Ellomay Capital Reports Results for the Three and Nine Months Ended September 30, 2015
Ellomay Capital Ltd. an emerging operator in the renewable energy and energy infrastructure sector, today reported its unaudited financial results for the three and nine month periods ended September 30, 2015.
Financial Highlights
Revenues were approximately $11.6 million for the nine months ended September 30, 2015, compared to approximately $12.7 million for the nine months ended September 30, 2014. Excluding unfavorable currency effects, revenues were up approximately 11% to €10.4 million from €9.4 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 $1.9 million (€1.7 million) for the nine months ended September 30, 2015, compared to approximately $2.2 million (€1.6 million) for the nine months ended September 30, 2014. Depreciation expenses were approximately $3.7 million (€3.3 million) for the nine months ended September 30, 2015, compared to approximately $4.1 million (€3 million) for the nine months ended September 30, 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.
Impairment charges were $0 for the nine months ended September 30, 2015, compared to approximately $0.6 million for the nine months ended September 30, 2014. Due to regulatory changes in Italy, principally Law 116/2014 providing for a decrease in the FiT guaranteed to existing photovoltaic plants, we examined the recoverability of our photovoltaic plants in Italy. As the book value as at September 30, 2014 of some of the photovoltaic plants exceeded their recoverable amount, we recognized in those cases impairment charges. During the fourth quarter of 2014, we reexamined the impairment charges recorded and determined to reverse the impairment charges due to changes in market conditions.
General and administrative expenses were approximately $2.7 million for the nine months ended September 30, 2015, compared to approximately $3.5 million for the nine months ended September 30, 2014. The decrease in general and administrative expenses was mainly related to reduced consulting expenses.
Company’s share of income of investee accounted for at equity, after elimination of intercompany transactions, was approximately $1.1 million for the nine months ended September 30, 2015, compared to gain of approximately $1.7 million in the nine months ended September 30, 2014. This decrease is due to the increased operational and financing costs related to the operations of the power plant operated by Dorad Energy Ltd. (“Dorad”) in May 2014.
Gain on bargain purchase was $0 million for the nine months ended September 30, 2015, compared to gain of approximately $3.7 million in the nine months ended September 30, 2014. The gain on bargain purchase recorded for the nine months ended September 30, 2014 resulted from the acquisition of the Murcia PV Plants on July 1, 2014. Other income was approximately $0.1 million for the nine months ended September 30, 2015, compared to approximately $1.7 million for the nine months ended September 30, 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 nine months ended September 30, 2015.
Financing income, net was approximately $0.9 million for the nine months ended September 30, 2015, compared to financing expenses, net of approximately $3.7 million for the nine months ended September 30, 2014. The change in financing income was mainly due to the reevaluation of our EUR/USD forward transactions, currency interest rate swap transactions and interest rate swap transactions in the aggregate amount of approximately $4.5 million, partially offset by expenses resulting from exchange rate differences in the amount of approximately $1.5 million, approximately $0.5 million interest on loans and interest rate swap transactions and approximately $1.8 million interest and other costs in connection with our Series A Debentures.
Tax benefit was approximately $2.1 million for the nine months ended September 30, 2015, compared to taxes on income of approximately $0.8 million for the nine months ended September 30, 2014. This tax benefit for the nine months ended September 30, 2015 resulted mainly from deferred tax income included in connection with the application of a tax incentive claimable upon filing the relevant tax return by reducing the amount of taxable profit. Net income was approximately $7.5 million for the nine months ended September 30, 2015, compared to approximately $4.9 million for the nine months ended September 30, 2014.Total other comprehensive loss was approximately $5.2 million for the nine months ended September 30, 2015, compared to approximately $8.1 million for the nine months ended September 30, 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 7.6% for the nine months ended September 30, 2015 and approximately 8.7% for the nine months ended September 30, 2014.
Total comprehensive income was approximately $2.3 million for the nine months ended September 30, 2015, compared to a loss of approximately $3.3 million for the nine months ended September 30, 2014.
EBITDA was approximately $3.7 million and approximately $8.1 million for the three and nine months ended September 30, 2015, respectively.
Net cash provided by operating activities was approximately $2.9 million and $4.6 million for the three and nine months ended September 30, 2015, respectively.
On June 29, 2015, the Company entered into a loan agreement with UBI Banca S.c.p.a., in connection with the financing of one of its PV Plants, pursuant to which the Company shall receive financing amounting to approximately Euro 10.7 million bearing an interest at the Euribor 6 month rate plus a range of 2.85% per annum. The interest on the loan and the principal are to be repaid semi-annually. The final maturity date of this loan is December 31, 2029. Draw down of the loan has occurred in September 2015. In connection with this loan, the Company executed an approximately € 7.5 million interest swap transaction with a decreasing notional principle amount based on the amortization table with a final maturity date of December 31, 2015. The Company is the fixed rate payer (the fixed rate is set at 1.17%).
In July 2015, the Company indirectly acquired an additional 15% interest in Ellomay Spain S.L., which owns a photovoltaic plant in Spain with an installed capacity of approximately 2.3 MWp, for approximately EUR 0.8 million (approximately $0.9 million), increasing its indirect ownership in Ellomay Spain S.L. from 85% to 100%.During the period July 1, 2015-September 30, 2015, the Company repurchased 66,238 of its ordinary shares for an aggregate consideration of approximately $0.6 million according to a share buyback program that was authorized the Company’s Board of Directors.
As of December 1, 2015, the Company held approximately $24.9 million in cash and cash equivalents, approximately $0.5 million in short-term restricted cash, approximately $6.5 in marketable securities and approximately $5.6 million in long-term restricted cash.Ran Fridrich, CEO and a board member of Ellomay commented: “Excluding unfavorable currency effects, revenues for the period were up approximately 11% compared to the relevant period in 2014. The Company continues to improve its operational parameters and its gross margin. The general and administrative expenses decreased despite an increase in expenses associated with the development of the pumped storage project in the Manara Cliff, Israel. Dorad’s results for the third quarter were in line with expectations.”
