Ellomay Capital Ltd. (NYSE American: ELLO) (TASE: ELLO) ("Ellomay"), a renewable energy and power generator and developer of renewable energy and power projects in Europe, Israel and the USA, today reported its unaudited financial results for the three month period ended March 31, 2024.
Financial Highlights
- Total assets as of March 31, 2024 amounted to approximately 666.8 million, compared to total assets as of December 31, 2023 of approximately 612.9 million.
- Revenues1 for the three months ended March 31, 2024 were approximately 8.2 million, compared to revenues of approximately 11.7 million for the three months ended March 31, 2023.
- Loss from continuing operations for the three months ended March 31, 2024 was approximately 4.6 million, compared to net profit from continuing operations of approximately 3 million for the three months ended March 31, 2023. Loss for the three months ended March 31, 2024 was approximately 4.9 million, compared to net profit of approximately 3.3 million for the three months ended March 31, 2023.
- EBITDA for the three months ended March 31, 2024 was approximately 1.6 million, compared to EBITDA of approximately 4.2 million for the three months ended March 31, 2023. See below under "Use of Non-IFRS Financial Measures" for additional disclosure concerning EBITDA.
- On December 31, 2023, the Company executed an agreement to sell its holdings in the 9 MW solar plant located in Talmei Yosef. The sale was consummated following the balance sheet date, on June 3, 2024, and the net consideration received at closing was approximately NIS 42.6 million (approximately 10.6 million). In connection with the expected sale, the Company presents the results of this solar plant as a discontinued operation and the results for the three months ended March 31, 2023 were adjusted accordingly.
Financial Overview for the Three Months Ended March 31, 2024
- Revenues were approximately 8.2 million for the three months ended March 31, 2024, compared to approximately 11.7 million for the three months ended March 31, 2023. The decrease in revenues mainly results from the decrease in electricity prices in Spain.
- Operating expenses were approximately 4.6 million for the three months ended March 31, 2024, compared to approximately 6.4 million for the three months ended March 31, 2023. The decrease in operating expenses mainly results from a decrease in direct taxes on turnover paid by the Company's Spanish subsidiaries as a result of reduced electricity prices. The operating expenses of the Company's Spanish subsidiaries for the three months ended March 31, 2023 were impacted by the Spanish RDL 17/2022, which established the reduction of returns on the electricity generating activity of Spanish production facilities that do not emit greenhouse gases, accomplished through payments of a portion of the revenues by the production facilities to the Spanish government. Depreciation and amortization expenses were approximately 4.1 million for the three months ended March 31, 2024, compared to approximately 4 million for the three months ended March 31, 2023.
- Project development costs were approximately 1.4 million for the three months ended March 31, 2024, compared to approximately 1.2 million for the three months ended March 31, 2023. The increase in project development costs is mainly due to development expenses in connection with solar projects in the USA, Italy, and Israel.
- General and administrative expenses were approximately 1.6 million for the three months ended March 31, 2024, compared to approximately 1.4 million for the three months ended March 31, 2023. The increase in general and administrative expenses is mostly due to higher consultancy expenses.
- The Company's share of profits of equity accounted investee, after elimination of intercompany transactions, was approximately 1.3 million for the three months ended March 31, 2024, compared to approximately 1.2 million for the three months ended March 31, 2023. The increase in share of profits of equity accounted investee was mainly due to lower financing expenses incurred by Dorad for the period as a result of the CPI indexation of loans from banks.
- Financing expenses, net, were approximately 3.3 million for the three months ended March 31, 2024, compared to financing income of approximately 1.7 million for the three months ended March 31, 2023. The increase in financing expenses, net, was mainly attributable to expenses resulting from exchange rate differences amounted to approximately 0.5 million for the three months ended March 31, 2024, compared to income resulting from exchange rate differences of approximately 4.4 million for the three months ended March 31, 2023, an aggregate change of approximately 5.1 million. The exchange rate differences were mainly recorded in connection with the New Israeli Shekel ("NIS") cash and cash equivalents and the Company's NIS denominated debentures and were caused by the 0.8% appreciation of the NIS against the euro during the three months ended March 31, 2024, compared to a 4.8% devaluation of the NIS against the euro during the three months ended March 31, 2023. The increase in financing expenses was partially offset by an increase in financing income of approximately 0.5 million in connection with derivatives and warrants in the three months ended March 31, 2024, compared to the three months ended March 31, 2023.
