TEL-AVIV - Ellomay Capital Ltd. (NYSE American: ELLO) (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 nine months ended September 30, 2019.
Ran Fridrich, CEO and a board member of Ellomay commented: 'During the nine month period ended September 30, 2019 the Company operated in accordance with its business plan, while executing an extensive development and investment plan. Project development expenses increased by approximately 32% compared to the same period last year. Equity attributed to shareholders of the Company increased by approximately 26% during the period. The Talasol project (300 MW) in Spain is progressing according to plan and construction of more than 50% was already completed. The project is currently expected to commence commercial operation in Q4 of 2020. In addition, the Company is promoting the development of 550 MW PV in Spain and Italy.'
Financial Highlights
Revenues were approximately EUR15.4 million for the nine months ended September 30, 2019, compared to approximately EUR13.9 million for the nine months ended September 30, 2018. The increase in revenues is mainly a result of the commencement of operations of the Company's waste-to-energy project in Oude Tonge, the Netherlands, in June 2018 and relatively higher levels of radiation in Italy during 2019 compared to 2018.
Operating expenses were approximately EUR5 million for the nine months ended September 30, 2019, compared to approximately EUR4.6 million for the nine months ended September 30, 2018. The increase in operating expenses is mainly attributable to additional operating expenses resulting from the commencement of operations at the Company's waste-to-energy project in Oude Tonge, the Netherlands. Depreciation expenses were approximately EUR4.7 million for the nine months ended September 30, 2019, compared to approximately EUR4.4 million for the nine months ended September 30, 2018.
Project development costs were approximately EUR3.5 million for the nine months ended September 30, 2019, compared to approximately EUR2.6 million for the nine months ended September 30, 2018. The increase in project development costs is mainly attributable to consultancy expenses in connection with the project to construct a 156 MW pumped storage hydro power plant in the Manara Cliff, Israel.
General and administrative expenses were approximately EUR2.9 million for the nine months ended September 30, 2019, compared to approximately EUR2.8 million for the nine months ended September 30, 2018.
Company's share of profits of equity accounted investee, after elimination of intercompany transactions, was approximately EUR2.4 million for the nine months ended September 30, 2019, compared to approximately EUR2.2 million in the nine months ended September 30, 2018.
Financing expenses, net was approximately EUR4.6 million for the nine months ended September 30, 2019, compared to approximately EUR1.8 million for the nine months ended September 30, 2018. The increase in financing expenses was mainly due to expenses in connection with exchange rate differences amounting to approximately EUR2.1 million in the nine months ended September 30, 2019, mainly in connection with the Company's NIS denominated Debentures, the loan to an equity accounted investee and cash and cash equivalents, caused by the 11.3% devaluation of the euro against the NIS during this period, compared to income in connection with exchange rate differences amounting to approximately EUR0.5 million in the nine months ended September 30, 2018, caused by the 1.5% revaluation of the euro against the NIS during this period.
Taxes on income was approximately EUR0.9 million for the nine months ended September 30, 2019, compared to taxes on income of approximately EUR0.1 million for the nine months ended September 30, 2018. The lower taxes on income for the nine months ended September 30, 2018 resulted mainly from deferred tax income included in connection with the application of a tax incentive in the Netherlands claimable upon filing the relevant tax return by reducing the amount of taxable profit.
Net loss was approximately EUR3.8 million for the nine months ended September 30, 2019, compared to approximately EUR0.1 million for the nine months ended September 30, 2018.
Total other comprehensive income was approximately EUR13.8 million for the nine months ended September 30, 2019, compared to a loss of approximately EUR0.8 million for the nine months ended September 30, 2018. The change was mainly due to changes in fair value of cash flow hedges and from foreign currency translation differences on New Israeli Shekel denominated operations, as a result of fluctuations in the euro/NIS exchange rates.
Total comprehensive income was approximately EUR10 million for the nine months ended September 30, 2019, compared to a loss of approximately EUR0.9 million for the nine months ended September 30, 2018.
EBITDA was approximately EUR6.4 million for the nine months ended September 30, 2019, compared to approximately EUR6.2 million for the nine months ended September 30, 2018.
Net cash from operating activities was approximately EUR4.3 million for the nine months ended September 30, 2019, compared to approximately EUR4.6 million for the nine months ended September 30, 2018.
On July 17, 2019, the Company issued 800,000 ordinary shares to several Israeli classified investors in a private placement. The price per share in the Private Placement was set at NIS 39.20 (approximately $11) and the gross proceeds to the Company were approximately NIS 31.3 million (approximately EUR7.8 million).
On July 25, 2019, the Company issued NIS 89,065,000 (approximately EUR22.7 million) Series C Debentures in a public offering in Israel at a fixed annual interest rate of 3.3%. The net proceeds of the offering, net of related expenses such as consultancy fee and commissions were approximately NIS 87.8 million (approximately EUR22.3 million).
During July 2019, the Company completed the purchase of 49% of the companies that own the anaerobic digestion plans in Goor and Oude-Tonge, both in the Netherlands from Ludan and several entities affiliated with Ludan for an acquisition price of approximately EUR3 million.
On December 16, 2019, the Company announced its intention to redeem the entire outstanding principal of the Company's Series A Debentures. The redemption is scheduled for January 5, 2020. Pursuant to the terms of the deed of trust governing the Series A Debentures, the early redemption amount will be the sum of approximately NIS 80.1 million (approximately EUR20.7 million) in principal, the sum of approximately NIS 0.05 million (approximately EUR0.01 million) in accrued interest and a prepayment charge of approximately NIS 5.7 million (approximately EUR1.5 million), amounting to an aggregate redemption amount of approximately NIS 85.9 million (approximately EUR22.2 million, based on the exchange rate as of December 30, 2019).
On December 23, 2019, the Company reported the sale of ten Italian indirect wholly-owned subsidiaries (the 'Italian Subsidiaries'), which own twelve photovoltaic plants with an aggregate nominal capacity of approximately 22.6 MW. The agreed purchase price was EUR41 million for the cutoff date of December 31, 2018 and adjusted in connection with funds received by the Company from the Italian Subsidiaries during 2019 (approximately EUR2.3 million), resulting in a cash purchase price of approximately EUR38.7 million. Based on the information currently available, the Company estimates that it will record a profit of approximately EUR19 million in connection with the sale of the Italian Subsidiaries in its financial results for the fourth quarter of 2019. The profit currently expected to be recorded is an unaudited and unreviewed estimate and the actual results may be different from this estimation. The financial results of the Company included in this release do not reflect the sale of the Italian Subsidiaries and therefore are not indicative of future results of the Company.
As of December 1, 2019, the Company held approximately EUR59.1 million in cash and cash equivalents, approximately EUR6.5 million in Short-term deposits, approximately EUR2.3 million in marketable securities and approximately EUR11.2 million in restricted short-term and long-term cash and marketable securities.
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.
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: 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 850MW, 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 Talavan, Caceres, 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 Chashgal Elyon Ltd., Agira Sheuva Electra, L.P. and Ellomay Pumped Storage (2014) Ltd., all of which are involved in a project to construct a 156 MW pumped storage hydro power plant in the Manara Cliff, Israel.
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.
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 weather conditions, 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), changes in demand 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.
Contact:
Kalia Weintraub
Tel: +972 (3) 797-1111
Email: hilai@ellomay.com
ELLOMAY CAPITAL LTD. 
