Tel-Aviv, Israel, March 31, 2023 – Ellomay Capital Ltd. (NYSE American; TASE:
ELLO) (“Ellomay” or the “Company”), a renewable energy and power generator and
developer of renewable energy and power projects in Europe and Israel, today reported its
unaudited financial results for the fourth quarter and year ended December 31, 2022.
Financial Highlights for the Year Ended December 31, 2022
• Revenues were approximately €53.41 million for the year ended December 31, 2022,
compared to approximately €45.7 million for the year ended December 31, 2021. This
increase mainly results from the substantial increase in electricity prices in Spain and the
connection to the grid of Ellomay Solar, a 28 MW photovoltaic facility in Spain
(“Ellomay Solar”) during June 2022, upon which the Company commenced recognition
• Operating expenses were approximately €24.1 million for the year ended December 31,
2022, compared to approximately €17.6 million for the year ended December 31, 2021.
The increase in operating expenses mainly results from the implementation of the
Spanish RDL 17/2021, commencing September 16, 2021 and currently in effect until
December 31, 2023, that established the reduction of returns on the electricity generating
activity of Spanish production facilities that do not emit greenhouse gases accomplished
through payments of a portion of the revenues by the production facilities to the Spanish
government. The increase in operating expenses also resulted from the Company’s
biogas operations in the Netherlands that were impacted by the military conflict between
Russia and Ukraine causing shortages in certain raw materials and an increase in delivery
prices, and from the connection to the grid of Ellomay Solar during June 2022, upon
which the Company commenced recognition of expenses. Depreciation expenses were
approximately €16.1 million for the year ended December 31, 2022, compared to
approximately €15.1 million for the year ended December 31, 2021. The increase in
depreciation and amortization expenses is mainly attributable to the commencement of
recognition of results of Ellomay Solar upon connection to the Spanish grid in June 2022.
• Project development costs were approximately €3.8 million for the year ended December
31, 2022, compared to approximately €2.5 million for the year ended December 31,
- The increase in project development costs is mainly due to development expenses
in connection with photovoltaic projects in Italy and Israel.
• General and administrative expenses were approximately €5.9 million for the year ended
December 31, 2022, compared to approximately €5.7 million for the year ended
December 31, 2021. The increase is mostly due to an increase in the management fee
The revenues are based on IFRS and do not take into account the adjustments included in the
Company’s investor presentation.
paid pursuant to the new Management Services Agreement effective July 1, 2021, and
an increase in salaries paid to employees.
• The Company’s share of profits of equity accounted investee, after elimination of
intercompany transactions, was approximately €1.2 million for the year ended December
31, 2022, compared to approximately €0.12 million for the year ended December 31,
- The increase in share of profits of equity accounted investee was mainly due to the
increase in revenues of Dorad Energy Ltd. (“Dorad”) due to higher quantities produced
and a higher electricity tariff, partially offset by an increase in operating expenses in
connection with the increased production and higher tariff.
• Financing expenses, net were approximately €2.5 million for the year ended December
31, 2022, compared to approximately €26.9 million for the year ended December 31,
- The decrease in financing expenses, net, was mainly attributable to income
resulting from exchange rate differences amounting to approximately €6 million in the
year ended December 31, 2022, mainly in connection with the New Israeli Shekel
(“NIS”) cash and cash equivalents and the Company’s NIS denominated debentures,
compared to expenses in the amount of approximately €5.4 million for the year ended
December 31, 2021, caused by (i) the 6.6% devaluation of the NIS against the euro
during the year ended December 31, 2022, compared to the 10.8% revaluation of the NIS
against the euro during the year ended December 31, 2021, and (ii) expenses recorded in
2021 of approximately €0.8 million in connection with the early repayment of the
Company’s Series B Debentures. In addition, during the year ended December 31, 2021,
we recorded financing expenses in the amount of approximately €12.2 million in
connection with the amortization of the outstanding balance of expenses that were
capitalized to the previous financing of Talasol Solar S.L.U (“Talasol”), our majority
owned subsidiary (51%) that owns a photovoltaic plant with a peak capacity of 300 MW
in the municipality of Talaván, Cáceres, Spain (“Talasol PV Plant”) in connection with
a refinancing of its debt and approximately €3.3 million recorded in connection with the
termination of an interest rate swap contract.
