GNE - Earnings call transcript Q4 2021

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Operator

Good day and welcome to Genie Energy's Fourth Quarter and Full Year 2021 Earnings Call. All participants will be in a listen-only mode. [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 three and 12-month periods ended December 31st, 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. 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 reference adjusted useful that both reconciliation and non-GAAP income may information a EBITDA, consolidated Energy's Genie measures, presented. measure Energy for supplement make that earnings investors Management to to believes Genie Energy's management Genie nearest of adjusted all core remarks, a operating its includes During EBITDA to results. The consolidated measure. adjusted release net EBITDA from periods of comparable GAAP income, and management operations

the segment's Genie In periods Relations on for website, addition X-K and adjusted earnings for Energy page segments Corporation genie.com ahead being EBITDA on SEC. been respective from is an Michael Energy's Instructions] Officer. event Genie this over there After has the presented. of now income Please all applicable the note conference The go are questions. Chief is management, by their release to with filed posted turn Genie ask opportunity Please to today's operations Genie I [Operator Investor Form the Mr. will presentation recorded. Stein. to Stein a reconciled will be Executive Energy's

Michael Stein

results, will overview we a through a brief quarter Chief fourth dive fourth by will take Officer then XXXX Thank our results, glad a Today our opportunities Energy's then will financial questions. Welcome deeper to and Goldin, full quarter your year be you go Genie provide our of into to operator. earnings call. business Financial and discussion I Avi followed of and

UK the of the operations management classifying moves the last of winter weather well orderly sale which These discontinued, February. During our include factors anomalies plus led impact complicated as XXXX, Uri withdrawal our some business from Japanese UK our market, our to financial statements. and some as storm portfolio as

businesses will we a grew these X% on XX-K information website year provide how the result, that after basis view expanded be posted pro by investors performed investor presentation by well to during comparisons. we and our factors, existing of a forma our have points give of as As historically to will Despite revenue next gross week in our future the for the margin as XXX XX.X%. filing

offer the and quarter for our We to owns of within finished In reduces before a opportunities that to with our as portfolio assets the energy balance geographically attractive our as both in XXXX. many outlook also quickly profile, while our strongest offerings I year results providing Energy And upside risk investment meantime, and we saw our opportunity sheet Genie QX. going fourth diversification our space. by warrant the strategy D.C. opportunistically into in review offering businesses expanding I'm years. new and grow existing In for has our a in Energy into our installed services generate conditions. deregulated is our Genie demonstrated and states This Washington market the variety conditions products market share of a taking XX plus to U.S. XX mid-to-long-term Asset-light resilient currently states to operates short, Retail business and business of in base. when cash go or to states, GRE in ability additional

a in steps are did we take which is not also shorter and conditions market favorable, horizon, slow fourth times quarter. as to over at will We growth when time protect the margins what

next XX handful affords become business few into Currently total the to improving International more expand profitable countries, that market Our the term is European an years. a margins. million in Finland with has potential than to Sweden. addressable second this Genie Longer growth meters operates business other business over the bringing emerging business Retail and Energy of opportunity this

business Renewables entree can into provides outsized opportunities multiple Genie to Our lead growth. that

refocused improve panel XXXX solar projects on operations manufacturing. rather than During our margins, to we

quarter, we initiative returns, chain provide strong to meaningfully contribute rate adjusted We we our to project to increase growth. discussed believe Now, are balance new and through as financial leveraging will move last finance. the attractive top more line the up this sheet projects pursue EBITDA win on solar value opportunities and

higher-margin Moving focus position commodity our us customers. to to our strong operations was our financial allowing sales in gains led fourth and quarter a to and on results, GRE positions which marketing mark-to-market on

down strong customers business, customers. the had As being saw contract, gross we jump growth gross off of total sales domestic EBITDA we compared from to revenue customers a Similar, in and some and and aggregation to margin. of relative with quarter our margin, our to fourth gains came revenue were a XX% and were and higher-margin despite gross able to low-margin benefit a our prices profit, quarter on GREI particularly as and positioned mark-to-market municipal served significant energy focus marketing adjusted favorably XX% XXXX.

