3 days Ago By [email protected] (MENAFN)
Financial Highlights Financial Overview for the Nine Months Ended September 30, 2024 ________________________ 1 The revenues presented in the Company's financial results included in this press release are based on IFRS and do not take into account the adjustments included in the Company's investor presentation. CEO Review Third Quarter 2024 Revenues in the first nine months of 2024 were approximately €31.8 million, compared to revenues of approximately €41.
5 million in the corresponding nine months last year. The decrease in revenues was mainly due to the electricity prices in Spain, which were low and even sometimes negative during the first half of 2024. A decrease of approximately €1.
2 million in revenues was recorded due to fire damage that occurred in July 2024 in our projects in Spain. This amount is covered by income loss insurance and therefore recognized as other income during the period. Operating expenses in the first nine months of 2024 decreased by approximately €3 million compared to the corresponding period last year.
Project development expenses in the first nine months of 2024 increased by approximately €0.7 million compared to the corresponding period last year. Project development expenses for 2024 included non-recurring expenses of approximately €0.
5 million in connection with the cancellation of a guarantee. Activity in Spain : The electricity prices in the third quarter of 2024 increased and stabilized on the projected seasonal price. The revenues from the sale of electricity in the first nine months of 2024 were approximately €18.
7 million compared to approximately €27.5 million in the corresponding period last year. The decrease is primarily attributable to the low/negative electricity prices in the first half of 2024, as well as the fire damage.
Activity of Dorad : In the first nine months of 2024, the Dorad power plant recorded an increase in profit, with net profit of approximately NIS 256 million, an increase of approximately NIS 40 million compared to the corresponding period last year. The Dorad power station received the approval of the National Infrastructures Committee and a positive connection survey to increase the capacity by an additional 650 MW. Activity in the USA: In the USA, the development and construction activities of solar projects are progressing at a rapid pace and the construction of the first four projects, with a total capacity of approximately 49 MW, began in early 2024.
The construction of two projects (in an aggregate capacity of approximately 27 MW) is nearing completion and their connection to the electricity grid is expected in the near future. The additional two projects (in an aggregate capacity of approximately 22 MW) are under construction and are expected to connect by April 2025. Additional projects with an aggregate capacity of approximately 50 MW are under development and are intended for construction in 2025.
The Company executed an agreement to sell the tax credits of the first four projects for approximately $19 million. Activity in Italy : The Company has a portfolio of 462 MW solar projects in Italy of which 20 MW are operating and 18 MW finished construction and are awaiting connection to the grid. 195 MW of additional projects are ready to build and 229 MW are under advanced development.
Revenues from sale of electricity in Italy in the third quarter of 2024 were approximately €1.7 million, all from the 20 MW that are connected to the grid. The Company executed construction agreements with the EPC contractor for 160 MW that are ready to build, the commencement of construction is expected during the first quarter of 2025 and the construction is expected to take approximately 18 months.
The EPC agreements are conditioned, among other things, on the execution of a financing agreement, and the financing agreement with a European institutional investor for the financing of the construction of 198 MW (including the connected projects, the project under construction and the projects for which the EPC agreements were executed) previously reported is expected to be executed during January 2025. New legislation in Italy prohibits the establishment of new projects on agricultural land. This prohibition increases the value of the Company's portfolio, which is not subject to the prohibition or located on agricultural land.
The Company estimates that new possibilities are emerging for obtaining a PPA in Italy, therefore it expects that project financing will be possible more easily and at lower costs. Activity in Israel : The Manara Cliff Pumped Storage Project (Company's share is 83.34%): A project with a capacity of 156 MW, which is in advanced construction stages.
The Iron Swords War, which commenced on October 7, 2023, stopped the construction work on the project. The project has protection from the state for damages and losses due to the war within the framework of the tariff regulation (covenants that support financing). The project was expected to reach commercial operation during the first half of 2027 and the continuation of the Iron Swords war will cause a delay in the date of activation.
