GNE - Earnings call transcript Q1 2021

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Operator

Good morning and welcome to Genie Energy’s First Quarter 2021 Earnings Call. [Operator Instructions] On this morning’s call, Michael Stein, Genie Energy’s Chief Executive Officer and Avi Goldin, Genie Energy’s Chief Financial Officer will discuss operational and financial results for the 3-month period ended March 31, 2021. 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 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. Genie Energy assumes no obligation, either to update any forward-looking statements that they have made or may make or to update the factors that may cause actual results to differ materially from those that they forecast.

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Michael Stein

our March first XXXX. quarter’s you, we dive financial for XXXX to ended Welcome X Genie quarter operator. the Financial Chief results follow discuss will with Energy’s financial a months our earnings will call. Goldin, operational Thank Avi Officer into and the Today, XX, deeper results.

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

of a In industry $XX reported prices The operations earnings, had events Texas, severe first negative has quarter was our the of storms quarter’s million. sheet avoiding liquidity, the quarter have in we to approximately winter and/or $XX.X of good Japan. income remain of we the by the strength wholesale borne last to balance Japan on the will that and led ongoing legislation at this share weather stronger changes commitment weather aggregate had discussed our ourselves disproportionate our from unusually in financial financial remains and massive regulatory in balance relief. events. debt, a of an litigation year the storm Texas hopeful where we despite the impact material burden. shape. while goal impacted Texas We million, Moreover, than when approximately impact impact sheet perspective quarter’s severe As spikes first and that start provide we Because was of in and electricity set with finishing the the

long-term capital first reached impact, record environment. international of Retail, achieved Genie ago will growth the meter to need these quarter slow business our expect increased added the with requirements capital underlying significantly and record the RCE spikes, growth. international our is are that mind, in strong. On put expand businesses But new in balancing to meters consolidated to consumption revenue perspective, near-term wholesale adjusted in investment ramped quarter by business achieved decline are review Texas historically Our remained With X,XXX per the with domestic for to to year. meter a dealt absent counts, a but all our carefully XXX,XXX in very Japan, the our base EBITDA would impact XXX,XXX. At is and customer GRE’s quarter for customer quarter across a basis, a and for storm’s acquisition. Scandinavia. increasing our gross of advantages and the strategic challenges generation we compared as to and extent that the increased first price margin pandemic most up of GRE our high in and business, the remains though of lesser we we continuing we during increased our International, XX,XXX and again have RCEs revenue year significantly the a that even Adjusted Sweden the despite maturing. by businesses our in to Japan subdued. for optimize notably markets, cash At storm’s likely to churn

to the We coming that have on to in more quarters. say expect

Genie Turning Renewables Services higher The improvements renewables segment, quarter, the Genie the the our solar-related we In our gross reflect margins. Energy prominence materially. focus Renewables. SG&A The to our the first margin our Genie have now it improved of decreased, businesses former rapid the increasing reflects renamed shift within market. and segment though of change decreased businesses even with Renewables while significantly, in revenue towards growth

solar of to those are solutions our the believe businesses of We shift the been we to segment’s a company, value of the chain. solutions. more be this trend had capture excited expand footprint that about year. a Across the not increase evaluating ahead, quarter. beginning the it for up, the two that the us of and are to emphasize commercial exceptionally results will profitability. Wrapping This Looking will and working opportunities geographic solar we to are have I integration vertical remainder continued challenging growth the winter terrific storms, for want of enable incredibly would been

business underlying Our strong. remains

customer its all-time peak. is at base global Our

units Our is increasingly in continued potential, in which evaluating tremendous multiple business promising while and opportunities the diversified growth developing growth. to are we with best invest

outlook, XXX,XXX quarter positive private transaction following shares we close. to the were nearly our in purchase pleased Given a

to have to paused we alternative continue dividend, return stockholders. we our our will to consider means value While

Avi results. review first I will call to the quarter’s over the to financial Now, turn

