GNE - Earnings call transcript Q3 2017

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to Genie Energy's Third Quarter 2017 Earnings Call. All participants will be in a listen-only mode. [Operator Instructions]. After today’s presentation by Genie Energy's management, there will be an opportunity to ask questions. [Operator Instructions]. Energy's the will XX, three-month Genie operational financial XXXX. presentation, for results period its management discuss team and In ended September the may specific which in Any call, are from subject the during those made and nature results session, prepared uncertainties to risks in materially that Q&A or forward-looking anticipates. in actual remarks the general this whether company to or cause statements either conference differ the risks uncertainties and not but that and periodically uncertainties files include, in specific risks These limited with discussed are reports SEC. Energy Genie to, the forward-looking Energy that make obligation, Genie factors results that no either assumes update forecast. materially to have to that may update or differ any cause actual those to statements made may the they from or they

Energy's to of presented Genie reference Management excluded not adjusted non-GAAP either company's or flows or should directly comparable make may may excludes by EBITDA, measure core results. Generally, be certain this that for, superior with and release EBITDA event to is performance, provides both Genie Genie considered GAAP. cash GAAP. earnings and the be net or ahead, on EBITDA believes or addition includes non-GAAP measure management Chief Adjusted are Genie's available on is accordance excluding in income net in the cash Energy's financial remarks, loss, measure filed over and financial Please expenses that adjusted reconciliation gross performance amounts their turn or Stein, including and flow financial information earnings normally the The of note diluted a the www.genie.com. now liquidity Executive a that I’ll investors as Genie in or calculated substitute measures X-K most prepared of SEC. profit, the a has relevant with Form of Mr. or the in from income recorded. operations, or a Energy's share of is included measure. earnings Relations The Officer. from per is website, indicative like page income numerical not also a other loss management or Please Energy a activities, to, not useful Investor segment's conference Corporation accordance EBITDA basic which loss Michael Stein. to operating position with the release operating been adjusted to to, being During that go

Michael Stein

and Energy's Chairman This CEO we Chief Officer not Rochwarger, Welcome then on will are three update Genie Thank energy Israel. operations Geoff with September at remarks and of will morning will you then progress Energy's financial off lead Genie quarter's Vice operational take review the Intel of remarks we conclusion results. Goldin, Avi's At in our Genie Financial or financial the Genie Retail operator. progress discuss Geoff's results your E&P operational our will I quarter questions. After for review racial to Avi XX, an call. earnings the they with XXXX third ended will not XXXX. Energy, months

want Retail priorities. strategic step back some Energy's to Genie I Energy's review Before discussing Genie and results take of a

base resource significant retail we by intent new priorities keeping we shareholder investment while retail achieved growth on and customer made our on our balance markets expanding and the continue liquid we synergistic we expanding organic XX. Behind November. identified drilling to are we adding risk, last progress initiatives. growth integrate In calls energy Israel diversifying and which GRE's discussed Square we to to and diversifying enhancing have Israel these scenes our and with solutions of geographically area characterizing acquired Town acquisitions in growth the markets our customer each Energy thereby meter tremendous further energy of Northern sheet our quarter our Ness mix As portfolio reducing the previous in weather our value strong both and of markets, related in support through portfolio diversify service we In maintaining regulatory third of a optimize offerings solutions. to

optimize more the do in combined work but us and are digital to have moving our expertise more to efficient and sales fully Square GRE channel territories brought leverage new well the right in We direction. make to operations Town marketing we to our

August joint working to end to working testing ramp third quarter business. for in month our acquired meter state populous formed towards supply efforts commercial plus done well to the operations great to family into start the offer a supply record commercial the this leverage has electricity service which customers acquisition market. have our the we goes long-term are Fort and is and Natural gas entrée Mirabito opportunity prepare a business Mirabito, and natural to acquisition We Florida, gas for if and and of in foothold. deregulated of we We're into addition market capital. friends Gas energy of up million small Mirabito and the residential In later markets of to UK $X spade nation's low into work the commercial profitable about supplier in August XXXX. the to launch. a data with Lauderdale we all represents the We meantime marketplace. venture way long plan first the build most Mirabito careful deal a risk retail In and the In optimistic