The Israeli Electricity Authority currently approved a postponement of sixteen months of the dates for the project. The Company and its partner in the project, Ampa, invested the equity required for the project (other than linkage differences), and the remainder of the funding is from a consortium of lenders led by Mizrahi Bank, at a scope of approximately NIS 1.18 billion.
Development of Solar licenses combined with storage: The Company also has approximately 46 solar MW under preliminary planning stages. Activity in the Netherlands : During the first nine months of 2024, high production levels were maintained in the Company's three biogas plants. In addition, significant progress was made in the process of obtaining the licenses to increase production by about 50% in each of the Company's plants.
Increasing production will require relatively small investments and is expected to significantly increase income and EBITDA. Following the directive of the European Union to act to significantly increase the production of greed gas, the Dutch parliament approved the legislation mandating the obligation to mix green gas with fossil gas , which will become effective commencing January 1, 2026. This legislation is expected to have a positive effect on the prices of green gas and the price of the accompanying green certificates.
Use of Non-IFRS Financial Measures EBITDA is a non-IFRS measure and is defined as earnings before financial expenses, net, taxes, depreciation and amortization. The Company presents this measure in order to enhance the understanding of the Company's operating performance and to enable comparability between periods. While the Company considers EBITDA to be an important measure of comparative operating performance, 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.
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 EBITDA in the same manner, and the measure as presented may not be comparable to similarly-titled measure presented by other companies. The Company's EBITDA may not be indicative of the Company's historic operating results; nor is it meant to be predictive of potential future results.
The Company uses this measure internally as performance measure and believes that when this measure is combined with IFRS measure it add useful information concerning the Company's operating performance. A reconciliation between results on an IFRS and non-IFRS basis is provided on page 14 of this press release. About Ellomay Capital Ltd.
Ellomay is an Israeli based company whose shares are registered with the NYSE American and with the Tel Aviv Stock Exchange under the trading symbol“ELLO”. Since 2009, Ellomay Capital focuses its business in the renewable energy and power sectors in Europe, USA and Israel. To date, Ellomay has evaluated numerous opportunities and invested significant funds in the renewable, clean energy and natural resources industries in Israel, Italy, Spain, the Netherlands and Texas, USA, including: For more information about Ellomay, visit .
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 the Company's forward-looking statements, including changes in electricity prices and demand, regulatory changes increases in interest rates and inflation, changes in the supply and prices of resources required for the operation of the Company's facilities (such as waste and natural gas) and in the price of oil, the impact of the war and hostilities in Israel and Gaza, the impact of the continued military conflict between Russia and Ukraine, technical and other disruptions in the operations or construction of the power plants owned by the Company and general market, political and economic conditions in the countries in which the Company operates, including Israel, Spain, Italy and the United States. 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 Rubenbach (Weintraub) CFO Tel: +972 (3) 797-1111 Email: ..
. Ellomay Capital Ltd. and its Subsidiaries * Convenience translation into US$ (exchange rate as at September 30, 2024: euro 1 = US$ 1.
119) Ellomay Capital Ltd. and its Subsidiaries * The results of the Talmei Yosef solar plant have been reclassified as a discontinued operation and the results for these periods have been adjusted accordingly ** Convenience translation into US$ (exchange rate as at September 30, 2024: euro 1 = US $ 1.119) Ellomay Capital Ltd.
and its Subsidiaries * Convenience translation into US$ (exchange rate as at September 30, 2024: euro 1 = US$ 1.119) Ellomay Capital Ltd. and its Subsidiaries Ellomay Capital Ltd.
and its Subsidiaries Unaudited Condensed Consolidated Interim Statements of Changes in Equity (cont'd) Attributable to shareholders of the Company Ellomay Capital Ltd. and its Subsidiaries Ellomay Capital Ltd. and its Subsidiaries * Convenience translation into US$ (exchange rate as at September 30, 2024: euro 1 = US$ 1.