• Taxes on income were approximately €2.1 million in the year ended December 31, 2022,
compared to a tax benefit of approximately €2.3 million in the year ended December 31,
- The tax increase is mainly due to the substantial increase in electricity prices in
Spain, resulting in higher taxable income of the Company’s Spanish subsidiaries.
• Net profit was approximately €0.1 million in the year ended December 31, 2022,
compared to net loss of approximately €19.6 million for the year ended December 31,
• Total other comprehensive loss was approximately €35.3 million for the year ended
December 31, 2022, compared to total other comprehensive loss of approximately €4.5
million in the year ended December 31, 2021. The increase in total other comprehensive
loss mainly resulted from foreign currency translation differences on NIS denominated
operations, as a result of fluctuations in the euro/NIS exchange rates and from changes
in fair value of cash flow hedges, including a material increase in the fair value of the
liability resulting from the financial power swap that covers approximately 80% of the
output of the Talasol PV Plant (the “Talasol PPA”).
The Talasol PPA experienced a high volatility due to the substantial increase in
electricity prices in Europe since the commencement of the military conflict between
Russia and Ukraine. In accordance with hedge accounting standards, the changes in the
Talasol PPA’s fair value are recorded in the Company’s shareholders’ equity through a
hedging reserve and not through the accumulated deficit/retained earnings. The changes
do not impact the Company’s consolidated net profit/loss or the Company’s consolidated
cash flows. As the Company controls Talasol, the total impact of the changes in fair
value of the Talasol PPA (including the minority share) is consolidated into the
Company’s financial statements and total equity. Alongside the increase in fair value of
the liability in connection with the Talasol PPA, the increase in the electricity prices had,
and is expected to continue to have for as long as the prices remain relatively high, a
positive impact on Talasol’s revenues from the sale of the capacity that is not subject to
the Talasol PPA, resulting in an expected increase in Talasol’s net income and cash
• Total comprehensive loss was approximately €35.2 million in the year ended December
31, 2022, compared to total comprehensive loss of approximately €24.1 million in the
year ended December 31, 2021.
• EBITDA was approximately €20.8 million for the year ended December 31, 2022,
compared to approximately €20.1 million for the year ended December 31, 2021.
• Net cash from operating activities was approximately €11.3 million for the year ended
December 31, 2022, compared to net cash from operating activities of approximately
€16.1 million for the year ended December 31, 2021.
• As required under an amendment to IAS 16, “Property, Plant and Equipment” (the “IAS
16 Amendment”), the Company retrospectively applied the IAS 16 Amendment and
revised the financial results as of and for the year ended December 31, 2021. The IAS
16 Amendment required the Company to recognize the results of the Talasol PV Plant
commencing connection to the grid (December 2020) instead of recognizing results
commencing achievement of PAC (Preliminary Acceptance Certificate), which occurred
on January 27, 2021. The revisions mainly included an increase in the balance of fixed
assets against a corresponding increase in retained earnings and deferred tax as of
December 31, 2021, and an increase in revenues and expenses, with a corresponding
decrease in tax benefit and in the net loss for the year ended December 31, 2021.
CEO Review for 2022
The Company’s activities are divided into two main fields:
- Development and Construction – the development of a backlog of projects in the PV
field in Italy, Spain, USA and Israel, the construction of a pumped hydro storage project
in the Manara Cliff in Israel and the construction of PV in Italy; and
- Operations and Improvements – the Company manages, operates and improves its
generating projects in Israel, Spain and the Netherlands (bio-gas).
The Company’s revenues for 2022 were approximately €53.3, an increase of approximately
17% in revenues compared to the same period last year. These revenues are slightly lower
than the anticipated revenues for the period, mainly as during the fourth quarter of 2022 there
was a decrease in electricity prices in Spain (even though such prices increased overall during
2022) and lower radiation. The average electricity price in Spain during the fourth quarter of
2022 was approximately €0.11/kWh, compared to an average price of €0.20/kWh during
- Due to existing regulation in Spain that effectively reduces returns on electricity
generating activity to no more than approximately €0.11/kWh, the decrease in revenues did
not impact the Company’s operating profit. Due to lower radiation during the fourth quarter
of 2022, the electricity produced by the Talasol PV Plant was lower by approximately 24,000
MW compared to the fourth quarter of 2021. The lower production impacted the electricity
that is not subject to the Talasol PPA and would have been sold in market prices
As a result of the lower radiation during 2022, Talasol produced approximately 33,000 MW
less than its expected average annual production. Due to the existing Spanish regulation,
these 33,000 MW would have been sold at an effective price of €0.11/kWh and therefore
caused a decrease in gross profit of approximately €3.6 million.