that both churn XXX,XXX for now and Net in rebuilt in customer to quarter are first we net. larger then. XX,XXX we base Square January we had Sequentially meters by increase XX,XXX where increased in counts. meters pleased gas new retail during less resulting ago polar celebrated The primarily the jump the the now by third adds highest XX,XXX Churn and served meter RCEs our quarter meter period year year The by ago time drove corresponding we XXX,XXX to base a X.X% and the our to the acquisition September acquisition same XXX,XXX XXth RCEs third since first have the to ago Energy The spike which to from nearly XXXX increased reported the up year-over-year Turning from of XX,XXX XXXX. February in gas X% meter the acquisitions. of our Back second quarter. meters compared are on XX,XXX RCEs count increased meters. the and the our our the point dip new added XX,XXX Mirabito year average to meter increases our gross Town and compared strong quarter added churn by customer over impact quarter. RCEs in in over the months customers customer than XXXX meters. results, the I'm monthly of through very XX% serving in the caused Mirabito and and RCE's enrolling vortex of meter RCEs reflect total churn year meters among to rates XXX,XXX nine meters include X.X% in of natural the XXX,XXX quarter increase additions in third throughout we've

certain discussed regulatory last quarter ahead New I changes anticipate Looking York. in we

The the In broader York our Ministry. temporary consumer evidentiary support an from regulatory energy and lead Federal enrolling industry energy or them stay energy moving Service impacting New order York changes the we the low remember any Public reexamination Guilds retail finalized you on may with to retail and the have PSE requires provider. is role business. state other of order other Commission prohibiting order markets the income can efforts As out. forward won Genie turn of response and customers meantime incoming the of customers by in until to competitive the contract filed out that hear energy PSE After their providers of were protect the with a significant a to upon suit industry an may utility over expiration action Panel to the markets income choice current income and low fuels low competitive In to to class denied, terms. of promote backup retail the residents continue New a Federal

outcome orders impact New In or up fact state in regulatory Nevertheless [ph] materially could forward. suit changes our the results wrap going PSE action subsequent our unfavorable in operations. To the York could exciting the hazard first this commercial our was quarter one strong including soft productive for Kingdom meters growth, of year. third the the organic later launch with developments and a United RCE a addition preparations and the meter cross in

with minimize regulatory and York forward the opportunities excited teams poised the business new XX, energy the landscape the the and Afek impact we goals. working a of our the I Board retail Genie New privilege management Genie's Officer and had yesterday And help confidence outstanding I the be Howard and abundant looking us. organization. honor named With want to for the working Ness exploit I'm to the to fully diligently us. our I achieve me, Energy. leading am at Genie thank of open Chief finally wildcard, While markets Executive shown to appreciate are Jonas in Board remains to I drilling in our to before to

Rochwarger results. discuss Now here's operational to the Afek Geoff

Geoffrey Rochwarger

progress began new Northern investors of well in and well begin In our the Northern the will the April in will of exploratory oil to in with area in also drilling help of rock overview up whether this of we sixth present previously program our each first Ness year quick Michael. get and you Southern This drilled in portion found the the on exploration portion Thank XX well Afek area the us program our wells a source of I hydrocarbon is any to is North. licensed Israel. determine the speed. of the licensed our five gas

in whether the licensed features other of expected of learn to portion matured in source the expect hydrocarbons. and area the also geologic northern correlate rock with increase fully the a We depth

updated Ness We were Northern we very a determine a migrated clay through preparing or XXX When to may drilling a any depth to put present within of to last been hydrocarbons the area formation. that of and I matured want and layer way it have had they stone sticky another the fully reached you that the that of rock thick XX plays meters. are resume likelihood whether or in have XXXX are heavy depth Our meters. are source target to

have our reached drilled since successfully depth. initial XXXX meters and call have We that last target approximately

of the a the in that likely area our presence we zones impact of call move operations XX. models adjusted could suggest early a processes on rock. and would significantly previous the through As significant now wells our exploration that depth and increase as of indicate this by of note that additional now drilling resource in the Meanwhile to current rate Atit the present projected. our drill XXXX source be real means On in meters. next the target in quarterly our This answers third depth preliminary bigger resource drilling calls zone, as down information of is in the optimistic to project models may parties are the Southern water from roughly was able our rock startup following new constantly originally March. completion results positive and will we result than incorporate depth flow services more as negotiating in employing any target to we matured some discussed drilling by that target Ness to layer managed am rock to of with of time the complete be than other clay portion based [ph] that the an I in further drilling extend our conditions the to source any the the is Israel position to a that be adjusting maturation provide we

a and Our proving assets competitors capabilities sources reach water. are strong associated seeks demand advantage cannot current continued to we upgrade be as match to Israel of new real drilling rig that from and provide which to

Chief Energy's Officer, the Goldin Avi results. financial quarter's Now Genie third Financial will review