119) Ellomay Capital Ltd. and its Subsidiaries ________________________ 2 The gross profit of the Talmei Yosef solar plant located in Israel is adjusted to include income from the sale of electricity (approximately €1,264 thousand) and depreciation expenses (approximately €757 thousand) under the fixed asset model, which were not recognized as revenues and depreciation expenses, respectively, under the financial asset model as per IFRIC 12. * The results of the Talmei Yosef solar plant are presented as a discontinued operation.
Ellomay Capital Ltd. and its Subsidiaries * Convenience translation into US$ (exchange rate as at September 30, 2024: euro 1 = US$ 1.119) Ellomay Capital Ltd.
Financial Covenants Pursuant to the Deeds of Trust governing the Company's Series C, Series D, Series E and Series F Debentures (together, the“ Debentures ”), the Company is required to maintain certain financial covenants. For more information, see Items 4.A and 5.
B of the Company's Annual Report on Form 20-F submitted to the Securities and Exchange Commission on April 18, 2024, and below. Net Financial Debt As of September 30, 2024, the Company's Net Financial Debt, (as such term is defined in the Deeds of Trust of the Company's Debentures), was approximately €115 million (consisting of approximately €303.23 million of short-term and long-term debt from banks and other interest bearing financial obligations, approximately €165.
94 million in connection with the Series C Debentures issuances (in July 2019, October 2020, February 2021 and October 2021), the Series D Convertible Debentures issuance (in February 2021), the Series E Secured Debentures issuance (in February 2023) and the Series F Debentures issuance (in January 2024, April 2024 and August 2024)), net of approximately €50.9 million of cash and cash equivalents, short-term deposits and marketable securities and net of approximately €303.25 million of project finance and related hedging transactions of the Company's subsidiaries).
The Net Financial Debt and other information included in this disclosure do not include the private placement of Series F Debentures consummated in November 2024. Discussion concerning Warning Signs Upon the issuance of the Company's Debentures, the Company undertook to comply with the“hybrid model disclosure requirements” as determined by the Israeli Securities Authority and as described in the Israeli prospectuses published in connection with the public offering of the company's Debentures. This model provides that in the event certain financial“warning signs” exist in the Company's consolidated financial results or statements, and for as long as they exist, the Company will be subject to certain disclosure obligations towards the holders of the Company's Debentures.
One possible“warning sign” is the existence of a working capital deficiency if the Company's Board of Directors does not determine that the working capital deficiency is not an indication of a liquidity problem. In examining the existence of warning signs as of September 30, 2024, the Company's Board of Directors noted the working capital deficiency as of September 30, 2024, in the amount of approximately €10.8 million.
The Company's Board of Directors reviewed the Company's financial position, outstanding debt obligations and the Company's existing and anticipated cash resources and uses and determined that the existence of a working capital deficiency as of September 30, 2024, does not indicate a liquidity problem. In making such determination, the Company's Board of Directors noted the following: (i) the issuance of additional Series F Debentures in consideration for approximately NIS 62.2 million, which was completed after September 30, 2024 and therefore not reflected on the Company's balance sheet, (ii) the execution of the agreement to sell tax credits in connection with the US solar projects, which is expected to contribute approximately $19 million during the next twelve months, and (iii) the positive cash flow generated by the Company's operating subsidiaries during the year ended December 31, 2023 and the nine months ended September 30, 2024.
________________________ 3 The amount of short-term and long-term debt from banks and other interest-bearing financial obligations provided above, includes an amount of approximately €4.7 million costs associated with such debt, which was capitalized and therefore offset from the debt amount that is recorded in the Company's balance sheet. 4 The amount of the debentures provided above includes an amount of approximately €6.
8 million associated costs, which was capitalized and discount or premium and therefore offset from the debentures amount that is recorded in the Company's balance sheet. This amount also includes the accrued interest as at September 30, 2024 in the amount of approximately €0.4 million.
