Ellomay Capital Reports Results for the Third Quarter of 2014

Dec 31, 2014, 01:05 ET from Ellomay Capital Ltd.

TEL-AVIV, Israel, Dec. 31, 2014 /PRNewswire/ -- Ellomay Capital Ltd. (NYSE MKT: ELLO; TASE: ELOM)("Ellomay" or the "Company") 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, 2014.

Financial Highlights

  • Revenues were approximately $5.2 million and $12.7 million for the three and nine months ended September 30, 2014, respectively. Following the approval by the Italian parliament in August 2014 and the conversion into law of the Italian decree, executed by the Italian President in June 2014, providing for a decrease in the Feed-in-Tariff ("FiT") guaranteed to existing photovoltaic plants with installed capacity of more than 200 kW, the Company decided to elect the option that will entail an approximate 8% reduction in the incentive over the remaining FiT period (originally 20 years starting the connection to the grid) commencing January 1, 2015 with respect to all of its Italian photovoltaic plants. The Company recognized impairment charges of approximately $0.6 million in connection with this new legislation.
  • Gain on bargain purchase was approximately $3.7 million for the three and nine months ended September 30, 2014. In July 2014, the Company consummated the acquisition of three photovoltaic (solar) plants with an aggregate capacity of approximately 5.6MWp (the "PV Plants"). The PV Plants are ground mounted fixed technology plants located in Murcia, Spain, are already constructed and operating and were connected to the Spanish national grid in 2011. The PV Plants were acquired from a Spanish company whose German parent company has entered into insolvency proceedings. The PV Plants and all associated assets and rights were purchased by the Company for an aggregate purchase price of approximately Euro 9.5 million (approximately US$13 million).The Company's results for the nine months ended September 30, 2014 do not include the results of the PV Plants for six months ended June 30, 2014, as the closing date of the acquisition of the PV Plants was July 17, 2014.

    The Company performed a preliminary analysis of the fair value of identifiable assets acquired and liabilities assumed and a preliminary and provisional purchase price allocation and recorded gain on bargain purchase (negative goodwill) in the amount of approximately $3.7 million based upon management's best estimate of the value as a result of such preliminary analysis. Negative goodwill represents the excess of the Company's share in the fair value of acquired identifiable assets, liabilities and contingent liabilities over the cost of an acquisition. The provisional amounts recognized may be adjusted during the 12 month period following the acquisition in accordance with IFRS 3 as more detailed analyses are completed and additional information on the fair value of assets and liabilities becomes available. Therefore, actual amounts recorded upon the finalization of the valuation may differ materially from the information presented in this release.

  • General and administrative expenses were approximately $1.1 million and $3.5 million for the three and nine months ended September 30, 2014, respectively. The general and administrative expenses for the nine months ended September 30, 2014 included expenses in the amount of approximately $0.6 million, such as payment of bonuses to employees, expenses in connection with a pumped storage project and expenses in connection with a pre-bid agreement executed with respect to a joint offer to acquire participating interests in two exploration and drilling licenses off-shore Israel.
  • Financial expenses, net were approximately $1.2 million and $3.7 million for the three and nine months ended September 30, 2014, respectively, mainly due to swap payments and interest payment and expenses due on and connected to our Series A Debentures.
  • Company's share of income of investee accounted for at equity was approximately $1.9 million and $1.7 million for the three and nine months ended September 30, 2014, respectively, as the power plant operated by Dorad Energy, Ltd. ("Dorad") successfully commenced commercial operation in May 2014.
  • Net income was approximately $5.4 million and $4.9 million for the three and nine months ended September 30, 2014, respectively.
  • Total other comprehensive loss was approximately $7.1 million and $8.1 million for the three and nine months ended September 30, 2014, respectively, mainly due to presentation currency translation adjustments as a result of fluctuations in the Euro/USD exchange rates.
  • Total comprehensive loss was approximately $1.7 million and $3.3 million in the three and nine months ended September 30, 2014, respectively.
  • Adjusted EBITDA was approximately $5.1 million and $10.4 million for the three and nine months ended September 30, 2014, respectively.
  • Net cash provided by operating activities was approximately $1.5 million and $1.6 million for the three and nine months ended September 30, 2014, respectively.
  • During the nine months ended September 30, 2014, the Company extended an additional aggregate amount of approximately $4 million to U. Dori Energy Infrastructures Ltd. ("Dori Energy") in connection with Dorad's funding requirements from Dori Energy pursuant to the agreement between Dorad and its shareholders.
  • During the nine month period ended September 30, 2014, the Company repaid a loan from Discount bank in the amount of Euro 13.5 million (approximately $18.6 million) and Ellomay PV Two S.r.l., a wholly-owned Italian subsidiary of the Company, repaid a loan to an Italian bank (Unicredit S.p.A.) in the amount of approximately Euro 4.6 million (approximately $6.3 million), as this loan was under terms less beneficial to the Company compared to alternative financing resources.
  • As of December 15, 2014, the Company held approximately $20.3 million in cash and cash equivalents, approximately $4 million in short-term deposits, approximately $3.6 million marketable securities and approximately $5.4 million in restricted cash.