- Tax benefit was approximately 0.8 million for the three months ended March 31, 2024, compared to taxes on income of approximately 1.4 million in three months ended March 31, 2023. The change in tax is mainly due to deferred tax recorded in connection with carry forward loss for which deferred tax were not previously recorded, partially offset by the decrease in electricity prices in Spain, resulting in lower taxable income of the Company's Spanish subsidiaries.
- Loss from discontinued operation (net of tax) was approximately 0.3 million for the three months ended March 31, 2024, compared to a profit from discontinued operation of approximately 0.2 million for the three months ended March 31, 2023.
- Loss for the three months ended March 31, 2024 was approximately 4.9 million, compared to net profit of approximately 3.3 million for the three months ended March 31, 2023.- Total other comprehensive income was approximately 12 million for three months ended March 31, 2024, compared to total other comprehensive loss of approximately 26.6 million in three months ended March 31, 2023. The change in total other comprehensive loss mainly results from changes in fair value of cash flow hedges, including a material decrease in the fair value of the liability resulting from the financial power swap that covers approximately 80% of the output of the Talasol solar plant (the "Talasol PPA"). The Talasol PPA experienced a high volatility due to the substantial change in electricity prices in Europe. In accordance with hedge accounting standards, the changes in the Talasol PPA's fair value are recorded in the Company's shareholders' equity through a hedging reserve and not through the accumulated deficit/retained earnings. The changes do not impact the Company's consolidated net profit/loss or the Company's consolidated cash flows.
- Total comprehensive income was approximately 7.1 million for the three months ended March 31, 2024, compared to total comprehensive loss of approximately 29.9 million for the three months ended March 31, 2023.
- EBITDA was approximately 1.6 million for the three months ended March 31, 2024, compared to approximately 4.2 million for the three months ended March 31, 2023.
Net cash from operating activities was approximately 1.2 million for the three months ended March 31, 2024, compared to approximately 1.8 million for the three months ended March 31, 2023.
- On January 16, 2024, the Company issued in an Israeli public offering units consisting of an aggregate principal amount of NIS 170 million of its newly issued Series F Debentures, due March 31, 2030, and the Series 2 Options to purchase an aggregate of 1,020,000 ordinary shares at a price per share of NIS 80 (subject to customary adjustments), which expire on January 5, 2028. The net proceeds of the offering, net of related expenses such as consultancy fee and commissions, were approximately NIS 165 million (approximately 40 million as of the issuance date).
On April 17, 2024, the Company issued NIS 40 million par value of the Series F Debentures in a private placement to Israeli classified investors for an aggregate gross consideration of approximately NIS 37.8 million (approximately 9.4 million as of the issuance date), reflecting a price of NIS 0.946 per NIS 1 principal amount of the Series F Debentures. Following completion of the private placement, the aggregate outstanding par value of the Company's Series F Debentures is NIS 210 million.
CEO Review for the First Quarter of 2024
Revenues in the first quarter of 2024 were approximately 8.2 million, compared to revenues of approximately 11.7 million in the corresponding quarter last year. Most of the decrease in revenues was due to the drop in prices in Spain, which subtracted approximately 3 million from the revenues.
Operating expenses in the first quarter of 2024 decreased by approximately 1.8 million compared to the corresponding quarter last year. Project development expenses in the first quarter of 2024 increased by approximately 0.3 million compared to the corresponding quarter last year. Project development expenses included non-recurring expenses of approximately 0.8 million. Excluding such non-recurring expenses, there was a decrease in project development expenses.
