Ellomay Capital Reports Results for the Three and Six Months Ended June 30, 2020
Tel-Aviv, Israel, September 24, 2020 – 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 three and six month periods ended June 30, 2020.
• Revenues were approximately €4.2 million for the six months ended June 30, 2020, compared to approximately €10.3 million for the six months ended June 30, 2019. The decrease in revenues is
mainly due to the sale of ten Italian indirectly wholly-owned subsidiaries of the Company, which held twelve photovoltaic plants in Italy with an aggregate installed capacity of
approximately 22.6 MWp (the “Italian PV Portfolio”), during December 2019. A small portion of the decrease in revenues for the six months ended June 30, 2020 resulted from the decrease in
demand and prices of the European electricity markets due to the Covid-19 crisis. In addition, in February 2020 a strong storm hit one of the Company’s biogas facilities in the Netherlands,
causing the facility to be partially deactivated. The damage repair and return of the facility to full activity took approximately eight weeks (as the process of returning to full biological facility
output is gradual) and in May 2020 the facility returned to full operation.
• Operating expenses were approximately €2.1 million for the six months ended June 30, 2020, compared to approximately €3.5 million for the six months ended June 30, 2019. The decrease in
operating expenses is mainly attributable to the sale of the Italian PV Portfolio, to increased operational efficiency of the Company’s Waste-to-Energy projects in the Netherlands and to
insurance reimbursement in connection with the storm damages in one of our biogas facilities in the Netherlands that reduced operating expenses. Depreciation expenses were approximately
€1.4 million for the six months ended June 30, 2020, compared to approximately €3 million for the six months ended June 30, 2019. The decrease reflects the sale of the Italian PV Portfolio.
• Project development costs were approximately €2.3 million for the six months ended June 30, 2020, compared to approximately €2.7 million for the six months ended June 30, 2019. The
decrease in project development costs is mainly due to a decrease in consultancy expenses in connection with the project to construct a 156 MW pumped storage hydro power plant in the
Manara Cliff, Israel, partially offset by consultancy expenses in connection with the development of photovoltaic projects in Italy.
• General and administrative expenses were approximately €2.2 million for the six months ended June 30, 2020, compared to approximately €1.9 million for the six months ended June 30, 2019.
The increase is mostly due to D&O liability insurance costs.
• Company’s share of profits of equity accounted investee, after elimination of intercompany transactions, was approximately €0.9 million for the six months ended June 30, 2020, compared to
approximately €0.03 million in the six months ended June 30, 2019. The increase in the Company’s share of profit of equity accounted investee is mainly attributable to lower financing
expenses incurred by Dorad Energy Ltd. for the period as a result of the CPI indexation of loans from banks.
• Financing expenses, net was approximately €1.1 million for the six months ended June 30, 2020, compared to approximately €3.1 million for the six months ended June 30, 2019. The decrease in
financing expenses, net, was mainly due to: (i) income recorded in connection with the reevaluation of the Company’s euro/US$ forward transactions and revaluation of Dori Energy loan in
the aggregate amount of approximately €1.1 million during the six months ended June 30, 2020, compared to approximately €0.5 million during the six months ended June 30, 2019, (ii)
decreased expenses resulting from exchange rate differences amounting to approximately €0.9 million in six months ended June 30, 2020, mainly in connection with the New Israeli Shekel
(“NIS”) cash and cash equivalents, compared to approximately €1.3 million for the six months ended June 30, 2019, mainly in connection with the Company’s NIS denominated debentures,
caused by the 0.1% appreciation of the euro against the NIS during the six months ended June 30, 2020, compared to the 5.4% devaluation of the euro against the NIS during the six months
ended June 30, 2019 and (iii) a decrease in financing expenses of approximately €0.9 million resulting from the early repayment of the Company’s Series A Debentures and the sale of the
Italian PV Portfolio, including all related project finance.
Second Quarter 2020 CEO Review
Ran Fridrich, CEO and a board member of the Company, provided the following CEO review:
• Taxes on income was approximately €0.1 million for the six months ended June 30, 2020, compared to approximately €0.5 million for the six months ended June 30, 2019. The decrease in tax
expenses is mainly attributable to the sale of the Italian PV Portfolio and deferred tax income related to the operations of the project company constructing a photovoltaic plant with a peak
capacity of 300MW in the Spain, in which the Company holds 51%.
• Net loss was approximately €4.3 million for the six months ended June 30, 2020, compared to approximately €4.4 million for the six months ended June 30, 2019.
• Total other comprehensive loss was approximately €9.2 million for the six months ended June 30, 2020, compared to a profit of approximately €0.5 million for the six months ended June 30,
- The change was mainly due to changes in fair value of cash flow hedges and from foreign currency translation differences on NIS denominated operations, as a result of fluctuations in
the euro/NIS exchange rates.
