||||||||||||||
Gross profit (loss) | - | 1,209 | - | - | 225 | 436 | 7,332 | - | 9,202 | (7,483 | ) | 1,719 | ||||||||||||||||||||||||||||||||
Adjusted gross profit (loss) | - | 1,209 | - | - | 1,400 | 3 | 436 | 7,332 | - | 10,377 | (8,658 | ) | 1,719 | |||||||||||||||||||||||||||||||
Project development costs | (3,491 | ) | ||||||||||||||||||||||||||||||||||||||||||
General and administrative expenses | (4,512 | ) | ||||||||||||||||||||||||||||||||||||||||||
Share of loss of equity accounted investee | 1,525 | |||||||||||||||||||||||||||||||||||||||||||
Other income, net | 2,100 | |||||||||||||||||||||||||||||||||||||||||||
Operating profit | (2,659 | ) | ||||||||||||||||||||||||||||||||||||||||||
Financing income | 2,134 | |||||||||||||||||||||||||||||||||||||||||||
Financing expenses in connection | ||||||||||||||||||||||||||||||||||||||||||||
with derivatives and warrants, net | 1,094 | |||||||||||||||||||||||||||||||||||||||||||
Financing expenses, net | (6,862 | ) | ||||||||||||||||||||||||||||||||||||||||||
Loss before taxes on income | (6,293 | ) | ||||||||||||||||||||||||||||||||||||||||||
Segment assets as at December 31, 2020 | 503 | 15,220 | 2,354 | 232,955 | 36,521 | 36,253 | 109,983 | 21,925 | 455,714 | 4,458 | 460,172 |
* Segment presentation for prior periods was adjusted to reflect revenues and operating expenses for the Talmei Yosef PV Plant under IFRIC 12 and not under the fixed asset model and to include the adjusted gross profit of such segment, to align the presentation with the presentation of the segments for the year ended December 31, 2022.
F - 104 |
Notes to the Consolidated Financial Statements as at December 31, 2022
Note 22 - Operating Segments (cont’d)
For the year ended December 31 | ||||||||||||
2022 | 2021 | 2020 | ||||||||||
€ in thousands | ||||||||||||
Israel | 1,119 | 1,016 | 1,066 | |||||||||
Italy | - | - | - | |||||||||
The Netherlands | 12,640 | 12,686 | 6,002 | |||||||||
Spain (including Talasol PV Plant) | 39,601 | 32,019 | 2,577 | |||||||||
Total revenues | 53,360 | 45,721 | 9,645 |
As at December 31 | ||||||||
2022 | 2021 | |||||||
€ in thousands | ||||||||
Israel | 102,518 | 78,928 | ||||||
Italy | 9,043 | - | ||||||
Spain (including Talasol PV Plant) | 227,492 | 233,729 | ||||||
The Netherlands | 26,703 | 28,240 | ||||||
Total fixed assets, net | 365,756 | 340,897 |
F - 105 |
Notes to the Consolidated Financial Statements as at December 31, 2022
(1) | On February 1, 2023, the Company issued NIS 220 million (approximately €58.5 million, as of the issuance date) of the Series E Secured Debentures, due March 31, 2029, through a public offering in Israel. The net proceeds of the offering, net of related expenses such as consultancy fee and commissions, were approximately NIS 218 million (approximately €56 million as of the issuance date). The Series E Debentures are secured by pledges on the shares of Dori Energy held by Ellomay Energy LP and on Ellomay Energy LP’s rights and agreements in connection with shareholder’s loans provided by Ellomay Energy LP to Dori Energy. The Deed of Trust governing the Series E Secured Debentures includes several limitations and requirements applicable to the Company’s holdings in Dori Energy and additional provisions that may limit the Company’s ability to sell the Company’s holdings in Dori Energy or to revise arrangements with Dori Energy. The principal amount of Series E Secured Debentures is repayable four equal installment on March 31 from 2026 through 2029 (inclusive). The Series E Secured Debentures bear a fixed interest at the rate of 6.05% per year (that is not linked to the Israeli CPI or otherwise), payable semi-annually on March 31 and September 30, commencing March 31, 2023 through March 31, 2029 (inclusive). |
(2) | On March 14, 2023, the Company entered into a Joint Development Agreement (the “JDA”) for the development of solar photovoltaic projects in the State of Texas. The JDA was executed with a project development company experienced in the development of energy projects, site acquisition, capital markets and commercial management. The JDA provides for the initial development, design, construction and finance of two solar PV projects with aggregate projected DC capacity of 23 MW (the “First Projects”). The First Projects are in advanced stages of development and the estimated capital costs of the First Projects are in the range of $25-$27 million. The Company’s share of the capital costs of the First Projects is estimated at approximately $18-$20 million and the balance is intended to be provided by tax equity sources with whom the Company is currently in discussions. The sites for the First Projects will be leased under long-term leases from special purpose companies (“Landcos”) controlled by the development team. One of the First Projects, with a DC capacity of approximately 13 MW, is expected to achieve Ready to Build status within six months. The JDA also provides for the development of three additional solar PV projects up to Ready to Build status with aggregate DC capacity of approximately 30 MW. The projects to be developed under the JDA will be subject to the ERCOT Distributed Generation (“DG”) Scheme for projects of up to 10 MW AC capacity and the applicable electricity market is the “ERCOT North” zone market. Under the DG Scheme, ERCOT (the electricity regulator of the State of Texas), allows owners of generation assets to sell electricity to Qualified Service Entities (QSE’s) at market rates under Real Time or Day Ahead prices at the local nodes where the projects are located and/or to designated “Behind the Meter” clients under Power Purchase Agreements. |
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