Ran Fridrich, CEO and a board member of Ellomay commented: "The Company's results for the three and nine months ended September 30, 2014 reflect the increase in the Company's revenues despite the devaluation of the Euro against the US dollar. The Company enjoyed income from Dorad's operations for the first time as well as the revenues from the three newly acquired PV projects in Spain commencing July 2014. The Company is engaged in the development stage of a pumped-storage project in Manara Cliff in Israel and continues to seek suitable business opportunities in order to increase its operations."

Information for the Company's Series A Debenture Holders

As of September 30, 2014, the Company's Net Financial Debt (as such term is defined in the Series A Debentures Deed of Trust) was approximately $26.3 million (consisting of approximately $14 million of short-term and long-term debt from banks and other interest bearing financial obligations and approximately $52.6 million in connection with the Series A Debentures issuances (in January and June 2014), net of approximately $30 million of cash and cash equivalents and net of approximately $10.3 million of project finance and related hedging transactions of the Company's subsidiaries).

Use of NON-IFRS Financial Measures

Adjusted EBITDA is a non-IFRS measure and is defined as earnings before financial expenses, net, gain on bargain purchase, financial expenses, net, taxes, depreciation and amortization. The Company presents this measure in order to enhance the understanding of the Company's historical financial performance and to enable comparability between periods. While the Company considers Adjusted EBITDA to be an important measure of comparative operating performance, Adjusted EBITDA should not be considered in isolation or as a substitute for net income or other statement of operations or cash flow data prepared in accordance with IFRS as a measure of profitability or liquidity. Adjusted EBITDA does not take into account the Company's commitments, including capital expenditures, and restricted cash and, accordingly, is not necessarily indicative of amounts that may be available for discretionary uses. Not all companies calculate Adjusted EBITDA in the same manner, and the measure as presented may not be comparable to similarly-titled measures presented by other companies. The Company's Adjusted EBITDA may not be indicative of the historic operating results of the Company; nor is it meant to be predictive of potential future results. The Company uses the term "Adjusted EBITDA" to highlight the fact that for the nine months ended September 30, 2014 the Company deducted Impairment charges in connection with the new legislation Italy and that for the year ended December 31, 2013 and for the three and nine months ended September 30, 2014 the Company deducted the gain on bargain purchase from the net income. The Adjusted EBITDA is otherwise fully comparable to EBITDA information which has been previously provided for prior periods. See the reconciliation between the net income (loss) and the Adjusted EBITDA presented at the end of this Press Release.

About Ellomay Capital Ltd.

Ellomay is an Israeli based company whose shares are registered with the NYSE MKT, under the trading symbol "ELLO" and with the Tel Aviv Stock Exchange under the trading symbol "ELOM."  Since 2009, Ellomay Capital focuses its business in the energy and infrastructure sectors worldwide. Ellomay (formerly Nur Macroprinters Ltd.) previously was a supplier of wide format and super-wide format digital printing systems and related products worldwide, and sold this business to Hewlett-Packard Company during 2008 for more than $100 million.