5 The project finance amount deducted from the calculation of Net Financial Debt includes project finance obtained from various sources, including financing entities and the minority shareholders in project companies held by the Company (provided in the form of shareholders' loans to the project companies). Ellomay Capital Ltd. Information for the Company's Series C Debenture Holders The Deed of Trust governing the Company's Series C Debentures (as amended on June 6, 2022, the“ Series C Deed of Trust ”), includes an undertaking by the Company to maintain certain financial covenants, whereby a breach of such financial covenants for two consecutive quarters is a cause for immediate repayment.
As of September 30, 2024, the Company was in compliance with the financial covenants set forth in the Series C Deed of Trust as follows: (i) the Company's Adjusted Shareholders' Equity (as defined in the Series C Deed of Trust) was approximately €118.5 million, (ii) the ratio of the Company's Net Financial Debt (as set forth above) to the Company's CAP, Net (defined as the Company's Adjusted Shareholders' Equity plus the Net Financial Debt) was 49.2%, and (iii) the ratio of the Company's Net Financial Debt to the Company's Adjusted EBITDA,6 was 8.
7 The following is a reconciliation between the Company's loss and the Adjusted EBITDA (as defined in the Series C Deed of Trust) for the four-quarter period ended September 30, 2024: ________________________ 6 The term“Adjusted EBITDA” is defined in the Series C Deed of Trust as earnings before financial expenses, net, taxes, depreciation and amortization, where the revenues from the Company's operations, such as the Talmei Yosef solar plant, are calculated based on the fixed asset model and not based on the financial asset model (IFRIC 12), and before share-based payments. The Series C Deed of Trust provides that for purposes of the financial covenant, the Adjusted EBITDA will be calculated based on the four preceding quarters, in the aggregate. The Adjusted EBITDA is presented in this press release as part of the Company's undertakings towards the holders of its Series C Debentures.
For a general discussion of the use of non-IFRS measures, such as EBITDA and Adjusted EBITDA see above under“Use of NON-IFRS Financial Measures.” 7 The Deed of Trust governing our Series C Debentures provides that in the event the original accounting standards (i.e.
, the accounting standards applicable to the Company's financial results for March 31, 2019), undergo a“material revision” (defined as a change of at least 10% in the aggregate between the calculation of financial covenants according to the revised accounting standards compared to the original accounting standards), the financial covenants will be implemented based on the original accounting standards. Subsequent to the issuance of the Series C Debentures, the Company implemented an amendment to IAS 16 (“Property, Plant and Equipment”), which requires the Company to recognize revenues from newly connected solar facilities commencing the connection to the grid and not commencing PAC as required under the original accounting standards. Therefore, the Company's Adjusted EBITDA based on current accounting standards includes the results of solar plants in Italy that were connected to the grid during the nine months ended September 30, 2024 but have not achieved PAC as of September 30, 2024.
As the change between the ratio of Net Financial Debt to Adjusted EBITDA based on current accounting standards, compared to the same ratio based on the original accounting standards constitutes a“material change” as of September 30, 2024, the Company provides herein the calculation of Adjusted EBITDA and Net Financial Debt to Adjusted EBITDA based on the original accounting standards, by eliminating the results of the Italian solar facilities from the calculation of Adjusted EBITDA. Ellomay Capital Ltd. Information for the Company's Series D Debenture Holders The Deed of Trust governing the Company's Series D Debentures includes an undertaking by the Company to maintain certain financial covenants, whereby a breach of such financial covenants for the periods set forth in the Series D Deed of Trust is a cause for immediate repayment.
As of September 30, 2024, the Company was in compliance with the financial covenants set forth in the Series D Deed of Trust as follows: (i) the Company's Adjusted Shareholders' Equity (as defined in the Series D Deed of Trust) was approximately €118.5 million, (ii) the ratio of the Company's Net Financial Debt (as set forth above) to the Company's CAP, Net (defined as the Company's Adjusted Shareholders' Equity plus the Net Financial Debt) was 49.2%, and (iii) the ratio of the Company's Net Financial Debt to the Company's Adjusted EBITDA8 was 8.