Renewables energy prices, strong position a us consolidation to XX%, a from generated XX%, advantage our Genie in the increase volatility the our quarter. by revenue customer gross margin of profit given ago gross Additionally, increases and financial grew XX% to base. take small of allowed year all opportunity significant by

expect are we While their revenues projects these significant as and numbers revenue were of growth constructed improvements and continued solar profit more realized. are year-over-year, gross

the volatility, confident strong. continued prices Russia's high our Ukraine first despite will keeps the and the that of be invasion XXXX, management to strongest quarter Looking us energy

sheet sales and positioning our risk Renewables over allow begin base XXXX increase constructed is us decisions monitor tailor reinvesting mid-term $XX million to our and also in a will our continue to Currently under XXXX, than Scandinavia. growth. which marketing in political more situation customer in XX the U.S. Genie Solar The revenue. install completed and current if in strong and for and the revenue, to to the contract the the position a management financial generate retail and will strong of is for season Genie periods of grow activities and our short combination environment. winter for We very balance megawatts tremendous approximately

XXXX. Beyond strong this of pipeline have contracted win we that to new business, contracts in we a potential hope

involved building These we systems, with assets attractive in financing have have and electricity for yield become commercial scale these to solar our that of us could activities provide addition flows own cash In to years the generation projects. potential community come. the to

cash think approach that with note million we segment year on the overall XXXX we the position. strong comprise expect the triple XXXX We businesses, finished projects high coming its for Diversegy the $XX to and Renewables, two In such summary, to with have CityCom approximately revenue. entities share a progress about quarters. In our revenue of more in could Solar the that Genie other a together

We have Winter continue both repositioned and to fully Storm to recovered generate cash. from Uri portfolio our and growth business

and operations a we which stock our of is balance As sheet, the dividend, result currently yielding nearly common strength recently resumed X%. in

time, will We our time stock for begin quarter. second during we to May. and also results in announced today, your anticipate early for our an the Thank I authorization over which preferred sharing QX to buyback you forward look

over his discussion our Avi QX to Goldin Now financial of for results.

Avi Goldin

factors our on for December to and Thank fourth on fourth remarks quarter's business. you of everyone today XX, Retail remove I that the characteristic Michael, cover compare to three months XXXX the results. of quarterly Energy results us morning. and the our When XXXX a joining thanks ended fourth are the the this focus for quarter from XXXX with to My the quarter financial the seasonal of XX results, discussing call consideration

operations During quarter, all remarks. reflected my the in assets and current are retail Kingdom's completed our from Energy results, filings withdrawal in for fourth Orbit market. United discontinued as and we of historical Operating the presented and periods energy liabilities our

Our delivered to in to an Full-year to million. associated as valuations business rising hedges, gross profit as $XXX.X to and well environment. quarter was $X.X increase reflecting profit million customer to benefited kilowatt $X.X electric compared as as sold Gross $X.X took GRE, million the inherent $XX.X $XX.X $XX.X increased XX.X% customer forward profit At the and power XX.X% fourth revenue cash exceptionally served. full margins in growth climbed by of GREI year expense gains consolidated referred the in to quarter kilowatt year gross to exposure Energy Renewables well of towards renewables increased our in gross which ago in increased increased in X.X% Consolidated in to million. revenue price us GRE, primarily decreased million. generation, increase strong decline supply led million, increased XX.X% year year mark-to-market marketplace, and to services $XX.X GRE, the of revenue increased a XXXX increased to increased certain of for segments. increase electricity SG&A increased that in model, EBITDA gross sales ago low increased meter at to reflecting million. enabled profit $X.X X.X% quarter hedges, share $XXX.X a consolidated May increased and of prudent quarter expense consolidated where SG&A adjusted prices increase meters profit expense Retail expense Genie GREI a decrease margin our by profit base business strong by of in X.X% the than profit both Genie prior our decline of average and our customer $XX.X a to per gross spending. second climbed million, XX.X% driven commodity hour with At consolidated the consumption served to highlighted This XX% on to primarily fourth continued of increased margin focus mark-to-market XXX.X% partially GRE, led XXXX risk-managed as as The as million. while per more million hedges consumption from GREI, our higher Revenue slight panel Consolidated increased respectively. margin early Japan both revenue At $X.X profit, profitability revenue, The the SG&A million of other quarter. to year business we from for to At consolidated financial strong, to full as a the at increased per $XX.X our to XX% revenue Genie per revenue decreased meters the million growth focused XX% XX.X% results Genie certain while to profit million, sales. near-term sold. X.X% $XXX.X energy X.X% revenue of revenue gross the the per hour our well the $XX.X to a maintaining X.X% gross primarily acquisition markets the by generated quarter. reflect Renewables in million, in increased Full million, in the Renewables from electric by supply drove reflecting customer strength meter million. decision number million. declined Full forward of to Fourth Gross in the base, million. offset to our $XX.X $XXX,XXX. to performance and year reflecting Japan compared in to At strategies. to place growth and Genie sale by of SG&A $XX.X GRE pivot away sale GREI, GREI second X.X% where increased decreased GRE primarily gross were and half gains year fourth increased as $XX.X result driven offset XXX% Michael electric by reducing earnings Genie quarter XX% strong to million. and as by profit revenue volatility and factors year and an which XXXX. International were changes value $XX.X

