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Genie Energy Reports Highest Level Of Adjusted EBITDA For Any Second Quarter In Its History

August 6, 2020

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Copyright 2010-20
Reporting by Paul Ring •

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For the second quarter of 2020, Genie Energy Ltd. reported that consolidated income from operations improved to $2.7 million, compared to a loss from operations of $9.3 million a year ago.

Consolidated Adjusted EBITDA increased to $3.5 million for the second quarter of 2020, from negative Adjusted EBITDA of $9.1 million a year ago

Genie said that the second quarter represented the highest level of Adjusted EBITDA for any second quarter in its history.

Genie Energy consolidated gross profit was $19.5 million for the second quarter of 2020, versus $9.0 million a year ago.

Consolidated revenue was $76.1 for the second quarter of 2020, versus $61.0 million a year ago.

Genie Retail Energy (GRE)

At Genie Retail Energy (GRE), the company's segment for its U.S retail suppliers, Adjusted EBITDA for the second quarter of 2020 was $6.2 million, versus $(5.1) million a year ago. The year over year increase was driven by increased electricity consumption and improved gross margin, augmented by a decrease in customer acquisition expense.

Gross profit for GRE was $17.1 million for the second quarter, versus $8.2 million a year ago

GRE meters served at June 30, 2020 decreased to 374,000 from 384,000 at March 31, 2020 and 379,000 a year earlier. The decreases reflect a slower pace of gross meter additions, partially offset by a reduction in monthly customer churn.

Gross meters added during 2Q20 totaled 40,000 compared to 69,000 in 1Q20 and 91,000 in 2Q19. COVID-19-related public health restrictions reduced sales activity through certain channels in 2Q20.

On an RCE basis, GRE RCEs served at June 30, 2020 increased to 343,000 from 330,000 at March 31, 2020, and from 318,000 a year earlier. "The year over year and sequential increases reflect a sustained focus on the acquisition of higher consumption meters, increased residential electricity consumption due to warmer weather in 2Q20 compared to 2Q19 and COVID-19 'stay-at-home' orders," the company said

Average monthly customer churn decreased to 3.9% from 4.7% in 1Q20 and 4.4% in 2Q19, reflecting decreased sales activity by competitors as a result of COVID-19-related restrictions.

GRE revenue was $66.5 million in the second quarter, versus $54.4 million a year ago. The year over year gain was due to an increase in electricity revenue, which was driven by a 26% increase in consumption per meter and, to a lesser extent, the growth of GRE's electricity customer base, which more than offset a decrease in revenue per kilowatt-hour sold.

Genie said that it will be entering into various new territories, including Michigan and Georgia, and various utility service areas in states where it is already active

Genie Energy Services (GES)

Genie Energy Services (GES) comprises Diversegy, a commercial energy consulting business, Genie's interest in Prism Solar, a supplier of solar panels and solutions, and Genie Solar Energy.

GES' loss from operations was $1.1 million compared to a loss from operations of $0.7 million in 2Q19. The increase was attributable to a write-down of Prism Solar assets

GES' revenue increased to $4.6 million from $3.7 million reflecting increased revenue at Genie Solar Energy.

Additional Consolidated Results

Across all of its segments, Genie Energy Ltd.'s total meter count was 536,000 as of June 30, 2020, up from 532,000 as of March 31, 2020, and 448,000 a year ago.

Genie Energy Ltd.'s consolidated total RCE count was 421,000 RCEs versus 401,000 as of March 31, 2020 and 357,000 a year ago.

Genie said the consolidated customer growth was led by growth in its overseas markets

Other Highlights

At June 30, 2020, Genie Energy had $142.4 million in total assets, including $41.8 million in cash, cash equivalents and restricted cash. Liabilities totaled $59.8 million and working capital (current assets less current liabilities) totaled $49.1 million.

Cash provided by operating activities in 2Q20 was $16.4 million compared to cash used in operating activities of $3.1 million in 2Q19.

"Given our continued favorable outlook and strong cash generation in recent quarters and after increasing our quarterly dividend last quarter, we resumed repurchasing shares in the second quarter," Genie said

During the second quarter, Genie repurchased 200,873 shares of its Class B common stock for $1.5 million.

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