To date, Ellomay has evaluated numerous opportunities and invested significant funds in the renewable, clean energy and natural resources industries in Israel, Italy and Spain, including:

  • Approx. 22.6MW of photovoltaic power plants in Italy, approx. 5.6MW of photovoltaic power plants in Spain and 85% of 2.3MW of photovoltaic power plant in Spain;
  • 7.5% indirect interest, with an option to increase its holdings to 9.375%, in Dorad Energy Ltd. Israel's largest private power plant, with production capacity of approximately 840 MW, representing about 6%-8% of Israel's total current electricity consumption;

Ellomay Capital is controlled by Mr. Shlomo Nehama, Mr. Hemi Raphael and Mr. Ran Fridrich.
Mr. Nehama is one of Israel's prominent businessmen and the former Chairman of Israel's leading bank, Bank Hapohalim, and Messrs. Raphael and Fridrich both have vast experience in financial and industrial businesses. These controlling shareholders, along with Ellomay's dedicated professional management, accumulated extensive experience in recognizing suitable business opportunities worldwide. The expertise of Ellomay's controlling shareholders and management enables the company to access the capital markets, as well as assemble global institutional investors and other potential partners. As a result, Ellomay is capable of considering significant and complex transactions, beyond its immediate financial resources.

For more information about Ellomay, visit http://www.ellomay.com.

Information Relating to Forward-Looking Statements

This press release contains forward-looking statements that involve substantial risks and uncertainties, including statements that are based on the current expectations and assumptions of the Company's management. All statements, other than statements of historical facts, included in this press release regarding the Company's plans and objectives, expectations and assumptions of management are forward-looking statements.  The use of certain words, including the words "estimate," "project," "intend," "expect," "believe" and similar expressions are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  The Company may not actually achieve the plans, intentions or expectations disclosed in the forward-looking statements and you should not place undue reliance on the Company's forward-looking statements. Various important factors could cause actual results or events to differ materially from those that may be expressed or implied by our forward-looking statements including changes in regulation, seasonality of the PV business and market conditions. These and other risks and uncertainties associated with the Company's business are described in greater detail in the filings the Company makes from time to time with Securities and Exchange Commission, including its Annual Report on Form 20-F. The forward-looking statements are made as of this date and the Company does not undertake any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

 

Contact:
Kalia Weintraub
CFO
Tel: +972 (3) 797-1111
Email: anatb@ellomay.com

 

Condensed Consolidated Statements of Financial Position (Unaudited)



September 31,

December 31,


2014

2013


US$ in thousands

Assets



Current assets






Cash and cash equivalents

30,007

7,238

Short-term deposits

-

5,153

Restricted cash

294

5,653

Trade receivables

428

134

Other receivables and prepaid expenses

7,326

4,357


38,055

22,535

Non-current assets






Investments in equity accounted investees

28,524

24,601

Financial asset

1,476

389

Property, plant and equipment

97,315

93,671

Restricted cash

4,233

4,315

Other assets

1,978

1,419


133,526

124,395




Total assets

171,581

146,930




Liabilities and Equity



Current liabilities






Loans and borrowings

581

19,454

Debentures

5,133

-

Accounts payable

1,892

2,154

Accrued expenses and other payables

5,554

5,311


13,160

26,919

Non-current liabilities






Finance lease obligations

5,940

6,814

Long-term bank loans

4,284

11,050

Debentures

47,449

-

Other long-term liabilities

4,250

2,386





61,923

20,250




Total liabilities

75,083

47,169

Equity



Share capital

26,180

26,180

Share premium

76,932

76,932

Treasury shares

(522)

(522)

Reserves

(3,976)

4,154

Accumulated deficit

(2,138)

(7,011)

Total equity attributed to shareholders of the Company

96,476

99,733

Non-Controlling Interest

22

28




Total equity

96,498

99,761




Total liabilities and equity

171,581

146,930


 

Condensed Consolidated Interim Statements of Comprehensive Income (loss) (Unaudited)



For the nine

For the three

For the


Months ended

Months ended

Year ended


September 30,

September 30,

December 31,


2014

2014

2013


US$ thousands (except per share amounts)

