GNE - Earnings call transcript Q4 2018

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Operator

Good morning, and welcome to Genie Energy's Fourth Quarter and Full Year 2018 Earnings Call. All participants will be in listen-only mode [Operator Instructions]. In its presentation, Genie Energy's management team will discuss financial and operational results for the three and twelve month period ending December 31, 2018. Any forward-looking statements made during this conference call, either in the prepared remarks or in the Q&A session, whether general or specific in nature, are subject to risks and uncertainties that may cause actual results to differ materially from those that the company anticipates. These risks and uncertainties include, but are not limited to, specific risks and uncertainties discussed in its reports that Genie Energy files periodically with the SEC. actual obligation made update to forecast. or factors may no that forward-looking update assumes materially that have differ they may cause Energy either that any to statements the from Genie those to they results make or

Please the these provides reference adjusted The on today's useful will by both been EBITDA has be relevant and Relations page is earnings Genie I management on to to not may event that information income, ahead. Genie questions. this of is release indicative results. ask note including EBITDA, that a SEC. Stein, Genie recorded. Energy's After or Genie excluding make Michael X-K the is the filed Management [Operator turn Officer. core investors Energy's with Chief non-GAAP to of The measure. believes being presentation Please management to segment's Executive certain the by may an Energy Energy's a opportunity like there Energy's Genie operating remarks, reconciliation to www.genie.com. go which available also release, earnings Instructions] be During to Genie Investor a conference now Form adjusted expenses website, of EBITDA management would Corporation the over adjusted net

Michael Stein

twelve Today Financial follow an recent and Thank financial you, operational Avi focus our three our discuss and on well will will results. we our call. results. as will periods with more full Chief our business XXXX, operator. My developments. for operational XX, earnings of today remarks as overview the Goldin, Welcome to financial strategy Officer XXXX Genie and Energy's ended fourth year and results December quarter months

take we remarks, glad be Avi's Following your questions. to will

our not our business, expanding and of grow business mitigate to intended overseas these efforts diversifying our During commodity we are and new good the in and to regulatory quarter, into and only of retail U.S. revenue. sources geographies the risk. progress, but made to also fourth subsequent Both

XX commercial is based international enrolled retail Scandinavian meter me Lumo revving fast a of we that in plus to Let deregulated to meters the eventually is pursue approval Orbit acquisition market. the of expansion on close in Energia, begin the Lumo continued winning operations good our in stake by million January, Finland. supplier Helsinki-based throughout in In effort. year meter last electricity you renewable growing engine. expansion its our Great households earlier in positioned quarter. on Orbit Finland acquisition pace begin and a Energy, updating at fourth After full Britain up to London operates JV a majority

partially during expansion was Japan. Japanese is includes year. there businesses electricity. retail program for XX acquired XXXX and market huge; purchasing full for is operate began to in set customers a in XXXX Japan Our The year deregulation over also and in small million customers billion The license international homeowners a We this next Japan in $XX year. and enrolling deregulated opportunity potential

initiatives, we overseas already of retail We end by are meters have the three potential. Through XX,XXX the extremely acquired about these excited international February.

strengthen consumption in our certain customer to Turning domestic XXXX and acquisition narrowed our our program to scope the respond sheet. now of acquire to retail regulatory developments business, and unfavorable balance energy supply reduced domestic higher in diversify we states meters, to geographically,

the customer of we XXXX. end XX, RCEs a at of December year, compared XX,XXX result, a XXX,XXX served the As decrease to

XXXX. in Looking domestic for meter are ahead, positioned we growth well

first two XXXX, In we U.S. in increase an seen have the enrollment months in the of already pace meter fact, of

over market our current to territories, country's into retail residential by up Texas Texas acquisitions our and within and base providers. served meter deregulated are enter customers currently new is independent ramping customer electricity largest that expanding energy grow We expect commercial million to continue and X the this utility markets year. to by

an tailored putting a are there acquisition program and specifically license to obtained the have We together local markets.

this We the Texas internationally, begin year. feel our U.S. Between of expected worldwide. meters the acquiring can served during confident to and expected to XXX,XXX second growth in quarter we meters return that in we total approximately

commercial and Also Energy during supply the growth Scandinavia including to Great Diversegy's As Genie of expect outsized potential. majority through advisory are in to compared Texas we well panels we $XXX,XXX Energy services in are businesses business not mentioned continues with based acquisitions at I in our this quarter a up, half Division, part adding are a way contribute fourth year to to bifacial its say and Services in of and Britain, Services at retail stake the of Reflective energy utility Energy I quarters. meter York increased the energy and Services of revenue Those quarter. million XXXX To financially in that grow can clip. in Genie which initiatives energy we some $X our Domestically, accomplishing to the Genie have fourth the supply within diversify acquisition solutions the out sources wrap our Technologies, term by are outset, in We and our this investing our that first the healthy Solar long-term our Diversegy, seeking in quarter. internationally, in One part growth manufacturer division. both build during fits we offer is now and market that by of to Japan. entering revenue. New coming strategy to Prism about more new are Prism growth, will the near return acquired of a in ago prospects solar business territories, retail held high-efficiency in investment the year. to Prism company our in initiatives

