GNE - Earnings call transcript Q2 2019

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Operator

Good morning, and welcome to Genie Energy's Second Quarter 2019 Earnings Call. [Operator Instructions]. In this presentation, Genie Energy's management team will discuss financial and operational results for the 3-month period ended June 30, 2019. Any forward-looking statements made during this conference call, either in the prepared remarks or in the question-and-answer session, whether general or specific in nature, are subject to risks and uncertainties that may cause actual results to differ materially from those which the company anticipates. These risks and uncertainties include, but are not limited to, specific risks and uncertainties discussed in the 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

their provides Energy reference adjusted indicative useful of by both and being is may corporation information on EBITDA, that recorded. [Operator Genie X-K with excluding income, make Management Relations net Genie is or the has operating www.genie.com. including Instructions]. release, Energy's the core investors that of Genie be a Form non-GAAP Please page earnings to of measure. believes management may release certain Energy's remarks, a filed website, adjusted EBITDA which During Investor been segment's to SEC. on event available a adjusted reconciliation not The expenses EBITDA management the The to relevant this Genie note, the earnings is also results.

will I Please Stein. conference Mr. Stein, Michael ahead, go Executive to Energy's over Chief Genie Officer. turn now the

Michael Stein

to My Operator. focus our earnings the an operational Goldin, Avi business Officer, follow period of Thank and Financial for will call. XX, financial Welcome will will with discuss overview you, second our Energy's Today, financial and June ended results. operational X-month remarks results Genie today XXXX. we quarter strategy on results. our Chief our

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

near-term prospects our this While the short-term strong at remain was factors operational the I about very we the as expected, with and was quarter. pleased for financial underlying play, performance were long-term some results Overall, in the there quarter company. very as and not excited

in substantially, our our both and the grew in We base U.S. customer markets. international here

to and our continue diversify significantly risks our monthly mitigating rate. our revenues, we churn lowered business, to certain We further

going Texas that entered forward. quarter us a the after we a opportunity market largest great closed, affords country the the and electricity the market, Finally, in

increases, in Finland. RCEs RCEs X,XXX net This and the quarter, added XX,XXX maintaining made increasing meters including and net the significantly the primarily quarter-over-quarter. respectively, since as added internationally, in customer we the first successfully while a our internationally, meters, to shareholders. balance through new We've no XX,XXX and and well, now growth base U.K. debt very and we XXX,XXX representing XXX,XXX a organic U.S. diluting including sheet XX,XXX the with year, the in increased by XX,XXX strong added XX,XXX churn, of solid XX% our RCEs investment U.S. and XX% RCEs meters XX% without of as

Moreover, other and outside we our to legacy base providing our risks. geographies mitigate commodity, customer Mid-Atlantic continue footprint build in to region, the in further diversification of regulatory

took customer our only to second X.X% in function X.X% In and we ago of channel, customers, retention the a internal keeping churn, first quarter Not and improve to programs and we our longer. quarter, them big acquiring reducing reflects reduction out partly is from the in customer monthly our The customer bite are in are also our we more a quarter. reduction domestic rate diversification. The of X.X% systematically renewals. year churn product the

$X.X revenue. Services in Energy million Genie contributed

key revenue levels as of the substantial of subsidiary the are demand. majority orders that Our has total. capacity product. and our recognize finished We working year, will of robust a we the generated to inputs solution and generate second And half. and do Prism Prism Solar uncertainty pipeline revenue the increasing half chain, deliver sufficient manufacturing second of I through the we in profitability obtain expect GES in meet supply to despite

as to the the lot meter But growth comment I I greater and our weather a lower commodity mix turn lost further a meter commodity share hedges. was operationally, result over our investment quarter, treatment of our want in on So mild growth, shifting line mark-to-market of like before financial quarter, reduced accounting forward organic customer largely results. consumption, that and churn. a We to the by there second our in to highlighted $X.XX this spring a bottom impact Avi, call of

quarter. Our just significantly roughly domestic expense year the we quarter XX,XXX increased acquisition when increased the meter as adds year added XX,XXX from compared in meters to this net we XX,XXX getting were customer underway. we to gross quarter internationally, ago ago And

is months generates decreased a seasons. part which as the the a X.X%. compared as within spring growing Electricity This heating year gas to our felt causing exceptionally was in rate This levels book, lowest national consumption of typically levels the meter is domestic weather between the profit decrease peak of year, and of per the the well consumption. and per comprised it significant consumption quarter second portfolio. overall effect meter that more year quarter, the is fall the fixed meter The of cooling gross since X.X% strongly lowest consumption of fell ago mild, peak

resulting line. which dropped Additionally, market reductions commodity our hedge decrease natural a against and forward hedges. quarter, resulted a margin moved gas prices, in $X.X in our we our the million as bottom straight The mark-to-market our decrease electricity commodity that reported in in prices gross both wholesale in saw value to position of fell, this

impact mark-to-market this expectations. quarter every of quarter, While second is within is the cumulative these on results of Adjusting our items, its affect in range particularly for movements impact quarter significant.

results, Chief Avi Now here financial with Goldin. Officer, on this Financial more is quarter's our