Revenues

12,729

5,198

12,982

Operating expenses

2,183

654

2,381

Depreciation expenses

4,070

1,449

4,021

Impairment charges

568

-

-

Gross profit

5,908

3,095

6,580





General and administrative expenses

3,460

1,112

3,449

Company's share of income (losses) of investee accounted for at equity

1,667

1,897

*(540)

Other income, net

1,637

(206)

*(42)

Gain on bargain purchase

3,688

3,688

10,237

Operating profit

9,440

7,362

12,786





Financing income

469

267

204

Financial income (expenses) in connection with derivatives, net

(323)

(20)

*1,543

Financing expenses

(3,884)

(969)

(4,201)

Financing expenses, net  

3,738

1,216

2,454





Profit before taxes on income

5,702

6,146

10,332





Taxes on income

835

757

245





Net income for the period

4,867

5,389

10,087





Income attributable to:




Shareholders of the Company

4,873

5,389

10,068

Non-controlling interests

(6)

-**

19

Net income for the period

4,867

5,389

10,087





Other comprehensive income (loss)




Items that are or may be reclassified to profit or loss:




Foreign currency translation adjustments

(437)

(134)

6,038





Items that would not be reclassified to profit or loss:




Presentation currency translation adjustments

(7,693)

(6,924)

-





Total other comprehensive income (loss)

(8,130)

(7,058)

6,038





Total comprehensive income (loss) for the period

(3,263)

(1,669)

16,125

Net earnings per share




Basic earnings per share

0.46

0.50

0.94

Diluted earnings per share

0.45

0.50

0.94

* During the current period the Company changed the comprehensive income statement classification of Company's investments results in energy projects. The results of such investments have recorded within the operating results. Accordingly, the share of losses of investee accounted for under the equity method and re-evaluation of option to acquire additional shares in the investee to Operating Profit to reflect more appropriately the Company's operations as a holding company operating in the business of energy and infrastructure. Comparative amounts were reclassified for consistency.

** Less than 1 US$ thousand.

 

 

Condensed Consolidated Interim Statements of Changes in Equity (Unaudited)


Attributable to shareholders of the Company

Non- controlling

Total


interests

Equity






Translation









reserve









from





Share

Share

Accumulated

Treasury

Foreign





capital

premium

deficit

shares

Operations

Total




US$ in thousands

Balance as at









January 1, 2013

26,180

76,410

(17,079)

(522)

(1,884)

83,105

9

83,114

Profit for the year

-

-

10,068

-

-

10,068

19

10,087

Other comprehensive income

 

-

 

-

 

-

 

-

 

6,038

 

6,038


 

6,038

Total comprehensive income

-

-

10,068

-

6,038

16,106

19

16,125

Transactions with owners









 of the Company, recognized









 directly in equity:









Cost of share-based









payments

-

522

-

-

-

522

-

522

Balance as at









December 31, 2013

26,180

76,932

(7,011)

(522)

4,154

99,733

28

99,761










 

 

 



Attributable to owners of the Company

Non- controlling

Total



interests

Equity






Translation










reserve

Presentation









from

currency





Share

Share

Accumulated

Treasury

foreign

translation





capital

premium

deficit

shares

operations

reserve

Total





US$ in thousands

For the nine months ended










September 30, 2014




















Balance as at










January 1, 2014

26,180

76,932

(7,011)

(522)

4,154

-

99,733

28

99,761

Net income for the period

-

-

4,873

-

-


4,873

(6)

4,867

Other comprehensive

loss

-

-

-

-

(437)

(7,693)

(8,130)

-

(8,130)

Total comprehensive loss

-

-

4,873

-

(437)

(7,693)

(3,257)

(6)

(3,263)











Balance as at










 September 30, 2014

26,180

76,932

(2,138)

(522)

3,717

(7,693)

96,476

22

96,498

 

 


Condensed Consolidated Interim Statements of Changes in Equity (Unaudited) (cont'd)



Attributable to owners of the Company

Non- controlling

Total



interests

Equity






Translation










reserve

Presentation









from

currency





Share

Share

Accumulated

Treasury

foreign

translation





capital

premium

deficit

shares

operations

reserve

Total





US$ in thousands

For the three months ended










September 30, 2014




















Balance as at










June 30, 2014

26,180

76,932

(7,527)

(522)

3,851

(769)