We Genie Diversegy the and Energy potential Prism, Services. businesses about excited the are also other of within

Genie's is financial here CFO, Now and results, Avi to full quarter Goldin. fourth discuss the year

Avi Goldin

My financial results on cover Michael, the Thank December thanks for joining this to morning. quarter fourth today the three the XXXX, month periods us full year XX. you, and everyone and remarks twelve ended for and call

note to GES, Prism like following are segment, the Diversegy our quarter that business. we would segment a of I in acquisition which solar begin, disclosure. now Genie our we Energy Services modified quarter, be will I or importing fourth and this business the Before of new have with Beginning Solar comprised our brokerage

falling cooling year $XX.X increased in a full detailed that the remarks. I the the season XX% reporting and consumption of peak pending season quarter outcome the work are Atid third of the in revenue in are shortly million from focusing on the to fourth year-over-year XXXX largely our sequential of comparisons, fourth reflects to comprised removes the quarter Gas however, $XXX.X results do characteristic factors Afek quarter the million. quarters' fourth remarks, Michael served Throughout The decrease of as million. heating at peak minority rather some from Typically segment we retail than [ph] XXXX Full million position his of are $XX.X Additionally, year-over-year will quarter fourth the decline was that our by Oil average compare the the two hoping our energy to we $XXX.X Genie as the to comparison my revenue, & the in Afek, drilling. business. reasons and to first is driven meter of quarters, between low seasonal as in consideration decreased well one of year the Consolidated quarter. that

Gross fourth Both to primarily expense reduction pending Consolidated was in in million the $X.X fourth electricity operations served in sold $XXX,XXX expense nil to for For meters average reduced in year well decreased $XX.X the the Exploration quarter Afek $X.X quarter. both of from increase quarter year quarter year-ago decrease million an commodities. issuance $XX.X as expense. a primarily expenses, per in gross SG&A year $XX.X consumption the Revenue $XX.X million. electricity to to as million the permits. hour from average as meters $X decreased compared in decreases The $XX.X suspended impactful declined from meter full that meter test quarter in $XX.X to $XX.X in quarter acquisition profit year expense in exploration less SG&A kilowatt both XXXX, fourth $XXX,XXX, expense in $XX.X to at million was per of the unit decline decreased is at compared well $X.X and increased million That gas and the ago million was the outpaced from exploration million Full per ago. cost in reflected profit and was the to Full decline to expenses. wrote GES Also million. increases and in served offset revenue revenue the compared corporate in off million. sold. the million. by year fourth year million XXXX. natural Full reflected exploration capitalized we expense quarter

$XXX,XXX conclusion to in our and work continue the year using UK the which the equity versus the method, take quarter. program of in We in the work XXXX. $X.X ago account our the half expect was namely the Energy towards Losses we first drilling place for million to in Israel well ventures, Orbit Venture of company and in

For $XXX,XXX the XXXX. to full in compared the million $X.X equity year totaled loss

to retail expect As we our as I energy build venture investing joint international well to we as other mentioned business supply as quarter, there. energy the UK continue look in last our suppliers

for the consolidated in expense contributed the year the offset in quarter, of $X.X EBITDA of compared in the energy investments. for to quarter compared Diluted and compared $X.XX the million of and quarter to in strategic partially strong compared two the from Genie benefited operations XXXX. quarter margin year $X.X income share of consumption XXXX, $XXX,XXX adjusted compared to EBITDA loss in a the totaled in resultant [ph] not Full The international Energy in a year quarter. a served of income focus from environment XXXX. in adjusted cost. our we per operations to year fourth and Full meters of million the EPS Our XXXX. exploration quarter of adjusted including consolidated meter $XX.X was of $X.X a the fourth operations gross replicated These quarter $XX.X Retail the and EBITDA in result reduction in of In a million quarter. $X.X our and was in year, $X.X was loss million related overhead. Overall that full by $X.XX a acquisition on the year-ago $XXX,XXX negative narrowing to the loss ago to reduction reflected $X.X reflecting retail in decline million from million of commodity positive factors from million operations decision ago million are as pricing rise the business totaled reduction expense. fourth a

evaluation of allowance tax of the The asset taxes outlook $X.X removal from on release of a from the of quarter. taxes income valuation benefited spending the for ago to in is year for allowance a million we gas a quarter, million the benefit This by $XX.X and reduction in the in driven exploration and which company. compared generated profitable deferred oil provision

cash the positive $XX.X results a declared stock this $XX.X dividend our operating facility. our of We capital balance up again $XX.X fourth million outlined other XXXX. and our cash common XXXX. million share. At in Our strong in and December By quarter, financial this $X.XX of in year remarks current reported restricted cash results, by million reported a Supported minimum Board on wrap working and to million. quarter in and as of and current cash capital our our financial review To of and $XX.X Michael in our no sheet and draw equivalents debt we cash, remains of earlier of assets executed quarterly XX strategic less well a credit the comparison than that way equivalents take opportunities in the of restricted as cash, a outlook, advantage are we planned strong. liabilities well his expansion Directors positioned capped working

the to Q&A. turn I'll back operator the call Now for

Operator

Please Markets. question [Operator Instructions] Mike The ahead. go with Noble Heim you. comes first from Thank Capital today

