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Matters

Spark Energy Sees Record Results, Reports Organic Growth

March 2, 2017

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

Spark Energy said that it saw record Adjusted EBITDA for the fourth quarter and year 2016.

For 2016, Spark reported record Adjusted EBITDA of $81.9 million, record Retail Gross Margin of $182.4 million, and record Net Income of $65.7 million. This compares to Adjusted EBITDA of $36.9 million, Retail Gross Margin of $113.6 million, and Net Income of $26.0 million for 2015, representing increases of 122%, 61%, and 153%, respectively.

Spark Energy was serving 774,000 RCEs as of December 31, 2016, versus 753,000 RCEs as of September 30, 2016 and 415,000 a year ago.

The net increase of 359,000 RCEs since December 31, 2015 reflects an 82% net growth due to acquisitions and 5% net growth due to organic additions

During 2016, Spark Energy added a gross of 681,000 RCEs, including a gross of 341,000 RCEs from Provider Power and Major Energy (121,000 RCEs from the acquisition of the Provider Power companies and 220,000 RCEs from the acquisition of the Major Energy companies).

Attrition was 322,000 RCEs during 2016.

Spark Energy said that it saw continued improvement in overall attrition to 4.3% for the year ended December 31, 2016, representing a reduction of approximately 16% year-over-year, versus the 5.1% attrition for 2015

Attrition was 4.8% for the quarter ending December 31, 2016

For the year ended December 31, 2016, Spark reported Adjusted EBITDA of $81.9 million compared to Adjusted EBITDA of $36.9 million for the year ended December 31, 2015. This increase of $45.0 million is primarily attributable to the previously reported acquisitions of Major Energy and Provider Power, partially offset by increased general and administrative expenses and customer acquisition costs.

For the year ended December 31, 2016, Spark reported Retail Gross Margin of $182.4 million compared to Retail Gross Margin of $113.6 million for the year ended December 31, 2015. This increase of $68.8 million is primarily attributable to the acquisitions of Major and Provider, expanded natural gas unit margins, and increased retail electricity and natural gas volumes. Favorable supply costs across several of the company's markets were a key driver of these elevated unit margins in 2016, Spark said

Net income for the year ended December 31, 2016 was $65.7 million compared to net income of $26.0 million for the year ended December 31, 2015.

For the quarter ended December 31, 2016, Spark reported Adjusted EBITDA of $24.8 million compared to Adjusted EBITDA of $16.3 million for the quarter ended December 31, 2015. This increase of $8.5 million is primarily attributable to the acquisitions of Major and Provider, partially offset by increased general and administrative expenses and customer acquisition costs.

For the quarter ended December 31, 2016, Spark reported Retail Gross Margin of $58.8 million compared to Retail Gross Margin of $34.4 million for the quarter ended December 31, 2015. This increase of $24.4 million is primarily attributable to the acquisitions of Major and Provider and increased retail electricity and natural gas volumes. Favorable supply costs across several of the company's markets were a key driver of these elevated unit margins in the fourth quarter.

Net income for the quarter ended December 31, 2016 was $24.1 million compared to net income of $3.1 million for the quarter ended December 31, 2015.

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