• Total comprehensive loss was approximately €13.5 million for the six months ended June 30, 2020, compared to approximately €4.9 million for the six months ended June 30, 2019.
• EBITDA was approximately €(1.6) million for the six months ended June 30, 2020, compared to approximately €2.3 million for the six months ended June 30, 2019.
• Net cash used in operating activities was approximately €1.9 million for the six months ended June 30, 2020, compared to net cash provided by operating activities of approximately €1.1
million for the six months ended June 30, 2019. The decrease in net cash from operating activities is mainly attributable to the sale of the Italian PV Portfolio.
• As of September 1, 2020, the Company held approximately €52 million in cash and cash equivalents, approximately €8 million in short-term deposits, approximately €0.8 million in marketable
securities and approximately €10.6 million in restricted short-term and long-term cash.
• On September 24, 2020, the Company’s Board of Directors approved an extension to the previously announced plan to repurchase the Company’s debentures in an aggregate amount of up
to NIS 15 million for an additional six-month period. The timing, volume and nature of repurchases will be at the sole discretion of management and will depend on market conditions, the
price and availability of the Company’s debentures, and other factors. No assurance can be given that any particular amount of debentures will be repurchased and the repurchase plan does
not obligate the Company to acquire a specific amount of debentures in any period.
• As noted above, the revenues for the six months ended June 30, 2020 were impacted by the decrease in demand and market prices of electricity in Spain resulting from the Covid-19
pandemic. Although the Company’s operations have not thus far been materially adversely affected by the pandemic, the Company’s operations, including, but not limited to, its results of
operations, ability to raise capital and ability to develop new projects, may in the future be adversely affected by the implications of the spread of Covid-19 in Israel, Europe and worldwide.
These potential affects could last until a vaccine or successful treatment plan are developed and implemented worldwide.
• The spreading of the Covid-19 pandemic during the last six months posed new challenges for the company and its employees. Despite those challenges, due to our presence in each of
the countries in which we operate through our representatives, and thanks to an efficient and tight management and control system, the development of projects in Europe continued at
a rapid pace and was not halted. While meeting the schedule and without exceeding the budget. The Talasol project, which is one of the largest mega-projects built in Europe in the past
year, is on the verge of completion of the construction process, meeting the schedule and without exceeding the budget.
• The 2nd quarter was characterized by the continued development momentum of various projects in the field of renewable energy. The Italian PV portfolio under advanced development
continued to grow and currently 242 MW are already in advanced permitting stages.
• In Spain, a 28 MW PV project is expected to receive the final permits in the near future and commence construction. The Company received bids from several contractors and the
contractor selection process is in its final stages.
• The Company won a quote of 20 MW of PV and battery storage in a tender published by the Israeli Electricity Authority. The project involves the construction of 40 MW PV and 80
MW of battery storage capacity (20MW times 4 hours storage).
• As of today, Talasol’s construction is on the verge of completion and the operating permit has been obtained. This permit is the final permit issued by the government, and once
obtained the guarantees provided upon receipt of the building permit will be released. The process of connection to the grid, which is expected to take between 5-7 weeks, is expected to
• The operational improvement of the biogas facilities in the Netherlands continues. During September 2020 a CHP system was installed in the Oude Tonge facility, which will allow cheap
electricity generation for self-consumption and utilization of the residual heat and receipt of subsidies accordingly. The output in the last three months represents 100% production and
the facility is approaching full alignment with the business plan. The Goor facility is in line with production targets and business plan for the last several months. Further improvements
are planned, which are expected to enable increased production and a reduction of costs in our existing facilities.
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 historical financial 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 measures presented by other companies. The Company’s EBITDA may not be indicative of the historic operating results of the Company; nor is it meant to be predictive of
potential future results. A reconciliation between results on an IFRS and non-IFRS basis is provided in the last table 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 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 and Spain, including:
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. Ellomay believes 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, we believe Ellomay is capable of
considering significant and complex transactions, beyond its immediate financial resources.
For more information about Ellomay, visit http://www.ellomay.com.
• Approximately 7.9MW 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 is involved in a project to construct a photovoltaic plant with a peak capacity of 300MW in the municipality of Talaván, Cáceres, Spain;
• 100% of Groen Gas Goor B.V. and of Groen Gas Oude-Tonge B.V., project companies developing anaerobic digestion plants with a green gas production capacity of approximately 375
Nm3/h, in Goor, the Netherlands and 475 Nm3/h, in Oude Tonge, the Netherlands, respectively;
• 75% of Ellomay Pumped Storage (2014) Ltd. (including 6.67% that are held by a trustee in trust for us and other parties), which is involved in a project to construct a 156 MW pumped
storage hydro power plant in the Manara Cliff, Israel.
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 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, 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.
Tel: +972 (3) 797-1111