Due to the military conflict in Ukraine, the prices of the energy, transportation and raw
materials used by the biogas operations in the Netherlands increased by approximately €2.74
million compared to 2021 and the Company expects that the increase in expenses will be
mitigated by higher gas and green certificate prices during 2023.
The cash flow from operations for 2022 was approximately €11.3 million, which includes a
deduction of approximately €3.3 million due to a non-recurring advance payment of income
tax as per a tax assessment agreement (timing differences of payable income tax) to the
Israeli Tax Authority in connection with the Talmei Yosef PV Plant and increased project
development costs mainly due to the advanced development of the photovoltaic portfolio in
Italy and in Israel.
Activity in Spain: The Ellomay Solar PV plant in Spain (28 MW PV) was connected to the
electricity grid towards the end of the second quarter of 2022. Commencing the third quarter
of 2022, this PV plant operated at full capacity and generated revenues of approximately
€3.6 million during 2022.
The Talasol PV plant in Spain (300 MW PV), 51% held by the Company, generated revenues
in the amount of approximately €33 million for 2022 .
Talasol is a party to a financial hedge of its electricity capture price (PPA) in connection with
approximately 80% of its production (75% based on P-50) and the remaining electricity
produced by Talasol is sold directly to the grid, currently at an average price of €0.11/kWh.
Activity in Italy: The Company has approximately 600 MW PV projects under advanced
development stages, of which licenses have been obtained for approximately 200 MW. Of
these 200 MW PV projects, 20 MW are under advanced construction and the remainder
(approximately 180 MW) are expected to commence construction during 2023.
The Company has additional projects in earlier development stages and the intention is to
reach a portfolio of approximately 1,000 MW PV in various degrees of development and
operations by 2025.
The Company is negotiating a financing agreement for the financing of 600 MW PV projects
that are in advanced development stages with a leading European bank in the field.
Activity in Israel:
The Manara Pumped Storage Project (Company’s share is 83.34%): The Manara Cliff
pumped storage project, with a capacity of 156 MW, is in advanced construction stages and
expected to reach commercial operation during the second half of 2026. The Company and
the project’s other shareholder, Ampa, invested the equity required for the projects, 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 PV licenses combined with storage:
- The Komemiyut project, intended for 21 MW PV and 47 MW / hour batteries. The
project obtained an approval for connection to the grid and is in the process of receiving
a building permit. Construction is planned to commence in the third quarter of 2023.
- The Qelahim project, intended for 15 MW PV and 33 MW / hour batteries. The project
obtained an approval for connection to the grid, and is in the final stages of the zoning
These projects are based on a tender the Company won and there is an option of transition
to regulation that enables sale to end customers.
- The Talmei Yosef project, an expansion of the existing project (as of today 9 MW PV)
to 104 dunams, intended for 10 MW PV and 22 MW / hour batteries. The request for
zoning approval has been filed and approval is expected to be received in the second
quarter of 2023.
- The Talmei Yosef storage project in batteries, which obtained zoning approval for 30
dunam, intended for approximately 400 MW / hour. The project is designed for the
regulation of the high voltage storage.
- The Sharsheret project, intended for 20 MW PV and 44 MW / hour batteries. The zoning
request for was submitted.
- Additional 250 dunams – under advanced planning stages.
Dorad Power Station (Company’s share is approximately 9.4%): the gas flow from the
Karish reservoir began during November 2022. The gas from the Karish reservoir is expected
to reduce the gas costs of Dorad. In addition, the change in the electricity tariff, which entered
into force in January 2023, means an increase in the “PISGA”/ peak (high consumption)
hours, and the elimination of the “GEVA” (average consumption) hours, is expected to
reduce the operating expenses of the power station without decreasing the revenues.
Activity in the Netherlands: In connection with the military conflict in Ukraine and the
stoppage of Russian gas supply to Europe, there are substantial changes in the field of biogas
in the Netherlands and Europe. Europe in general and the Netherlands specifically have set
ambitious goals for increasing gas production from waste. Various incentives are being
considered, the main one is increasing the price of the green certificates and as of today the
market price of these certificates has increased from an average of 13–15 euro cents per cubic
meter to around 30-45 euro cents per cubic meter and future increases are currently projected.