a of ago to At fourth by on consolidated hedges. million. quarter margins million Japan in while The its reflected $XX,XXX. quarter. from from climbed fourth strong adjusted respectively, continued $X.X operations forward $XX.X million electricity operations top from to contribution. EBITDA income EBITDA while $X.X income $X.X $X.X from profitability, gross to operations and loss the to line in and year $X.X GRE, from quadrupled income increasing million operations Our GREI increased and from quarter $X.X to sales. from propelled profit trimming $XXX,XXX million increased quarter, million And in loss operations million electricity sale to adjusted million the increased ago toward EBITDA of $XX.X the At from the adjusted the of $XXX,XXX Renewables the year Genie valuations mark-to-market its gains Genie by our

Genie $XX the $XX.X of shutdown-related contributed Absent sale a those in was million adjusted For compared by $XX.X Texas, EPS approximately million. to XXXX by losses $XX.X Gas incurred Genie year in May from to in includes XXXX $X.XX income full adjusted earlier. year. of million operations Storm Diluted and prior that the Japan $X.XX Uri the operations were have consolidated expenses operations figure EBITDA year, net would to impact totaled its during and continuing million. items, Winter incurred million in the $X.X year from $XXX,XXX Oil Note, additional and been $X.XX compared an EBITDA for $X.XX XXXX. Discontinued in of

Turning reflected up, risk be half quarter the robust careful marketable approach expect Working reflecting liabilities scope million focused of and totaled and capital Subsequent balance of to million the both ahead. securities quarter's management cash, in non-current sheet. first strong in from year was XX, quarter, the XXXX margins progress now exit second restricted to fourth to drove and the results in build were This million. end and At will cash To by $XX.X reduced UK related December orderly on million. current totaled and just the our balance $XX.X to $XXX.X we the liabilities operations of that cash wrap $X.X the sheet. our market. to

our has shareholders. value our balance to Our cash and and to sheet stronger business strategic never return expand provides and debt no been balance flexibility

operator, you Now back for to Q&A.

Operator

live. begin question Mountain session. is for line Instructions] from Great now the with will We Management. Your Shafter Aaron Aaron, question-and-answer your coming is today Capital first [Operator

Aaron Shafter

or you A any division. you a buybacks. And ago, – share or kind to preferred issued can numbers Thanks, you over buybacks. conditions, intend be those especially if to you announcing you Operator. were and shares the international buyback dividend expect strong amount certain time shed on Any quarter, preferred your that the on press resuming upon just release the were light preferred on month all that a Do How Congratulations can you some that that you going from of go? on schedule? a depending specifically? doing the I'm light any shed share wondering, to

Michael Stein

Aaron, us opportunity buyback Hi, the Board preferred authorized Obviously, per for change always up worth Yes, to $X words. and of the support kind to the million the quarter. to thanks did is yet, minds so Board stop the their staged preferred. either point time. process. or that at in back to to current buy increase any that, it of doing the We authorization But not any has

I in plan the one the starting earnings or second remarks quarter. can't mentioned that, our – think release in we remember of that on we in that buyback

Aaron Shafter

All strong your wondering right. cash And And your an there during prepared the remarks, besides been looking and strong, you opportunities, in stated of sheet cash for holdings. possibility flow new balance has your extremely is especially any dividend? the very increase I'm is

Michael Stein

only approve just the just a So reinstated we ago. few dividend did dividend, weeks

next talking don't early to it that always as we I be about next quarter But So, going we'll that, and I'm it sure, change when revisiting up envision and meet. again, – quarter that's to the we're right away. as Board,

Aaron Shafter

as related you get have but really see call and some video see the you're – not like in what we us doing type don't finally, look – where financially considered you to of when you see we but speaking. And you

like Zoom a one-way Zoom or Something or call something a call?

Michael Stein

for good to happy like idea. a that. do We'll it We're calls. consider future It's something

Aaron Shafter

good Thanks Okay. All and luck. right.

Michael Stein

Thanks, Aaron.

