GNE - Earnings call transcript Q2 2020

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Operator

Good evening, and welcome to Genie Energy’s Second Quarter 2020 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] In its presentation, Genie Energy’s management team will discuss operational and financial results for the three months period ended June 30, 2020. 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 the company anticipates. These risks and uncertainties include, but are not limited to, specific risks and uncertainties discussed in the report 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

will this Genie is ask questions. Officer. Please their note opportunity Stein. pro management, being results nearest Mr. Retail reference and and adjusted a release includes the Relations pro International there to to EBITDA been results Energy today’s Genie Energy the Management both of non-GAAP forma measures. pro Genie International’s forma the to Michael and with by Instructions] www.genie.com conference may The International provide EBITDA both income income release a Please from believes make recorded. Energy Energy’s will the the pro Energy Retail an investors filed and [Operator reconciliation measures. Energy’s useful Genie over management adjusted the Chief Executive Energy’s revenue of segment, Investor and be Retail and segment’s presentation information forma GAAP management measure results. earnings Genie now core After that Retail adjusted I on has operating on to that earnings operation EBITDA remarks, Form and Energy During supplement Energy net Genie Genie page Corporation website, to posted forma X-K comparable turn SEC. or of The Genie of event the International Genie Stein, go is ahead, Genie to are

Michael Stein

our the second Genie to quarter XX, will Today, earnings XXXX. ended June results three for Welcome financial we and XXXX operator. you, operational call. months Energy’s Thank discuss

our results. into my a remarks quarter’s our financial will Financial indicators. key and performance quarters, operational Avi the As with deeper on focus dive results Chief will Goldin, Officer, prior in follow

generated will quarter were RCEs and the at solid glad adjusted questions. results XX% retail Genie businesses joint sequentially with Globally, sequentially despite our quarter. COVID-XX Genie we increases very of those second provider energy generated level reach RCEs growth XX,XXX and expansion domestic Retail and be X,XXX remarks, our the the the difficult to compared to Orbit much ago impacted of The financial and your year in in history by revenue Energy driven which Following both well performed added in by Avi’s also Global any markets. our year-over-year venture of challenges UK. XX,XXX to XX,XXX international Operationally, served XXX,XXX. meters International, served XXX,XXX our highest the company’s of including increased environment. businesses, year-over-year the take EBITDA in improved Energy meters to of our

on with aspects quarter. meters, in acquiring by consumption Genie to Energy in a electric the robust compared XXX,XXX decrease the second-half than impact. relative from key the warmer Domestic work year-over-year U.S., year-over-year sustained the XX% several and serve declined financial GRE’s of higher The to These of increase RCEs year-over-year meters RCEs per-meter sequentially XXX,XXX. business combined average reflect Retail has mixed and the added focus year XX,XXX quarter RCEs. our to X,XXX weather to COVID-XX factors served COVID-XX-driven home. sequentially ago in pandemic to and impacted shift The operations XX,XXX XX,XXX domestic meters the Here to in increase consumption reach by

benefited increased residential, so predominantly rather offices. is as than demand for homes we base customer from work from Our customers electricity the their

as acquisition public in combat were we providers, March our On programs customer suspended COVID-XX. the implemented other hand, like measures other health retail face-to-face to

year the prior the adds gross meter quarter XX,XXX this result, quarter decreased from in XX,XXX in XX,XXX quarter. a ago and to As from

customer intense are first two GRE’s customer growing have positive the expense tend GRE’s from significantly. on impacts, short-term adds higher the and of meter decline quarter. rates both base to partly acquisition because has That’s meter churn in we the the While churn long-term, in decreased customers. quarter churn have customers new rate decreased X.X% second in rates X.X% than over to longer-tenured

churn to rates face-to-face competitors’ expect But would customer not we also our So programs, a of fall COVID-XX see our addition programs. pace effectively after the eliminates meter acquisition own halted also but slows. driver. churn key gross This just

markets, expect to We’ll Looking our to utility territories. rebound quarter. beginning the ahead sales in entering have be in allows some also to see health ease a we in face-to-face third us resume meter begun modest at Public marketing. some which GRE, of acquisition restrictions and new