Avi Goldin

of everyone for otherwise us XXXX, for I a seasonal attribute Except the sequential all for in energy to My thanks that this indicated will period cover year-over-year on remove quarters my three for prior results rather comparisons to and month third our call from September retail XXth. joining corresponding than business. consideration with Consistent the in in financial quarter ended morning. comparisons the focus to remarks the remarks period order Geoff XXXX. you the my fluctuations characterize comparisons on results our approach Thank in

over to drilling Genie highest and base venture, Retails million operational in was gross to have Not Square of generated the The accrued Energy's quarter that increased on our year Ness developments $XXX,XXX. $XX.X the increased acquisition an million, electric million $X.X and Square This fourth and growth XX%. from launch direct New marketing than sales by level the on increased significant revenues per in in new consumption. the by organic regulatory the revenue revenue, $XX.X meter while Israel Energy year increased primarily exploratory the Mirabito quarter in million. a the drum $XX.X highlighted pending meter $X.X Natural expense of electricity our result Town territories. We Retail Town XX% investment $XX.X from UK in including subsequent sales the gas increased more an by as of in million, in of of again served acquisition, in years and XX. Gas, pace and the related Natural per of we Genie in the of efforts meters year last increased during million all quarter million sales of $X.X the revenue Energy in Jersey. in ago revenue the for increased a million acquisition quarter cost the a profit. to $X.X customer matter following consumption decreased quarter of accrue reduced two average the Genie sold Electricity

in generated $X sales we increase. August Natural which acquired by $XXX,XXX the addition of In million Gas Mirabito accounted revenue

result $XX.X the sold of percentage in to gas from than on gas the by gross storage. increase natural profit as the hours margin The write gross increased increased $XX.X with third impacted covered ago electricity SG&A sales per was consolidate as to from increased than The XX% our our Although expanded year average sales on sold sale meter XX.X%, of price kilowatt was rapidly to on average costs gross expense more increased margin $XX.X a of and narrowed sales. decreased offset profit margin impact in million deduction $XX.X sale gross XX.X%, kilowatt hour $XX increased and per cost hour. percentage by quarter. electricity to the on base. gross million increase the from more to million of the gross natural the primarily million million increase kilowatt acquisitions significant electricity that gas margin Consolidated million million $XX.X and $X.X loss small to XX.X% increased downs in the that to year's Michael in remarks. associated quarter a sales Gross Recall customer percentage from last his in profit gross in from

has from operations spudded exploration to the year to from Genie the in third generated ago our quarter income capitalized $X.X quarter. million $X.X in income in $XX.X investment offset million decreased consulting of of area in Northern that second million costs guidance Genie to that Mirabito operations professional As million compared ago these all Retail $X.X accruals. adjusted EBITDA well attributed capitalized quarter common from we unchanged the year in to portion [ph] in annual compared exclusive the in we expense in expense, [ph] $XX.X end year in was Exploration of was accruals EBITDA million lower Through the yearly we with EBITDA are as Despite the was including in the the Kraval to compared increases the when in still year for $XX ex-operations energy impact million $X.X payroll of compared Genie wrote or $X.X stockholders quarters Mirabito million $XXX,XXX $X.X million to Southern Israel share matters for regulatory year expense first three fees. year of quarter the as retail the in to SG&A year to of had quarter. year. Afek licensed comfortable Genie million in million loss preferred the ago $XXX,XXX substantially the Afek incurred in Retail per million as [ph] Net in dividends quarter. ago Adjusted increase of off quarter. point. quarter year million after contributed adjusted legal increase Corporate a adjusted acquisition in quarter ago loss we third this to or ago and quarter million in of also we share exploration booked and XX. in of the $XX.X $X.X $X.X profit. and the of the this EBITDA and investment quarters from significant gross $X.XX more ago a the stock the $XXX,XXX compared non-controlling was than per Consolidated Ness third million $X.XX from interest net $XX $X

Our remains a of and equivalents, Board $XX.X this million. strong just $XX.X restricted a in capital debt Based on or $X.X $X.XXX share. in dividend and declared cash of with million our quarterly results balance stock net common of long-term financial and of Genie's sheet again Directors cash million cash, operating quarter

this was million, in the release the second between and the year. our million, for revenue first about second impacted error morning this raising by related to quarter the by As the the adjusted cumulative we year-to-date across financial million filed lowering identified income quarter statements an we timing error disclosed and periods solely the EBITDA no $X.X and $X totals. revenue $X.X impact The same earnings first net amount. by quarters on two of of and There the by revenue the in

the shortly. quarter to That process remarks third amended results. my them a XX-Qs expect comparing Form of on concludes are financial the effected We for file in period and

turn or Q&A. operational Geoff the financial questions call take be and will I I our results. Michael, to to for now will back Now your the on operator glad

