Genie Retail Energy Reports Customer Growth, Higher Earnings

Genie Retail Energy continued net customer growth during the fourth quarter of 2015, though at a slower pace than the third quarter of 2015

At December 31, 2015, Genie Retail Energy was serving 392,000 meters, versus 388,000 as of September 30, 2015, and 363,000 a year ago.

The net growth of 4,000 meters from September 30, 2015 to December 31, 2015 compares to growth of 11,000 meters from June 30, 2015 to September 30, 2015.

At December 31, 2015, electricity meters were 264,000 and natural gas meters were 128,000.

Genie Retail Energy reported that as of December 31, 2015, New York represented 53% of its total meters served.

On a Residential Customer Equivalent basis, Genie Retail Energy was serving 259,000 RCEs as of December 31, 2015, versus 260,000 RCEs as of September 30, 2015 and 243,000 a year ago.

Genie Retail Energy’s average monthly customer churn declined to 6.3% in 4Q15 from 6.7% in 3Q15, but increased from 5.9% in the year ago quarter. The sequential decrease in churn represents the impact of recent enrollments in electricity supply plans with fixed rate characteristics compared to the legacy customer base. Customers in these plans tend to have somewhat lower rates of churn than those in variable rate plans, the company said. Meters enrolled in offerings with fixed rate characteristics constituted approximately 16% of GRE’s electric load at December 31, 2015.

Genie Retail Energy’s gross margin in 4Q15 was 36.7% compared to 25.7% in the year-ago quarter reflecting a favorable operating environment with substantial reductions in wholesale commodity costs. Gross profit was $16.1 million for the fourth quarter of 2015, versus $12.8 million a year ago.

Genie Retail Energy generated Adjusted EBITDA of $1.6 million in 4Q15 compared to $1.4 million in the year ago quarter. The increase primarily reflects the improvement in gross margin partially offset by higher customer acquisition costs compared to the year ago quarter.

Genie Retail Energy’s income from operations in 4Q15 was $1.5 million, compared to a loss from operations of $2.1 million in 4Q14. The improvement reflects, in part, the absence of a goodwill impairment charge of $3.6 million incurred in 4Q14.

For the calendar year 2015, Genie Retail Energy Adjusted EBITDA increased to $14.2 million from $7.5 million in 2014. For the full year 2015, Genie Retail Energy income from operations improved to $13.5 million from $3.5 million a year earlier.