9 The following is a reconciliation between the Company's loss and the Adjusted EBITDA (as defined in the Series D Deed of Trust) for the four-quarter period ended September 30, 2024: ________________________ 8 The term“Adjusted EBITDA” is defined in the Series D Deed of Trust as earnings before financial expenses, net, taxes, depreciation and amortization, where the revenues from the Company's operations, such as the Talmei Yosef PV Plant, are calculated based on the fixed asset model and not based on the financial asset model (IFRIC 12), and before share-based payments, when the data of assets or projects whose Commercial Operation Date (as such term is defined in the Series D Deed of Trust) occurred in the four quarters that preceded the relevant date will be calculated based on Annual Gross Up (as such term is defined in the Series D Deed of Trust). The Series D Deed of Trust provides that for purposes of the financial covenant, the Adjusted EBITDA will be calculated based on the four preceding quarters, in the aggregate. The Adjusted EBITDA is presented in this press release as part of the Company's undertakings towards the holders of its Series D Debentures.
For a general discussion of the use of non-IFRS measures, such as EBITDA and Adjusted EBITDA see above under“Use of NON-IFRS Financial Measures.” 9 The Deed of Trust governing our Series D Debentures provides that in the event the original accounting standards (i.e.
, the accounting standards applicable to the Company's financial results for September 30, 2020), undergo a“material revision” (defined as a change of at least 7.5% in the aggregate between the calculation of financial covenants according to the revised accounting standards compared to the original accounting standards), the financial covenants will be implemented based on the original accounting standards. Subsequent to the issuance of the Series D Debentures, the Company implemented an amendment to IAS 16 (“Property, Plant and Equipment”), which requires the Company to recognize revenues from newly connected solar facilities commencing the connection to the grid and not commencing PAC as required under the original accounting standards.
Therefore, the Company's Adjusted EBITDA based on current accounting standards includes the results of solar plants in Italy that were connected to the grid during the nine months ended September 30, 2024 but have not achieved PAC as of September 30, 2024. As the change between the ratio of Net Financial Debt to Adjusted EBITDA based on current accounting standards, compared to the same ratio based on the original accounting standards constitutes a“material change” as of September 30, 2024, the Company provides herein the calculation of Adjusted EBITDA and Net Financial Debt to Adjusted EBITDA based on the original accounting standards, by eliminating the results of the Italian solar facilities from the calculation of Adjusted EBITDA. Ellomay Capital Ltd.
Information for the Company's Series E Debenture Holders The Deed of Trust governing the Company's Series E Debentures includes an undertaking by the Company to maintain certain financial covenants, whereby a breach of such financial covenants for the periods set forth in the Series E Deed of Trust is a cause for immediate repayment. As of September 30, 2024, the Company was in compliance with the financial covenants set forth in the Series E Deed of Trust as follows: (i) the Company's Adjusted Shareholders' Equity (as defined in the Series E Deed of Trust) was approximately €118.5 million, (ii) the ratio of the Company's Net Financial Debt (as set forth above) to the Company's CAP, Net (defined as the Company's Adjusted Shareholders' Equity plus the Net Financial Debt) was 49.
2%, and (iii) the ratio of the Company's Net Financial Debt to the Company's Adjusted EBITDA10 was 6.6. The following is a reconciliation between the Company's loss and the Adjusted EBITDA (as defined in the Series E Deed of Trust) for the four-quarter period ended September 30, 2024: In connection with the undertaking included in Section 3.
17.2 of Annex 6 of the Series E Deed of Trust, no circumstances occurred during the reporting period under which the rights to loans provided to Ellomay Luzon Energy Infrastructures Ltd. (formerly U.
