Updated: Genie Energy CEO Discusses Texas Market Plans, Begins Customer Acquisition Activities In Texas
Genie Retail Energy Reports Customer Growth
Reports Second Quarter Results
August 5, 2019 Email This Story Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • firstname.lastname@example.org
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This story has been updated with additional details and data
Genie Energy Ltd. reported results for the second quarter of 2019
As of June 30, 2019, Genie Retail Energy (GRE) was serving 448,000 meters, versus 399,000 as of March 31, 2019 and 363,000 a year ago.
The net growth of 49,000 meters from March 31, 2019 to June 30, 2019 compares to net growth of 76,000 meters from December 31, 2018 to March 31, 2019
As of June 30, 2019, electric meters were 361,000 and natural gas meters were 87,000
Gross meter adds during the quarter totaled 91,000 compared to 57,000 in 2Q18
On an RCE basis, Genie Retail Energy was serving 357,000 RCEs as of June 30, 2019, versus 333,000 as of March 31, 2019 and 283,000 a year ago.
Average monthly average churn decreased to 4.4% from 5.3% in 1Q19 and 5.7% in 2Q18. Churn has been favorably impacted by the increasing proportion of fixed rate customers in GRE's portfolio as well as the addition of meters acquired in a municipal aggregation deal in 1Q19.
Following the quarter close, Genie Retail Energy (GRE) commenced customer acquisition activities in Texas' electricity market and obtained a license to operate in certain Michigan gas territories
Discussing the Texas market entry, Genie Energy CEO Michael Stein said that, as previously reported, the Texas launch began with friends and family, and said that the company will probably be starting full marketing and enrollment later this month
Stein said that, through the end of the year, Genie will be "cautious" in Texas and not try to bring on "tons and tons of customers" right away, but believes that the company will bring on at least a "few thousand" in customers in Texas over the next few months
Genie Retail Energy's loss from operations in 2Q19 was $5.4 million compared to income from operations of $4.1 million in 2Q18. Negative Adjusted EBITDA was $5.1 million compared to positive Adjusted EBITDA of $4.7 million in 2Q18. The decreases primarily reflect the impact of a generally weaker consumption and pricing environment in electricity and natural gas in the quarter, a marked to market loss on the forward hedge book and increased customer acquisition expense.
Genie Retail Energy gross profit was $8.2 million for the second quarter, versus $15.8 million a year ago
Genie Retail Energy's gross margin percentage was 15.1% for the second quarter, versus 28.3% a year ago
Genie Retail Energy revenue was $54.4 million for the second quarter, versus $55.9 million a year ago
For the Genie Energy Services (GES) segment, the loss from operations was $682,000 for the second quarter, compared to a loss from operations of $88,000 in 2Q18. GES' revenue increased to $3.7 million for the quarter from $557,000 in 2Q18, reflecting the impact of the Prism Solar acquisition in 4Q18
For the Genie Retail Energy International (GRE International) segment, the loss from operations increased to $1.6 million for the quarter, from a loss from operations of $53,000 in 2Q18. Negative Adjusted EBITDA was $1.9 million for the quarter compared to $597,000 in 2Q18. The increased losses reflect increased meter acquisition expense.
GRE International served 39,000 RCEs and 69,000 meters at June 30, 2019, compared to 33,000 RCEs and 55,000 meters as of March 31, 2019. The increases resulted primarily from organic growth at Orbit Energy in the U.K. and Lumo Energia in Finland. The total Genie Retail Energy customer data discussed above includes RCEs and meters acquired and served by Genie Energy's domestic and international retail energy provider businesses including operations at ventures and joint ventures in the U.K., Finland and Japan.