XX, time, International. a increased of Also, our to close RCEs customer very global solid Genie Swedish XX% EBITDA successfully break-even. RCEs. for GRE XX,XXX. pleased is nearly Services, year-over-year now meters. diversify sequentially Scandinavia market At meters and UK, Energy each served XX,XXX increased supply there. retail this year-over-year sequentially enter quarter, made of progress June Genie and adjusted overseas acquiring the of to we Retail to XX,XXX held diversity the Meters I’m our positive global Energy leveraged expertise and to customers while by XX% XXX,XXX the generated numerous began our we and base. quarter, year-over-year in Japan. Solar to record At the served first International Genie our and X,XXX XX,XXX Turning generating to and had growth platform markets, We by

the our But of the I adjusted test of test COVID-XX span final provide quarter, EBITDA. completion we the to reluctant operations, GOGAS, as At results. income an we execution get to not restriction when been to but had new of business had of XXX,XXX the for As timeframe visa, [indiscernible] GES an on refining team of again control. from an more Because our a to when essential model outside have in an Solar’s at last will to update closely of site. we not Prism a our you able of depends asset current related impacting the discuss drilling OPEC member third the technical write-down I for align quarter I’m with recorded mentioned environment. quarter second postpone are impairment business well offer factors

a A Before to job again our working are that, line growing our and them. quarter, the last our big to turning enhancing rate. the second while shares continued And results favorable to dividend and the highlight in an want thank business dividend all raising to continuing given resumed cash outlook our you that Genie also quarters repurchasing bottom outstanding call quarter, after out did to Avi, significantly generation the at team strong in the I recent shout and pay increased big from home. our we

our financial Genie’s here Now, to Goldin, CFO, is results. discuss Avi

Avi Goldin

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

Focusing by after comparison on business. impact Keep removes by months and peak air third of consideration the in driven factors the rather the quarter peak characterized with year-over-year the second energy some Results electric that season first are is gas before low in that seasonal July side consumption. business conditioning minimal heating to and our typically in consumption the quarter relatively sequential than the mind retail energy August. the quarter’s

quarter’s financial to year second results in quarter. ago the comparison particularly The strong, were

the performance recall, would within then last weather heavily company the second period, has As since rebound has EBITDA. the was mark-to-market express level year our XX-month you may mild the its impacted hedge book. and and quarter consolidated business We of by achieved that operating a adjusted In highest income that and of justified confidence. our confidence trailing

while increasing churn of operating and resulted gross slowing As the additions. in consumption Michael pandemic discussed, decreasing electricity COVID-XX the meter has mixed impacts, pace

the helped In addition, in volatility in decline consumption. increase our price has markets power industrial in overall residential consumption mitigate the despite commercial

increased during to at million Genie the ago Genie from quarter At to Lumo million than the million. decrease in nearly increased for modest by Genie more from electricity year from acquisition commodity noted as environments ago quarter have the was million. increase at year per-meter all accounted meters, tend electricity growth and to a million in Energy, Consolidated million, resulting revenue work kilowatt to of model. consumption sales higher sold. powered Retail hour by from $XX increased residential the our As favor by residential we of Overseas $XX.X increased Scandinavia offsetting Electricity business warmer Energy of XX% revenue consumption, general and than The revenue $XX.X COVID-XX. second meter-based reflecting Retail the to Electricity consumption price Japan. transition revenue predictable $XX.X $X part home by higher in quarter, increased increase. per International, weather customers before, $X.X consumption the

Energy, its results release, our and discussed results operations account As the for profit. or method, the earnings joint Orbit operating venture using UK gross in in we our consolidated the of equity our not revenue are of

loss Orbit ago of Energy compared the we that in a amount During $X.X of Orbit in of capital, million $XXX,XXX net year an additional a quarter, the of with resulting loss to quarter. provided net

in Our Genie quarter doubled Energy Services million increasing $XX.X by more to the $X.X from million. year by than Consolidated gross the $XX.X second million. quarter, $XXX,XXX to ago division profit increased revenue

loss weak noted and in difficult environment on forward opening, The quarter was book. in a I my year consumption ago. had a we As operating hedge our mark-to-market low

from operations, $X.XX $X.X which GRE loss consolidated $X.XX year million expense benefited our to consumption spend GRE’s negative The strong of helped $XX and net operations from reduced our diluted rebound a per XX.X% quarter. at equity Genie year the in and and improvement million is us per SG&A quarter. was meter by helped the ago net ago. acquisition consolidated year in method consolidated the EBITDA from ago levels we reflects $X.X at was share positive ago $X.X $X.X in million to million. expense the the a to to from share Energy margin million quarter. million reduce to This $X.X gross $XX of a a in Earnings compared investees in drive per share loss XX.X% year million loss of in quarter, $X.X of to rebounded equity customer margin Retail decrease million per income compared Adjusted The acquisition compared