Dori Energy Infrastructures Ltd. (“ Ellomay Luzon Energy ”)), which were pledged to the holders of the Company's Series E Debentures, will become subordinate to the amounts owed by Ellomay Luzon Energy to Israel Discount Bank Ltd. ________________________ 10 The term“Adjusted EBITDA” is defined in the Series E Deed of Trust as earnings before financial expenses, net, taxes, depreciation and amortization, where the revenues from the Company's operations, such as the Talmei Yosef PV Plant, are calculated based on the fixed asset model and not based on the financial asset model (IFRIC 12), and before share-based payments, when the data of assets or projects whose Commercial Operation Date (as such term is defined in the Series E Deed of Trust) occurred in the four quarters that preceded the relevant date will be calculated based on Annual Gross Up (as such term is defined in the Series E Deed of Trust).
The Series E Deed of Trust provides that for purposes of the financial covenant, the Adjusted EBITDA will be calculated based on the four preceding quarters, in the aggregate. The Adjusted EBITDA is presented in this press release as part of the Company's undertakings towards the holders of its Series E Debentures. For a general discussion of the use of non-IFRS measures, such as EBITDA and Adjusted EBITDA see above under“Use of NON-IFRS Financial Measures.
” 11 The adjustment is based on the results of solar plants in Italy that were connected to the grid and commenced delivery of electricity to the grid during the nine months ended September 30, 2024. As these solar plants have not reached PAC (Preliminary Acceptance Certificate) as of September 30, 2024, the Company recorded revenues and only direct expenses in connection with these solar plants. However, for the sake of caution, the Company included the expected fixed expenses in connection with these solar plants in the calculation of the adjustment.
As of September 30, 2024, the value of the assets pledged to the holders of the Series E Debentures in the Company's books (unaudited) is approximately €35 million (approximately NIS 145.3 million based on the exchange rate as of such date). Ellomay Capital Ltd.
and its Subsidiaries Information for the Company's Series F Debenture Holders The Deed of Trust governing the Company's Series F Debentures includes an undertaking by the Company to maintain certain financial covenants, whereby a breach of such financial covenants for the periods set forth in the Series F Deed of Trust is a cause for immediate repayment. As of September 30, 2024, the Company was in compliance with the financial covenants set forth in the Series F Deed of Trust as follows: (i) the Company's Adjusted Shareholders' Equity (as defined in the Series F Deed of Trust) was approximately €118.1 million, (ii) the ratio of the Company's Net Financial Debt (as set forth above) to the Company's CAP, Net (defined as the Company's Adjusted Shareholders' Equity plus the Net Financial Debt) was 49.
3%, and (iii) the ratio of the Company's Net Financial Debt to the Company's Adjusted EBITDA12 was 6.6. The following is a reconciliation between the Company's loss and the Adjusted EBITDA (as defined in the Series F Deed of Trust) for the four-quarter period ended September 30, 2024: ________________________ 12 The term“Adjusted EBITDA” is defined in the Series F Deed of Trust as earnings before financial expenses, net, taxes, depreciation and amortization, where the revenues from the Company's operations, such as the Talmei Yosef PV Plant, are calculated based on the fixed asset model and not based on the financial asset model (IFRIC 12), and before share-based payments, when the data of assets or projects whose Commercial Operation Date (as such term is defined in the Series F Deed of Trust) occurred in the four quarters that preceded the relevant date will be calculated based on Annual Gross Up (as such term is defined in the Series F Deed of Trust).
The Series F Deed of Trust provides that for purposes of the financial covenant, the Adjusted EBITDA will be calculated based on the four preceding quarters, in the aggregate. The Adjusted EBITDA is presented in this press release as part of the Company's undertakings towards the holders of its Series F Debentures. For a general discussion of the use of non-IFRS measures, such as EBITDA and Adjusted EBITDA see above under“Use of Non-IFRS Financial Measures.
” 13 The adjustment is based on the results of solar plants in Italy that were connected to the grid and commenced delivery of electricity to the grid during the nine months ended September 30, 2024. As these solar plants have not reached PAC (Preliminary Acceptance Certificate) as of September 30, 2024, the Company recorded revenues and only direct expenses in connection with these solar plants. However, for the sake of caution, the Company included the expected fixed expenses in connection with these solar plants in the calculation of the adjustment.
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