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Genie Retail Energy Sees Higher Earnings, Reports Customer Growth

November 5, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com

Genie Retail Energy, the parent of IDT Energy among other brands, saw higher earnings during the third quarter of 2015, and continued to record net customer growth

Genie Retail Energy was serving 388,000 meters as of September 30, 2015, versus 377,000 meters as of June 30, 2015 and 362,000 meters a year ago.

The net growth of 11,000 meters since June 30, 2015 compares to net growth of 19,000 meters from March 31, 2015 to June 30, 2015

Genie Retail Energy added 74,000 gross meters during 3Q15 compared to 79,000 meters in 2Q15 and 56,000 meters in 3Q14

As of June 30, 2015, Genie Retail Energy was serving 261,000 electric meters and 127,000 natural gas meters

On a Residential Customer Equivalent basis, Genie Retail Energy was serving 260,000 RCEs as of September 30, 2015, versus 251,000 RCEs as of June 30, 2015 and 248,000 RCEs a year ago

Genie Retail Energy’s average monthly customer churn increased to 6.7% in 3Q15 from 6.3% in 2Q15 and 6.2% in 3Q14. The increase in churn reflects, in part, the accelerated pace of meter acquisitions in recent quarters. On average, newly acquired meters exhibit higher rates of churn than long tenured meters and variable rate meters churn more quickly than fixed rate meters. Meters acquired through the new sales channel also typically exhibit high initial churn rates. Meters enrolled in fixed rate offerings constituted approximately 15% of GRE’s electric load at September 30, 2015.

Genie Retail Energy generated Adjusted EBITDA of $8.7 million in 3Q15 compared to $5.8 million in the year ago quarter. The increase primarily reflects the improvement in gross profit on electricity sales resulting from the increase in Genie Retail Energy’s electric meter base and kWh sold.

Genie Retail Energy’s quarterly revenue increased $6.1 million year over year to $52.2 million. The increase was entirely attributable to increased sales of electricity, which totaled $49.4 million, an increase of $6.9 million compared to the year ago quarter. Sales of natural gas decreased $0.5 million to $2.2 million. The increase in electric revenue was driven both by a 13.6% increase in kWh sold and a 2.3% increase in revenue per kWh sold. The increase in kWh sold reflects increases in the average numbers of meters served during the quarter compared to the year ago quarter and in consumption per meter. The per meter consumption increase reflects the warmer summer of 2015 compared to 2014, and meter acquisition efforts targeted to regions with relatively higher per meter consumption.

Genie Retail Energy’s gross margin in 3Q15 climbed to 41.8% from 38.6% in the year ago quarter. The primary driver was increased gross margin on electricity sales as a result of a decrease in the commodity cost which was partially offset by lower gas margins due to a market-wide decline in rates and losses on natural gas hedges.

Genie Retail Energy gross profit for the quarter ending September 30, 2015 was $21.8 million, up from $17.8 million a year ago

Genie Retail Energy’s SG&A expense in 3Q15 increased $1.1 million year over year to $13.3 million reflecting increases in customer acquisition costs and payroll and utility related expenses.

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