cash, in that to million of returned well support of in in cash in book. that as in unwind part change in working cash the year-over-year quarter $XX.X the June cash activities $XX.X quarter XXXX. of posted was swing in and cash to balance the used Our flexibility. collateral in of of second compared XXXX equivalents operating in This restricted we quarter sheet provided large hedge the was quarter $X.X the Cash is and to by the provide us of was had $XX.X activities the income, attributable as capital with continues million, operating million. At first million strategic second XX, second

be As Michael our returning we about continue mentioned, shareholders. diligent to to value

repurchased Genie on period financial the the we discussion results To our we per various million. post customer bottom of over second of stock acquisition challenges reduction significantly keyed in common improvement environment the to quarter, $X.X and improving results. Class meter concludes my electricity B financial ago. for met year-over-year This shares quarter, strong line of in same wrap Strong a the a XXX,XXX up, of year our substantial consumption spend That COVID-XX results.

Q&A. to back operator, you for Now,

Operator

begin is Mountain Capital first Aaron ahead. go from Management. [Operator question Please now the Instructions] Great line will the Shafter Our We question-and-answer of session. from

Aaron Shafter

QX was Not over it the Hi, some of built XXXX, another this you a but of in vast set you which congratulations on only year company. improvement yet for records QX can quarter. on strong

market So Genie stock recognize results is now year gone last strong to the year, quarter bad a that you showing do underpriced? that the expect from you’ve

Michael Stein

we wait We good in going comes diligent boost. Hi, little from what’s way. opportunity good But a reacts. the our market and bit a we’ve wishes and you we’re Aaron, happen know should we for be if how – in we’ll previous this And quarter, in repurchasing as thanks we’ll We discussed the quarters, market. think to see the as don’t of again. really and get to hear did

Aaron Shafter

Okay.

repurchase did an if repurchases? see than you opportunity, can we shares. more So you more XXX,XXX And expect

Michael Stein

We try be to about strategic it.

depends So the quarter. it price we think on where and we are all in the

Aaron Shafter

I territories going which you call, going you’re the into go entering? – new Can be during that entering some territories. And to mentioned some new you’re specify, Okay. to was

Michael Stein

have those We like and the not But and pretty that that have are customers operate we the specify. where the we operating. we mentioned already get and where prefer to in, utility yet in we’ll start close. going among to to are going And Michigan in we’re too. we bunch hadn’t there I’d licensed then keep two start past a been states there, had territories of states that within to Georgia,

Aaron Shafter

wells. hear until the and correctly about we next And – results? that Did XX Okay. finally, we’re you’re update get the OPEC quarter reporting then another won’t I third

Michael Stein

I’m then. hoping have an yes, But update update want just have I’m I hoping an we’ll we’ll – to… before

Aaron Shafter

Okay.

Michael Stein

thought …set expectations. all were do to the past thought We close. we we really in were quarter. going place. We be visas the test to had We this able

And Israel we a get able be that, be we to as as about has We… one weeks a soon all we’re get then an because should to place quarantine missing able were we So environment. and going COVID the and to and in visas should worker. all got he weren’t we that’s essential COVID able that. – in the of approval, for get for few to the – We a visa get

Aaron Shafter

Okay.

Michael Stein

get the until …we just approval. wait we

Aaron Shafter

just two weeks I go. gets Is understand one quarantine, then Do understand on ready waiting correctly? should for the and the and correctly? be we’re So that visa I in you he worker to what that

Michael Stein

Yes. That’s are we hoping, that’s told. we’ve been what what

Aaron Shafter

Okay.

So open certain up by least air country week to new – the announced the at corona countries, two. calling that next whatever them in travel Zohar, they’re or and wants the Israel from to

I All So guess, right. can we only hope.

Michael Stein

All only we can right, hope…

Aaron Shafter

for That’s great my again on and quarter. again another answering Thanks it. congratulations questions

Michael Stein

All Take care. a lot. right. Thanks

Operator

for call. Instructions] [Operator our concludes session This today’s Thank and presentation. Q&A conference you attending

Genie Energy (GNE) 7 Aug 202020 Q2 Earnings call transcript