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Sep 30, 2021
Genie Energy Q3 2021 Earnings Report
Genie Energy announced record gross margin, gross profit, and Adjusted EBITDA, with Genie Retail Energy achieving record operating profitability.
Key Takeaways
Genie Energy reported strong Q3 2021 results, driven by exceptional performance in both U.S. and Scandinavian energy supply businesses and robust customer demand in Genie Renewables. The company is withdrawing from the U.K. retail market due to structural market limitations.
GRE delivered record levels of gross profit, income from operations and Adjusted EBITDA for the quarter driven by strong margins in the retail book and mark-to-market increases.
Genie recorded a $1.9 million credit to the cost of sales reflecting expected reimbursement from the State of Texas for charges imposed by ERCOT during the severe winter storm in February 2021.
Operationally, GRE served 336,000 RCEs at September 30, 2021, a 2.0% increase sequentially and a 3.9% decrease year over year.
Genie Renewables reported a higher gross margin and improved overall results as it shifted to higher-margin solar projects.
Genie Energy
Genie Energy
Forward Guidance
Genie is positioned to mitigate foreseeable volatility in wholesale energy prices through its risk-management program including hedging and forward commodity contract positioning. The company expects to generate robust margins from its retail supply businesses and reduce supply requirements by narrowing its customer acquisition program to higher margin customers.
Positive Outlook
- Genie is positioned to mitigate foreseeable volatility in wholesale energy prices through its risk-management program including hedging and forward commodity contract positioning.
- Genie expects to generate robust margins from its retail supply businesses.
- Genie expects to reduce supply requirements by narrowing its customer acquisition program to higher margin customers.
- This strategy optimizes margins while dampening customer acquisition expense.
- Management believes the Company is well positioned to deliver strong fourth quarter results.
Challenges Ahead
- Planned orderly withdrawal from U.K. retail market underway.
- Orbit Energy’s loss from operations was $16.4 million for the quarter, including a $6.7 million ($0.26 cents per share) impairment of assets
- GRE served 336,000 RCEs at September 30, 2021, a 2.0% increase sequentially and a 3.9% decrease year over year.
- In Scandanavia, GREI curtailed meter acquisition in a rising commodity price environment, leading to increased profitability and a decrease in meters served during the quarter.
- Genie has suspended the planned spin-off of its international operations in the U.K. and Scandinavia following the deterioration of the U.K. energy market