Operator

Instructions]. [Operator

question go with from David Investments. GGH ahead. first Harrison comes Please Our

David Harrison

-- drilling any two it all and wondering that, taken that's absent you was the and have time drill, think you months [indiscernible] nothing on that and when of have going if is that for approximate I frame just on with we ago care more was when actually of the do Yes, you is or you information down actually not? good to information have might get on

Geoffrey Rochwarger

Sure, hi David.

we the as operations we months. approximately So have three suspended reported call for related last Afek [ph] did the

we I precipitated a As brought call a two to came over drilled light to expected so we last it or week the think that or we We We and until site. green mentioned additional the receive meters our meters we within as time week did. some which of thought ago. drilling did equipment about well, XXXX up in XXXX shy to us on just in which

are other We end and than week my we the indicate resuming that drill real is well drilling XXXX the as meters of this information I actual rather meters XXXX initial the comments target and in from depth the the cuttings time at said thought. now the that

several we to ongoing weeks take So, be drilling us to expect next complete. the and

David Harrison

very Okay, weeks. several Thank much. you

Michael Stein

You're welcome.

Operator

The Capital with next Aaron go Mountain Management. question ahead. Green comes Shafter from Please

Aaron Shafter

It is Great Mountain Capital Management.

Geoff on few a didn't questions your another First, answer and Afek of relate Ness all or about profitable quarter. are they like XX. weeks as there the end for catch that? I congratulations My probably something

Geoffrey Rochwarger

of we now approximately depth Yes, drill updated meters. we of XXXX approximately so additional last can equipment the drill to part some with XXXX answer our did was that my meters target

anticipate the equipment now might to let's to be first time that utilizing drilling that on understand issues. pressure other zone, of say in this amount the as depending managed better of end we as successfully have right barring the we the I can drill target those any what project obviously month, meters well So

Aaron Shafter

this that's the the depth reach you'll prediction? month, believe you current by your So of end target

Geoffrey Rochwarger

Everything my normal. rough else remaining projection. is That

Aaron Shafter

are Okay, level? through clay that interruption so you no assuming the like anything or

Geoffrey Rochwarger

five and level next with finish subsurface by are the which once finish that were We that we answered drilled. start once the we with clay is our meters news is clay the proximately question wells was level that deposit XXX which in we present through did is represented the our that to other see layers we

present want. of question and in was levels answered So not of to the any geologic was in instead the the wells seems large expected other not level clay addition that our we that that be

The we what at there can it a we we that news we that do originally hopefully is good deeper is confirm now that organics that see So maturation there are thought. need. right they'll be and had level than that is of

Aaron Shafter

organic any discovered you so have Okay, far?

Geoffrey Rochwarger

as what unearthed layers the No, not next successfully in hopefully have the that prior had several organics the be is wells. in weeks. coming we that have hydrocarbons And should any forward or

Aaron Shafter

alright, is Okay, you questions. Thank all luck. that my very Good much.

Geoffrey Rochwarger

you. Thank

Operator

comes ahead. question an from next investor. Please The Nicholas Kevin go

Kevin Nicholas

was some was don't wondering using the further of Hi, drilling Ness that assuming drilling means done get at just this further to wells arcade color or plan outside on operation XX, on to this I [ph] use of hoping you about any I rig that? drill more

Geoffrey Rochwarger

that in assets did had economic really drilling terms three money perspective of to which So prior suspended actually drilling purchase the using same fact that of months cost we we're XX, mentioned were the we this an to as Ness right assets. I helped saved acquire in the amount previously the us now well that us in just it about from us

other are is during companies have spoken a to drill as before and there, as perhaps a previously about demand that and Ness XX, drilling water sites drill I other one other subcontractor well as for our municipalities. well potential water XX hiatus are the mentioned companies we to other the water of at our different of use as several wells we finding assets Ness municipality of part private successfully did We

Kevin Nicholas

one guess on cleaning operation, for are not the for otherwise question to another I not I not portion more, drill that you suppose meaning well if equipment your company? using you or Northern in Thanks, planning did that you're was planning any

Geoffrey Rochwarger

looking that the short we prove hopefully is at well we no true are the there but there to that resource be for contemplated exploration are based commercial the XX and that license have at Ness point other looking on You a drills. we're know at of this wells that to

Kevin Nicholas

thank you. Great,

Operator

as will presentation. the this attending call. you well conference today's for as [Operator conclude question-and-answer our Thank session At this Instructions]. time

You disconnect. may now

Genie Energy (GNE) 4 Nov 172017 Q3 Earnings call transcript