The gas price for 2023, which is determined based on the 2022 average, was set at €1.13 per
cubic meter, a price that is higher than the cap of the subsidy granted to the Company’s Dutch
subsidiaries (approximately €0.75 per cubic meter). Therefore, in 2023 and possibly also in
2024, the Dutch subsidiaries will temporarily exit the subsidy regime. Not using the subsidy
during 2023 and 2024 will enable the Dutch subsidiaries to postpone the termination of the
subsidy period (originally 12 years) by two years.
On the other hand, due to the military conflict in Ukraine, during 2022 there was an increase
in the price of feedstock, which is based on agricultural residues, and in the cost of
transportation and the price of electricity (which increased tenfold). These circumstances
caused an increase in expenses. As of the beginning of 2023, the feedstock prices and
transportation costs are in decline and there is no shortage of raw material of any kind.
The increase in electricity prices in the Netherlands did not substantially impact two of the
three biogas facilities owned by the Company, which produce the electricity and heat they
consume for themselves. However, the Gelderland project, which was acquired in December
2020, was not equipped with the means to self-generate electricity and heat during 2022 and
was required to pay expensive prices for the electricity it consumes and to purchase
expensive gas for heating, which caused an increase in expenses of approximately €1 million
compared to forecasts. In May 2022, Gelderland received notification of approval for a
subsidy for generation of electricity and heat in its facility, in August 2022 a generator (CHP)
was ordered, which is being installed and expected to commence operating during the
The expected increase in revenues during 2023, caused by the increase in green certificate
and gas prices, combined with the expected decrease in feedstock and transportation costs
and the reduction of the energy costs in the Gelderland facility are expected to improve the
operating results of the biogas facilities.
The Company estimates that with the increasing importance of the biogas field, this field
entered into a new era. In the Netherlands, new legislation was adopted that obliges the gas
suppliers commencing January 1, 2024 to gradually incorporate green gas in a scope of up
to 20% of the amount supplied by them. This legislation, and the growing demand for green
certificates from the biogas industry, is expected to add and improve the expected results of
the biogas segment of the Company.
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 16 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
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:
• Approximately 35.9 MW of photovoltaic power plants in Spain and a photovoltaic
power plant of approximately 9 MW in Israel;
• 9.375% indirect interest in Dorad Energy Ltd., which owns and operates one of
Israel’s largest private power plants with production capacity of approximately
860MW, representing about 6%-8% of Israel’s total current electricity consumption;
• 51% of Talasol, which owns a photovoltaic plant with a peak capacity of 300MW in
the municipality of Talaván, Cáceres, Spain;
• Groen Gas Goor B.V., Groen Gas Oude-Tonge B.V. and Groen Gas Gelderland
B.V., project companies operating anaerobic digestion plants in the Netherlands,
with a green gas production capacity of approximately 3 million, 3.8 million and 9.5
million Nm3 per year, respectively;
• 83.333% of Ellomay Pumped Storage (2014) Ltd., which is involved in a project to
construct a 156 MW pumped storage hydro power plant in the Manara Cliff, Israel;
• Ellomay Solar Italy One SRL and Ellomay Solar Italy Two SRL that are constructing
photovoltaic plants with installed capacity of 14.8 MW and 4.95 MW respectively,
in the Lazio Region, Italy; and
• Ellomay Solar Italy Four SRL, Ellomay Solar Italy Five SRL and Ellomay Solar Italy
Ten SRL that are developing photovoltaic projects with installed capacity of 15.06
MW, 87.2 MW and 18 MW respectively, in the Lazio Region, Italy that have reached
“ready to build” status.
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 the Company’s forward-looking statements, including the impact
of continued military conflict between Russia and Ukraine, including its impact on electricity
prices, availability of raw materials and disruptions in supply changes, the impact of the
Covid-19 pandemic on the Company’s operations and projects, including in connection with
steps taken by authorities in countries in which the Company operates, changes in the market
price of electricity and in demand, regulatory changes, including extension of current or
approval of new rules and regulations increasing the operating expenses of manufacturers of
renewable energy in Spain, 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, and technical and other disruptions in the operations or
construction of the power plants owned by the Company. 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.
Kalia Rubenbach (Weintraub)
Tel: +972 (3) 797-1111
Ellomay Capital L