Genie Retail Energy To Enter New Markets, "Exploring An Opportunity In Georgia"
Notes Risks From Coronavirus
Records Goodwill Impairment Related To Prism Solar, Parts Ways With Prism CEO
March 10, 2020 Email This Story Copyright 2010-20 EnergyChoiceMatters.com
Reporting by Paul Ring • firstname.lastname@example.org
The following story is brought free of charge to readers byEC Infosystems, the exclusive EDI provider of EnergyChoiceMatters.com
Genie Energy Ltd. during an earnings call today discussed new markets for its U.S. retail energy supplier business organized under the Genie Retail Energy (GRE) segment
Genie said that it expects to enter certain natural gas territories in Michigan early this year, and will expand its brand presence in Connecticut.
"We are exploring an opportunity in Georgia," said Michael Stein, CEO of Genie Energy
The domestic Genie Retail Energy was serving 370,000 meters as of December 31, 2019, versus 389,000 as of September 30, 2019, and 315,000 a year ago. The decrease versus September 30, 2019, "largely reflects seasonal factors that typically inhibit customer acquisition during the fourth quarter," the company said. The year-over-year growth, "reflect[s] sustained investment in new customer acquisitions during the year," the company said
On an RCE basis, Genie Retail Energy was serving 309,000 RCEs as of December 31, 2019, versus 329,000 as of September 30, 2019, and 253,000 a year ago
Executives said that gross meter additions have picked up so far in Q1 2020
Genie Retail Energy gross meters added during 4Q19 totaled 56,000 compared to 76,000 in 3Q19 and 45,000 in 4Q18. For the full year 2019, gross meter acquisitions in 2019 increased to 308,000, from 197,000 in 2018, including the impact of a municipal aggregation deal which added approximately 35,000 meters.
Genie Retail Energy's average monthly churn was 6.1%, an increase from 5.3% in 3Q19, and a decrease from 7.1% in 4Q18. For the full year 2019, average monthly churn decreased to 5.3% from 6.5% in 2018
Genie Retail Energy income from operations in 4Q19 increased to $8.2 million from $3.4 million in the year-ago quarter, driven by increased electricity consumption and a decrease in the commodity cost of electricity. Full-year 2019 GRE income from operations decreased to $27.2 million from $29.0 million a year ago, as the increase in gross profit generated primarily by higher per-meter electricity consumption was more than offset by increased customer acquisition expense.
Genie Retail Energy gross profit was $22.0 million in 4Q19, versus $14.5 million a year ago
Genie Retail Energy revenue was $74.0 million in 4Q19, versus $58.8 million a year ago. Electricity revenue in 4Q19 increased to $61.2 million from $46.7 million in the year-ago period, reflecting the increase in meters and RCEs served as well as increases in consumption per-meter and revenue per kilowatt-hour sold.
SG&A expense in 4Q19 increased to $13.8 million from $11.2 million a year ago. The increase resulted primarily from increased investment in new customer acquisitions and, to a lesser extent, the reversal of an accrual related to legal expenses in the fourth quarter of 2018.
The Genie Energy Services (GES) segment, which is comprised of broker Diversegy, Genie's interest in Prism Solar, and Genie Solar Energy, reported a loss from operations in 4Q19 of $1.2 million, versus a loss of $0.6 million a year ago. Genie Energy Services revenue in 4Q19 decreased to $2.1 million, from $4.0 million a year ago, due to the timing of orders and deliveries within the Prism Solar business.
Genie said that Diversegy became net income positive in the fourth quarter of 2019.
Genie said that it has begun streamlining the Prism Solar operations after the business had not met its targets. Genie has parted ways with the CEO of Prism Solar. For the fourth quarter of 2019, Genie recorded an impairment of goodwill of $0.4 million related to Prism Solar, due to Prism Solar not performing as expected
Genie Retail Energy International (GRE International) reported a loss from operations of $3.2 million in 4Q19, versus a loss of $0.7 million a year ago, reflecting the timing of capital contributions, the impact from the acquisition of Lumo Energia, and launch of Genie Japan earlier in the year.
Genie Retail Energy International customers served as of December 31, 2019 increased to 65,000 RCEs and 127,000 meters, compared to 55,000 RCEs and 103,000 meters as of September 30, 2019, and 4,000 RCEs and 8,000 meters as of December 31, 2018.
Genie Retail Energy International, which is currently active in Finland, expects to launch an additional Scandinavian market in 2020.
Globally, Genie Energy was serving 497,000 meters as of December 31, 2019, up from 492,000 as of September 30, 2019
Globally, Genie Energy was serving 374,000 RCEs as of December 31, 2019, versus 384,000 as of September 30, 2019
On a consolidated basis, Genie Energy reported Adjusted EBITDA of $0.8 million for the fourth quarter of 2019, compared to negative Adjusted EBITDA of $0.6 million a year ago
During the fourth quarter, Genie repurchased 261,722 shares of Class B common stock bringing the full year 2019 purchases to 731,869 shares, approximately 2.7% of all common shares outstanding, for $5.6 million.
During an earnings call, Genie executives said that the company has not yet seen any material impact from the coronavirus on the company's activities thus far in 2020. However, noting that the situation could change, executives said that the company has included in its 10-K a few business-related risks due to coronavirus, one of which would potentially be a slow-down in door-to-door sales. The 10-K had not been filed yet as of publication time.