Ellomay Capital Reports Results for the Full Year of 2015

Ellomay Capital Ltd., an emerging operator in the renewable energy and energy infrastructure sector,recently reported its financial results for the year and fourth quarter ended December 31, 2015.

Financial Highlights

• Revenues were approximately $13.8 million for the year ended December 31, 2015, compared to approximately $15.8 million for year ended December 31, 2014. Excluding unfavorable currency effects, revenues were up approximately 5% to €12.5 million from €11.9 million in the corresponding period last year. The change in revenues is mainly a result of an increase in revenues due to the acquisition of three photovoltaic plants in Murcia, Spain (the “Murcia PV Plants”) on July 1, 2014. The decrease in the amount of reported revenues is due to the presentation of results in U.S. dollar and the devaluation of the Euro against the U.S. dollar during the period.
• Operating expenses were approximately $2.9 million (€2.6 million) for the year ended December 31, 2015, compared to approximately $3.1 million (€2.3 million) for year ended December 31, 2014. Depreciation expenses were approximately $4.9 million (€4.4 million) for the year ended December 31, 2015, compared to approximately $5.5 million (€4.1 million) for the year ended December 31, 2014. These changes resulted from an increase in expenses due to addition of the Murcia PV Plants’ operations acquired on July 1, 2014, offset by the devaluation of the Euro against the U.S. dollar.
• General and administrative expenses were approximately $3.7 million for the year ended December 31, 2015, compared to approximately $4.3 million for the year ended December 31, 2014. The decrease in general and administrative expenses was mainly related to a reduction in consulting expenses.
• Company’s share of income of investee accounted for at equity, after elimination of intercompany transactions, was approximately $2.4 million in the year ended December 31, 2015, compared to approximately $1.8 million in the year ended December 31, 2014. This increase is due to the commencement of operation of the power plant operated by Dorad Energy Ltd. in May 2014.
• Other income, net was approximately $0.02 million in the year ended December 31, 2015, compared to approximately $1.4 million in the year ended December 31, 2014. Other income was primarily attributable to compensation to be received in connection with a pumped storage project in the Gilboa, Israel initially recognized in 2014. The revaluation of such financial asset is recognized as other income for the year ended December 31, 2015.
• Gain on bargain purchase was $0 for year ended December 31, 2015, compared to approximately $4 million for the year ended December 31, 2014. The gain on bargain purchase recorded for the year ended December 31, 2014 resulted from the acquisition of the Murcia PV Plants on July 1, 2014.
• Financing income, net was approximately $0.6 million for the year ended December 31, 2015, compared to financing expenses, net of approximately $3.4 million for the year ended December 31, 2014. The change in financing income was mainly due to the reevaluation of the Company’s EUR/USD forward transactions, interest rate swap transactions and settlement of the Company’s currency interest rate swap transactions in the aggregate amount of approximately $5.6 million, partially offset by expenses resulting from exchange rate differences in the amount of approximately $1.8 million, approximately $0.8 million interest on loans and interest rate swap transactions and approximately $2.5 million interest and other costs in connection with The Company’s Series A Debentures.
• Tax benefit was approximately $1.9 million in the year ended December 31, 2015, compared to taxes on income of approximately $0.2 million in the year ended December 31, 2014. The tax benefit for the year ended December 31, 2015 is a result of the application of a tax incentive by several of The Company’s Italian subsidiaries (“Tremonti-ambiente”).
• Net income was approximately $7.3 million in the year ended December 31, 2015, compared to approximately $6.6 million in the year ended December 31, 2014.
• Total other comprehensive loss was approximately $7.1 million for the year ended December 31, 2015, compared to approximately $12.3 million in the year ended December 31, 2014. The change was mainly due to presentation currency translation adjustments as a result of fluctuations in the Euro/USD exchange rates. Such loss is a result of the devaluation in the Euro against the U.S. Dollar of approximately 10.4% for the year ended December 31, 2015 and approximately 11.8% for the year ended December 31, 2014.
• Total comprehensive income was approximately $0.2 million in the year ended December 31, 2015, compared to loss of approximately $5.6 million in the year ended December 31, 2014. The comprehensive income for the year ended December 31, 2015 was primarily due to the total other comprehensive loss of approximately $7.1 million for the period, which offset the Company’s net income of approximately $7.4 million for the period.
• EBITDA was approximately $9.7 million for the year ended December 31, 2015, compared to approximately $15.7 million for the year ended December 31, 2014. The EBITDA for the year ended December 31, 2014 included an amount of approximately $4 million gain on bargain purchase as a result of the acquisition of the Murcia PV Plants on July 1, 2014.
• Net cash provided by operating activities was approximately $4.9 million for the year ended December 31, 2015.
• As of March 1, 2016, the Company held approximately $19.7 million in cash and cash equivalents, approximately $0.5 million in short-term restricted cash, approximately $6.5 million in marketable securities and approximately $5 million in long-term restricted cash.

Dividend Declaration

The Company further announced that, in accordance with its dividend distribution policy, the Company’s Board of Directors approved the distribution of a cash dividend in the amount of $0.225 per share, totaling approximately US$ 2.4 million. The dividend is payable on April 20, 2016 to all of the Company’s shareholders of record at the close of trading on the NYSE MKT (or the Tel-Aviv Stock Exchange, as applicable) on April 6, 2016.

In accordance with Israeli tax law, the dividend is subject to withholding at source at the rate of 25%, subject to applicable exceptions and exemptions.

Ran Fridrich, CEO and a board member of Ellomay commented: “The Company’s revenues for 2015 in Euro increased by approximately 5% compared to 2014. Despite the decrease in subsidies in Italy, where most of the Company’s PV plants are located, as a result of operational improvements the Company managed to maintain in 2015 a similar operating profit in Euro as in 2014. Unfavorable currency effects resulting from the weakening of the euro against the dollar were partially offset by the execution of forward contracts. The Company holds a quality and stable portfolio of assets, producing on-going operational cash flows. We continue to examine attractive investment opportunities in various fields of renewable energy.”

Information for the Company’s Series A Debenture Holders

As of December 31, 2015, the Company’s Net Financial Debt (as such term is defined in the Series A Debentures Deed of Trust) was approximately $13.5 million (consisting of approximately $18 million of short-term and long-term debt from banks and other interest bearing financial obligations and approximately $40 million in connection with the Series A Debentures issuances (in January and September 2014), net of approximately $25.2 million of cash and cash equivalents and marketable securities and net of approximately $19.3 million of project finance and related hedging transactions of the Company’s subsidiaries).