Avi Goldin

this today remarks, I second quarter months X morning. you, Michael, the financial quarter results XXXX XX. our the on to and XXXX. the for results June Throughout Thank to my remarks ended joining will everyone second compare the thanks of cover for call My us

are business. from the on of sequential year-over-year Focusing our retail that than rather energy characteristic the comparison removes seasonal factors consideration

between in that quarter. and Typically, falls mix in As and including seasons quarter Michael quarter. the natural impacted heating per has was cooling the the any shift the of factors, the weaker-than-expected meter of and sales the second the electricity number weakest the and the a for book financial by underlying activity, gas weakness discussed, demand peak of cyclical quarter a normal performance of second higher volumes exacerbated

the Consolidated million from revenue in to $XX.X million. quarter second $XX increased

$X.X quarter growth fourth million the to by acquisition top contributions Our largely million, year. revenue of driven year the from and of and quarter of Energia ago $XX.X reflects Genie line $X.X the driven the $XX.X GRE the Services million acquisition Lumo Prism revenue first in in International International Solar decreased by quarter. last Services Genie increased from from Energy Energy Genie Genie and contributed of respectively. million in

$XX.X served offset increase in an million consumption by meters decrease per that in spring to caused electric increased $XX.X mild million, Michael sales from earlier. the as mentioned weather the Electricity meter

rules, more meter therm sales to electricity in on natural sales, at and in from declined. the and quarter cost our market than which decrease decrease required which a offset the of per falling by operating of in gross meters generated including generally gas mark-to-market number Despite natural increase second gas accounting served a was decreased, resulted to our revenue weaker GRE loss million. consolidated $X.X declined consumption Gas to loss in hedge million $X approximately the forward million. the However, and and sold of $X.X side The per profit million was $XX.X increasing from mark Under a felt consolidated where electricity all unrealized revenue, entirely the to $X.X we're factors, book. hedges, the a consumption value environment a on impact we of million.

during International. was The $XX.X expense activity from increased SG&A to from million. increase added million. We $XX,XXX. increased meters XX,XXX added Consolidated GRE to million the largely and Genie gross quarter International, year $XX.X increases Genie compared increased ago at domestically period. $X.X customer in million GRE to SG&A $XX.X XX,XXX to At SG&A the result of million $XX.X This the at from

we which net the XXXX. Orbit results, in in loss to our Atid, in but million equity $XXX,XXX $X.X method report Equity quarter compared Energy, predominantly the to stake second use the of debentures minority also was in

$X.X from loss ago million $X.X increased quarter. operations consolidated in the Our to year from million

million. expense positive GRE negative Adjusted Genie of GRE EBITDA The in customer at $X.X changes at margin International. EBITDA reflect million to gross and increased the primarily acquisition was $X.X reduction and compared

to share the ago share loss in year quarter. was Our compared per a per loss of $X.XX $X.XX

assets, $XX.X million. million. totaled Our balance XX, recorded million total capital, we in Liabilities in $XXX.X working June million $XX.X cash, cash. assets, strong. including At totaled sheet And plus remained $XX.X restricted and liabilities current equivalents cash current

impact quarterly by mild they Supported our again The well contributed and opportunities. increased reduced the line outlook, wrap driving financial common period that new of second the spring this on market spending our margins stock our meter year. of consumption augmented narrowed and growth acquisition, lowest our positive to consumption year, difficult share. are for further is margins. quarter, in our our to dividend of To and by forward-looking was of half, This characteristically on a Board Nevertheless, results. a a $X.XXX declared the compressed we up, we'll market second quarter weather believe operating focus continue the customer Directors environment results bottom positioned per

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

Operator

Great our Mountain. And Shafter Aaron Instructions]. first comes [Operator from of question

Aaron Shafter

strong though to First, is quarter that noticed Can market did had release had quarter. going said the earnings tell you you anything think enter Texas I your, last you And I about how Texas you far? recall had If call, a the the past so this what at and conference is hoped quarter. market the congratulations -- for that us ended. after I you on in correctly,

Michael Stein

Yes, thanks Aaron. for the question,

days behind as schedule, of later start that. XX don't did result little than material We're hoping. we bit any so a but or a we So about I were impact expect

customers or system on The the family friends working to make the bringing always so enrollment to properly. and applications and testing a was make months first and billing kinds sure be supposed sure of X they're we're

to the cautious enrollments believe month, probably We on we're But on this a that few later or X sometime full months. end try at months customers first be customers X -- full right the tons bringing think the and away. least be that should we through starting year, over next the do tons bring and to thousand will be We going months of first few marketing. we're to not of meaning going I

Aaron Shafter

to a Okay. related Afek. question And

suspended, could only but give us that is when And equipment. to on when and testing the begin awaiting equipment, still it -- On only that that you conference equipment you'd release received was testing the permitting. permits, thought just expect out you information you says you're latest testing I if holdup if the the call, testing. you the the the flesh expect last indicated necessary had

Avi Goldin

Thanks, Aaron. Avi. This is

it's an correct. primarily is this Your equipment-related recollection At point, delay.

of to looks And sometime the of going it's end in so be the right the it like now, towards sort year. more

Aaron Shafter

Can you that? more more be any specific than

Avi Goldin

quarter. mid-fourth it call Let's

Operator

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

You may now disconnect.

Genie Energy (GNE) 5 Aug 192019 Q2 Earnings call transcript