Parent of IDT Energy Reports Retail Customer Growth

Genie Retail Energy, the parent of IDT Energy and several other retail energy brands, reported customer growth for the three months ended June 30, 2015.

Genie Retail Energy was serving 377,000 meters as of June 30, 2015, versus 358,000 as of March 31, 2015 and 364,000 a year ago.

The net growth of 19,000 meters since March 31, 2015 reverses the loss of 5,000 meters from December 31, 2014 to March 31, 2015.

Genie Retail Energy electricity meters were 250,000 as of June 30, 2015 and natural gas meters were 127,000

Genie Retail Energy said that the growth reflected a significant increase in the pace of gross meter additions. Genie Retail added 79,000 gross meters during the three months ended June 30, 2015 (2Q15), compared to 55,000 gross meters in 2Q14 and 52,000 gross meters in 1Q15.

"The sequential increase reflects seasonal factors, increases in sales of green electricity, and the early success of 'IDT Energy SmartBudget' and other offerings with fixed rate characteristics as well as approximately 9,000 net electric meters acquired via a new sales channel that offers geographically concentrated opportunities for meters acquisitions with reduced customer acquisition costs and fixed rates," the company said

On a Residential Customer Equivalent basis, Genie Retail Energy was serving 251,000 RCEs as of June 30, 2015

Genie Retail Energy's average monthly customer churn increased to 6.3% in 2Q15 from 5.9% in 1Q15 but remained well below the 8.1% in 2Q14 following the polar vortex of 2014 and ensuing market volatility. The increase in churn reflects the accelerated pace of meter acquisitions. On average, newly acquired meters exhibit higher rates of churn than long tenured meters. Meters enrolled in fixed rate offerings constituted approximately 11% of GRE's electric load at June 30, 2015.

Genie Retail Energy generated Adjusted EBITDA of $0.3 million in 2Q15 compared $1.1 million in the year-ago quarter as an increase in SG&A expense more than offset an increase in gross profit. Income from operations in 2Q15 was $0.1 million compared $0.9 million in 2Q14.

Genie Retail Energy gross profit for 2Q15 was $14.0 million, versus $11.5 million a year ago.

Genie Retail Energy's SG&A expense in 2Q15 increased 32.5% year over year to $13.9 million from $10.5 million in 2Q14. The increase was primarily due to a non-routine accrual of $1.5 million for estimated regulatory and legal expenses, as well as increases in personnel expense and customer acquisition costs associated with the increase in the rate of gross meter additions.

Genie Retail Energy revenue for 2Q15 was $39.5 million, versus $48.8 million a year ago.

"Genie Retail Energy is back in growth mode, adding 19,000 net meters in the second quarter, while delivering strong margins on sales of both electricity and natural gas. Looking ahead, we expect to continue to add net meters in our current territories, and are looking carefully at a number of options for geographic expansion," said Howard Jonas, Genie Energy's Chairman and CEO