Avi Goldin

focusing seasonal XX, my call the ended Michael the to consideration the first morning. and compare factors comparisons, XXXX. the quarter to on X some for the are rather results this I cover for on you, business. our than sequential remarks joining of XXXX, Thank the removes My us of today everyone results remarks, months financial the Throughout of energy our first thanks year-over-year, XXXX quarter March characteristic that retail for

sheet per Energy the impact outstanding Uri. of Orbit Retail shift to sales million These as the similarly as and average result in business have increased had increased the factors to not well on revenue our UK and of liquidity our our storm Texas COVID-XX was and winter Electricity a the incurred Nevertheless, in XX% including would by $XX gas highest increased to natural stake from as and year International, As pandemic result winter extreme operations our weather per the weather, than management million. results. winter careful of through and more natural demand of the our Uri our revenue for diversification only the manage XX% the the been mentioned, Genie enable decreased in volatility, a to this it line forward growth both hedging not consolidation storm as and been Michael electricity $XX increased, and strong of initiatives. purchase its ago Consolidated quarter. meter in consumption in the The finish of Bottom of history. capital in $XXX to strong home gas. revenue work finance balance reflects Japan. $X a the predominantly Genie from for Energy compensated our boosted sufficient million and Retail joint programs, quarter results revenue Revenue in quarter to increase in the XXXX prioritize $XX but At unit during with million the us million. at to quarter losses venture colder fourth

$XX.X ago generated the Energy Orbit purposes, million quarter. in comparison revenue year in For

of entirely delivered profit estimate the winter customer Solar of quarter’s very and Energy. from impact except have loss million GRE’s a quarter million operations gross impacted increase. compared bases $X.X adjusted supply ago $X.X strong. and expansion income decrease operations results GRE, a contributed Orbit’s consolidation Japan to Genie a year a reflects $X.X primarily of the negative their quarter, SG&A At the $XX $XX Additionally, totaled decreased million. the from income year storm and to incurred million $X.X at International $XX.X year million from the operations $XX.X $XX.X of large consolidation in Scandinavia was million, business. million. million. been increase GRE to million impact panel The to decrease $X.X Renewables meaningfully million storms decreased million domestic Consolidated $X.X in to million. the weather EBITDA from for of was in by our that Absent Uri decreased in due gross approximately EBITDA Prism million from expense. decrease would from acquisition when Orbit the a We would together a have $XX.X to also in to Japan ago $XX.X compared solar Energy, million the in customer Texas, the from $XX.X of for winter of EBITDA UK order. Consolidated ago increased positive quarter, million the revenue and record Texas Consolidated to $XX.X the million. and Adjusted of revenue approximately $XX.X Adjusted the Texas including million, $XX.X $XX.X and million Orbit profit been bulk was

compared we At the $X.X shift results million to the pandemic the from $X.X per the seen ago consumption meter The result million in have first quarter home. a benefited was again of to from since from loss as operations increased GRE quarter. year work International,

balance $XXX,XXX million loss to XXXX a ago $XXX,XXX increased supply Solar primarily $X $X.X Renewables contributed For of Japan year storm by Genie year the operations from Prism in The the the our earlier. from deliveries. comparison reflected Orbit from increased in $X.X quarter generated Energy’s million. a purposes, margin approximately winter first operations was quarter, costs million, at gross In was X% The Lumo. primarily income decrease. panel

focusing Renewables. are As opportunities now within we Michael on mentioned, margin higher Genie

some XXXX’s XX%. per first ago loss was our to per the year compared as of Energy’s in The $X.XX $X.XX earnings margin share to gross diluted success quarter early quarter. share suggested Genie increased results

In million. million. was our million of at concludes discussion our Turning All-in-all, of opportunities. restricted underlying financial quarter cash, strong. our the prudently were standing capital our cash growth to good and XXXX, is marketable balance in strengthen to now financial totaled results. accelerate non-current liabilities business generation, $XX.X cash very my Working and sheet, order expect equity invest in end, That sheet $X.X we securities and balance is $XX.X the balance and

Now operator, back to you for Q&A.

Genie Energy (GNE) 8 May 212021 Q1 Earnings call transcript