98,145

22

98,167

Net income for the period

-

-

5,389

-

-


5,389

-

5,389

Other comprehensive loss

-

-

-

-

(134)

(6,924)

(7,058)

-

(7,058)

Total comprehensive loss

-

-

5,389

-

(134)

(6,924)

(1,669)

-

(1,669)











Balance as at










 September 30, 2014

26,180

76,932

(2,138)

(522)

3,717

(7,693)

96,476

22

96,498

 

 

Condensed Consolidated Interim Statements of Cash Flows (Unaudited)


For the nine 
Months ended
September 30,
2014

For the three 
Months ended
September 30,
2014

 

For the year
ended December
31, 2013


US$ in thousands

Cash flows from operating activities








Income for the period

4,867

5,389

10,087





Adjustments for:








Financing expenses, net

3,738

1,216

*2,454

Gain on bargain purchase

(3,688)

(3,688)

(10,237)

Impairment charges

568

-

-

Depreciation

4,070

1,449

4,021

Cost of share-based payment

-

-

522

Company's share of income (losses) of investee accounted for at equity

(1,667)

(1,897)

540

Decrease (increase) in trade receivables

(125)

(51)

218

Decrease (increase) in other receivables and prepaid expenses

(4,304)

(2,045)

1,783

Decrease (increase) in other assets

(675)

803

*54 

Increase (decrease) in accrued severance pay, net

(29)

(2)

22

Increase (decrease) in accounts payable

(63)

(240)

376

Increase (decrease) in other payables and accrued expenses

878

337

(1,450)

Taxes on income

835

757

245

Taxes paid

(180)

-

(458)

Interest received

127

69

137

Interest paid

(2,779)

(254)

(1,925)


(3,294)

(3,908)

(3,698)









Net cash provided by operating activities

1,573

1,481

6,389

 

* During the current period the Company changed the comprehensive income statement classification of Company's investments results in energy projects. The results of such investments have recorded within the operating results. Accordingly, the share of losses of investee accounted for under the equity method and re-evaluation of option to acquire additional shares in the investee to Operating Profit to reflect more appropriately the Company's operations as a holding company operating in the business of energy and infrastructure. Comparative amounts were reclassified for consistency.

 

 


Condensed Consolidated Interim Statements of Cash Flows (Unaudited) (cont'd)






For the nine
Months ended
September 30,
2014

For the three 
Months ended
September 30,
2014

For the year
ended December
31, 2013


US$ in thousands

Cash flows from investing activities:








Purchase of property and equipment

(92)

-

(9,152)

Acquisition of subsidiary, net of cash acquired

(13,066)

(13,066)

(30,742)

Advance on account of investment

-

408

-

Investment in equity accounted investees

(4,058)

-

(4,372)

Proceeds from deposits, net

5,153

-

137

Settlement of forward contract

-

-

(169)

Proceeds from restricted cash, net

5,301

-

1,519









Net cash used in investing activities

(6,762)

(12,658)

(42,779)









Cash flows from financing activities:








Repayment of loans

(25,608)

-

(7,818)

Proceeds from loans and Debentures, net

55,791

-

17,692









Net cash provided by financing activities

30,183

-

9,874









 Exchange differences on balances of cash and cash equivalents

(2,225)

(1,709)

462





Increase (decrease) in cash and cash equivalents

22,769

(12,886)

(26,054)

Cash and cash equivalents at the beginning of period

7,238

42,893

33,292





Cash and cash equivalents at the end of the period

30,007

30,007

7,238





 

Reconciliation of Net income to Adjusted EBITDA (in US$ thousands) (Unaudited)






For the nine Months

ended September 30,

For the three Months

ended September 30,

For the year ended

December 31,


2014

2014

2013

Net income for the period 

4,867

5,389

10,087

Financing expenses, net    

3,738

1,216

2,496

Taxes on income

835

757

245

Depreciation

4,070

1,449

4,021

Impairment charges

568

-

-

Gain on bargain purchase

(3,688)

(3,688)

(10,237)

Adjusted EBITDA              

10,390

5,123

6,621

 

 

SOURCE Ellomay Capital Ltd.



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http://www.ellomay.com