Retail Supplier Reports Record Gross Profit, Adjusted EBITDA; Credits Allowing Certain Less Profitable Meters To Attrite In Advance Of Winter Volatility
May 9, 2022 Email This Story Copyright 2010-21 EnergyChoiceMatters.com
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In reporting first quarter earnings today, Genie Energy, Ltd. said that its U.S. retail supplier segment, Genie Retail Energy (GRE), "delivered record levels of gross profit, income from operations and Adjusted EBITDA for the quarter highlighted by strong margins in its retail book."
"The strong [GRE] performance was driven, in part, by the decision to allow certain less profitable meters to attrite in advance of the winter volatility and optimize the forward book accordingly," Genie said
Such decision to allow customers to attrite included allowing municipal aggregation deals to not renew.
Specifically, GRE generated income from operations and Adjusted EBITDA of $30.2 million and $30.5 million in the first quarter of 2022, compared to $1.2 million and $1.5 million, respectively, a year ago.
First quarter 2022 GRE gross margin was 55.5%, versus 16.5% a year ago
As of March 31, 2022, GRE was serving 286,000 meters, versus 285,000 as of December 31, 2021, and 373,000 a year ago
In terms of Retail Customer Equivalents (RCEs), GRE was serving 260,000 RCEs as of March 31, 2022, flat versus December 31, 2021, and compared to 347,000 a year ago.
GRE "gross sales" (gross customer additions) were 44,000 for the first quarter of 2022, versus 62,000 a year ago.
GRE average monthly churn decreased to 4.5% for the first quarter of 2022, from 4.9% in the year-ago quarter and 6.2% in the fourth quarter of 2021 (excluding the impact of expired aggregation deals).
On a consolidated basis, across all of the company's segments, Genie was serving 347,000 meters as of March 31, 2022, versus 352,000 as of December 31, 2021, and 447,000 a year ago.
On a consolidated basis, Genie reported Adjusted EBITDA of $25.7 million for the first quarter of 2022, versus ($4.4) million a year ago
"The second quarter is typically a period of seasonally lower consumption in the U.S.," said Michael Stein, Genie's chief executive officer. "However, we expect to again deliver relatively strong results across our retail businesses as we continue to focus on customer portfolio management and margin preservation until we return to a less volatile commodity price environment. Once market conditions normalize, our strong cash flows, cash position and debt-free balance sheet leaves us well-positioned to invest in growth opportunities."