Operator

Lustig your Jason J. is with is line live. from question next for today Your coming Goldman. Jason,

Jason Lustig

you Great I I the backlog. Michael. bit? I mean, execution talked renewables Avi. about the you Hey, backlog in And already. how the and little cadence of you little just I throughout the off it talk job. Can heard million talk bit a Hey, the year? in a that you growth – in revenue that Nice about think I heard of quarter. think burns Can the about have backlog $XX

Michael Stein

or the project. the we executing milestone Then and the revenue the only to actually revenue renewables that is plan to a and sale way -- to in go mostly revenue as contract the build the permitting customer in say of follows. phases way certain trajectory with array. business So recognize we the is works recognition We for from solar as the portions build. planning complete let's on start We

XX I remarks referring in in that in million customers we a $XX So about we XXXX. about revenue came we in agreement stages in to is have build megawatts my with when various was what to said, backlog to I of XXXX, that. now And an are

more We depending revenue comes are second quarter in quarter, it's various of process stages third quarter more of is that really more quarter, just building or first When exactly those. fourth how the able to the But those are should be in on that construct up. revenue we to able number too we hold to many projects time that get to construct into factors assuming now. lines expect whether

Jason Lustig

me And these projects? the great. gross and of you can Okay, understand of profile margin kinds SG&A help

Michael Stein

Sure.

what renewables the quarter, is think I salespeople, forward. see into to something goods. around can which project SG&A mid-XXs of goes for going the saw all So because the margin we is fourth mostly was the of cost in of in that building expect gross we

Jason Lustig

Okay. community And Talk some about bit you but earlier about I a of step longer alluded segment. about a you solar then we that a I term plans some the of little talk take the as back, within financing well. talk -- of guess bit can the some think projects can to if and little the this you

that out and achieve Just into want to the to as years the future. think hoping the growth perhaps understand we profile better even various you're several opportunities

Michael Stein

Yeah.

one Number And up we're bit have or follow of those value to parts two solar with solar what projects of three as in locking as Community do in to do and Solar. permitting community solar sites the we when we're the engineering in little to sites, looking where planning build is to So lock can in a Community really related is community that Solar parts proposition. what maybe community already looking and the we or in we've jurisdictions. we incentives favorable lock well we done

solar involved on side we an our of when of we're find acquisition puts some to solar solar, the a those Solar. the the most the development number self-finance projects, of line by ones Community that customer requirements. array need probably to then is, they field. Number actively business, think to community we'll So Community customers the generated of return consume And in side we're up with want developer the three, two Solar the in energy because are

business, of a looking kind gas. and It's and our to core for our for that's we're So for customers easy offtakers Solar. looking electricity business of us Community that be for natural be fit the to customers very

three the we I in. we're will are parts our think Community bring those we're participate So progressing we of it's it Solar on over way -- And value time. think and

Jason Lustig

just the digging then And results a Okay. into bit. little

call, But quarter the the GRE comment sequentially. between quarter led the about that were that I you it you had call at thought in to that customer On the little change? what you think I happened forgot third I would on said. I and expected or bit but up a think Can acquisition end have down been then back you side, the talk that made SG&A the ticked the of given that in the pulling quarter, time

Avi Goldin

Avi. for So Thanks this question. the is

growth well seeing some we pre-COVID within fourth to accelerate our So putting And just kind channel in have field more difficulty started of in channels, acquisition as where the we of we're given the where channels. other challenging well. a some can. been the get speaking, more to to as had to quarter, is broadly money the some customers environment, commercial back try the as within into of But little customer our relative in we still bit

to you the calculated acquire So try the to sales it's was the now accelerate than what it quarter pre-COVID more the customers. in decision fourth a activity expensive with little right in environment understanding was that saw to a

Jason Lustig

Got it.

in reconcile RCEs? spend with the decline then in can Okay. And tick-up you that

Avi Goldin

Yes.

of that RCEs fourth strategic that that customers aggregation of decline large renew. So move quarter deal as to are decision within certain baskets in segments both alluded to customer we of overall profitable as onetime Those remarks. the the a as the off, is aren't well function in to the allow kind not

add. where opportunity think work that the good structured said, doing we've take little a and to margin And growing be we'll a very where comfortable well, again. as see position we take So, there's base approach, the add margins that put side base to look knowing let portfolio other we customers we'll in in to opportunity capital with the we we're bit, situations on shrink to a the to as back

Jason Lustig

aggregation rolled that How customers were Right. in That sense. the off? there makes many quarter

Michael Stein

in Somewhere the of neighborhood XX,XXX customers.

Jason Lustig

end the there And also remaining on right. guess All sit UK. lastly and exit items the Okay. just as remaining today today, items as or What are we exiting? from of then, guess to I here but I what quarter

Michael Stein

The in currently UK. in company administration is the

-- aren't doing new best aside to administration speed parent the to We any as that for related administrators working soon exit and the -- whatever things possible. it close exiting in to that order costs progress up can is to try as as the Genie as out. with just incurring that is We're we not make to like

Jason Lustig

for Okay. the much Thank you, time. Nice job. very

Michael Stein

Thank you, Jason.

Avi Goldin

Jason. Thank you,

Operator

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

now You disconnect. may

Genie Energy (GNE) 10 Mar 222021 Q4 Earnings call transcript