Michael Heim

kind the in tax change repeat year this the you instead of and for charge rates Avi, about gain of [indiscernible] would the last Thanks. you made comments why the year? the

Avi Goldin

released we a on I asset. tax the allowance so Sure, deferred valuation mentioned as

asset years to engaged the were going allowance and was a position on number company questions and So there when be that business of that oil while generating a losses was where basis able we consolidated in actively a use in essentially gas an on it. to for the you're

it So the as balance as reduction. sits a result, basically a sheet on

forward and international is your at a what business a basically outlook. projections your looks profitable You reduction the the do an spend with on basis evaluation in current that for recurring that are activity, in

to deferred asset when P&L. use and to the that close to release you're when that allowance going that question the of of make to you changes be valuation So able tax

Michael Heim

only That question. Okay. makes sense. That's my

Operator

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

Aaron Shafter

Hi, quarter strong in or Few giving now congrats plans one, earnings? to on another year. start any guidance as there strong to the questions, are future

Avi Goldin

At the to current plans not we do moment, give have guidance.

we but in this U.S. continued one some profitable, business invest. to we acquired The to the year, can will expect we business. know, we year, be investing other as we expect of of believe You this we think is the strongly thing one two, and I international but in profitability we be did of the the sure be

Aaron Shafter

correctly, to speak not going? that was how integration I wondering Finland International Lumo operation sure the you - if I'm the of could was pronouncing speaking Okay. of the is I'm Energia I if

Michael Stein

points So out management followed kudos and practices a got on ensuring auditing in people and are policies few The the definitely team in people the came risk good integration front right procedures the after here sent far, over place, so few transaction a it, are it's away, really the track. main here are of that good and there. to good. after right definitely Shortly transaction, being shortly of

Aaron Shafter

both characterize your as can worse you UK. And expected? that wondering than It's versus And in expectations? expected, if better expected? that going you going about you than and numbers Japan say, Is could spoke if the enrollments I'm is

Michael Stein

UK the say the expected. in would - terms say, business, In of going I would expected. I I customer they're - the would enrollment, as as business mostly Yes, definitely UK say

for. with were working to margin, there modeling kind that possible excellent get we of in hoping What In of vendors an doing handling of we're the the those business. sort terms of job we for need we're expected is hard the to has it's terms make-up were little is, we that the a than lower to to And our payment more that Initially, team into ensure infuse best limit cash for. negotiations. done

the you So that started to at just we on. Japan, not cetera. perspectives team, reporting, to perspective building from time a the acquisition we if think customer live enrollment can definitely leaner definitely terms initially customer the that's - least going building gross as early and operations were tell better; market, we earlier with et In profit on getting margins, planned, in we too of

Aaron Shafter

and finally optimism finish last And year. call the end possibly Afek, in regarding Okay. the receive of the last and the the the you'd that in year able to November, permit expressed test both be by you

I'm Is Or at you reason permit. the we're of you're explain delay? beginning the have wondering the can what the bureaucracy, if type the haven't just and problems into? for do of running still you Here March, And it gotten it? the fighting that you environmentalists is why

Michael Stein

this Yes, obvious so - yes. is

we're it the in a require And we've reason just say it is the before, of think waiting, getting cross what we bit. or a that that's to said the there's it It's boundary, to bit the large delay. for we do going there within some going timeline correct, reduce know have little operations stay But more is a very now, sort shifted we that we time is fundamentally close been able a that to what way we're sort I short reasonably cost and we happen direct I to also is and look that sort equipment be timeline so while from timeline I So we the and of is the a not the as little fair is to frame. bit going to such done material before. for not of confidence, that to of us but a shifted had bit a a little of bureaucracy anything to - of And the the are you have then part appreciate in past. what little said

Aaron Shafter

more specific timeframe correct? of half year, is your that? than this So, that Getting the is first

Michael Stein

No.

Aaron Shafter

That's fair my Okay, all enough. questions.

Michael Stein

Thanks.

Operator

question ahead. Markets. next The Instructions] a [Operator Capital Noble follow-up Michael with go Please from Heim is

Michael Heim

Thanks.

procedural a Just quick question.

the assuming that the Orbits include service. is be numbers question as Orbit Japan that said will equity will and the you when I guess lumped You treated retail and counts, Finland I'm into in do method or not is, retail? meter

Michael Stein

So, real quick.

retail So the mentioned to in There's expect Orbit to Japan that's their within you already Orbit, and within we energy meter the for equity a as numbers and retail there fourth piece small do the method, Finland actually quarter. are energy. include of

that numbers it included So out, in release is the meter number. press Orbit just our in if you the fourth at put quarter that we knows look

Michael Heim

That really my was Okay. question. Thanks.

Operator

concludes session our presentation. you [Operator question-and-answer today's conference Instructions] our call. and attending This for Thank

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Genie Energy (GNE) 7 Mar 192018 Q4 Earnings call transcript