Genie Retail Energy Reports Record Gross Profit, Adjusted EBITDA
March 10, 2022 Email This Story Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • firstname.lastname@example.org
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In reporting fourth quarter and full year earnings, Genie Energy reported that its international retail supplier in Scandinavia undertook a small acquisition in the fourth quarter
"During the second half of the year, this market [Scandinavia] began to consolidate as higher energy prices decreased the number of market participants. We took advantage of these conditions with a small acquisition in the fourth quarter and will continue to put our balance sheet to work should additional opportunities arise," Genie Energy reported
Genie Energy did not report further details concerning the acquisition. Genie Energy said that it would file its 10-K shortly.
Although the impact of the acquisition on the data is not clear, Genie Retail - International (GREI) served 67,000 meters as of Q4 2021, flat versus Q3 2021.
In Genie's United States retail energy business (GRE), Genie said that, "GRE delivered record levels of gross profit, income from operations, and Adjusted EBITDA for the quarter driven by strong margins in the retail book and mark-to-market increases in the value of its forward commodity positions after electricity and natural gas prices rose sharply."
GRE gross margin for Q4 2021 was 34.5%, up from 25.5% in the year-ago quarter
In 2021, Genie said that GRE focused on higher-margin customers as lower margin aggregation deals expired. GRE allowed certain less profitable meters to attrit in advance of the winter
For the fourth quarter of 2021, GRE generated income from operations and Adjusted EBITDA of $8.7 million and $8.8 million, compared to the year-ago results of $5.3 million and $5.4 million, respectively
For the full year 2021, GRE generated income from operations and Adjusted EBITDA of $34.7 million and $36.0 million, compared to the year 2020 results of $36.5 million and $37.4 million, respectively
As of Q4 2021, GRE was serving 285,000 meters, down from 361,000 as of Q3 2021 and 368,000 a year ago. Genie said that the reported GRE customer data excludes the impact from the expiration of aggregation deals
The reported decline of 76,000 meters for GRE from Q3 2021 to Q4 2021 compares to a flat meter count from Q2 2021 to Q3 2021.
GRE gross meter additions in Q4 2021 were 33,000, versus 46,000 in Q3 2021 and 59,000 a year ago
As of Q4 2021, GRE was serving 260,000 Retail Customer Equivalents (RCEs), versus 336,000 RCEs as of Q3 2021 and 337,000 a year ago
GRE average monthly churn was 6.2% in Q4 2021, versus 4.0% in Q3 2021
Genie said, "GRE delivered record levels of gross profit, income from operations, and Adjusted EBITDA for the quarter driven by strong margins in the retail book and mark-to-market increases in the value of its forward commodity positions after electricity and natural gas prices rose sharply. Operationally, GRE served 260k RCEs on December 31, 2021, a drop from the prior quarter-end as an aggregation deal did not renew, and the Company allowed certain less profitable meters to attrit in advance of the winter. While decreasing slightly compared to the year-ago quarter, per meter consumption remained well above pre-COVID levels. In addition, at 6.2% (excluding the impact from the expired aggregation deal), monthly churn was higher than usual due to the strategic decision not to renew certain customers. Looking ahead into 2022, the Company expects to increase its investment in new customer acquisition."
Across all its corporate segments, Genie meters served as of Q4 2021 were 352,000 versus 428,000 as of Q3 2021.
Across all segments, Genie Adjusted EBITDA for Q4 2021 was $12.5 million, versus $2.5 million a year ago
On December 31, 2021, Genie Energy reported $229.0 million in total assets, including $103.5 million in cash, restricted cash and marketable equity securities. Liabilities totaled $116.7 million, and working capital (current assets less current liabilities) totaled $86.1 million. Non-current liabilities were $2.4 million. Subsequent to the end of the fourth quarter, cash and current liabilities were reduced by $21.5 million related to the previously reported exit from the U.K. market.
During the quarter ended December 31, 2021, cash provided by operating activities was $21.0 million compared to $1.2 million a year ago.