TEL-AVIV, Israel, Dec. 29,
2022 /PRNewswire/ -- 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
unaudited financial results for the three and nine month periods
ended September 30, 2022.
Financial Highlights for the Nine Month Period Ended
September 30, 2022
- Revenues were approximately €44.7 million for the nine months
ended September 30, 2022, compared to
approximately €33.7 million for the nine months ended September 30, 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 of revenues.
- Operating expenses were approximately €18.4 million for the
nine months ended September 30, 2022,
compared to approximately €11.7 million for the nine months ended
September 30, 2021. The increase in
operating expenses mainly results from the introduction of the
Spanish RDL 17/2021 that established the reduction, currently in
effect until December 31, 2022, 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 war in 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 and amortization expenses
were approximately €11.9 million for the nine months ended
September 30, 2022, compared to
approximately €11.1 million for the nine months ended September 30, 2021.
- Project development costs were approximately €2.7 million for
the nine months ended September 30,
2022, compared to approximately €1.8 million for the nine
months ended September 30, 2021. The
increase in project development costs is mainly due to development
expenses in connection with photovoltaic projects in Italy.
- General and administrative expenses were approximately €5
million for the nine months ended September
30, 2022, compared to approximately €3.9 million for the
nine months ended September 30, 2021.
The increase is mostly due to increased D&O liability insurance
costs, increase in management fee paid pursuant to the new
Management Services Agreement effective July
1, 2021, and an increase in salaries paid to employees.
- Share of profits of equity accounted investee, after
elimination of intercompany transactions, was approximately €0.6
million for the nine months ended September
30, 2022, compared to approximately €0.3 million for the
nine months ended September 30, 2021.
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 higher
electricity tariff, partially offset by an increase in operating
expenses in connection with the increased production and higher
tariff.
- Financing expenses, net was approximately €7.7 million for the
nine months ended September 30, 2022,
compared to approximately €10.4 million for the nine months ended
September 30, 2021. The decrease in
financing expenses, net, was mainly attributable to expenses
resulting from exchange rate differences amounting to approximately
€1.1 million in nine months ended September
30, 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
€2.2 million for the nine months ended September 30, 2021,
caused by the 1% devaluation of the euro against the NIS during the
nine months ended September 30, 2022, compared to the 5.3%
devaluation of the euro against the NIS during the nine months
ended September 30, 2021, and to expenses recorded in
2021 of approximately €0.8 million in connection with the early
repayment of the Company's Series B Debentures.
- Taxes on income were approximately €2 million for the nine
months ended September 30, 2022,
compared to tax benefit of approximately €0.8 million for the nine
months ended September 30, 2021. The
increase is mainly due to the substantial increase in electricity
prices in Spain, resulting in
higher taxable income of the Company's Spanish subsidiaries.
- Loss was approximately €2.3 million for the nine months ended
September 30, 2022, compared to a
loss of approximately €5.8 million for the nine months ended
September 30, 2021.
- Total other comprehensive loss was approximately €61.8 million
for the nine months ended September 30,
2022, compared to approximately €8.9 million for the nine
months ended September 30, 2021. The
increase in total other comprehensive loss mainly resulted 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 flows.
- Total comprehensive loss was approximately €64.1 million for
the nine months ended September 30,
2022, compared to approximately €14.7 million for the nine
months ended September 30, 2021.
- The Company's current liabilities as of September 30, 2022, include a liability in the
amount of approximately €44.3 million in connection with current
maturities of the Talasol PPA resulting from the increase in the
fair value of the liability in connection with the Talasol PPA. As
noted above, the increase in the fair value of the liability in
connection with the Talasol PPA does not impact the Company's cash
flow as Talasol's revenues from the sale of electricity are
expected to exceed its liability and payments to the Talasol PPA
provider. Pursuant to the applicable accounting rules, the Company
is required to recognize the fair value of expected future payments
to the Talasol PPA provider as a liability, but it does not
recognize the expected revenues from the Talasol PV Plant as
assets.
- EBITDA was approximately €19.2 million for the nine months
ended September 30, 2022, compared to
approximately €16.5 million for the nine months ended September 30, 2021. See the table on page 13 of
this press release for a reconciliation of these numbers to profit
and loss.
- Net cash provided by operating activities was approximately
€13.9 million for the nine months ended September 30, 2022, compared to approximately
€13.8 million for the nine months ended September 30, 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, and for the nine months ended
September 30, 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 recognizing 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 nine months ended September 30, 2021, and the year ended
December 31, 2021.
CEO Review for the First Nine Months of 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 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).
During the first nine months of 2022, the Company met the goals
it set for itself. The Company's revenues for the first nine months
of 2022 were approximately €44.7, an increase of approximately 33%
in revenues compared to the same period last year.
The cash flow from operations for the first nine months of 2022
was approximately €13.9 million, which includes a deduction of in
the amount 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.
The operating profit for the first nine months of 2022 amounted
to approximately €7.4 million, an increase of approximately 36%
compared to the corresponding period last year.
The EBITDA for the first nine months of 2022 was approximately
€19.2, an increase of approximately 17% compared to the same period
last year.
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, therefore its effect on the second
quarter was negligible. During the third quarter of 2022, this PV
plant operated at full capacity and generated revenues of
approximately €2.9 million (based on previous estimates the project
was expected to generate average annual revenues of approximately
€3 million). The Talasol PV plant in Spain (300 MW PV), 51% held by the Company,
met all expectations and in the first nine months of 2022 generated
revenues in the amount of approximately €29.5 million. 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 significantly higher prices. The
changes in the fair value of the financial hedge resulted from the
significant increase in electricity prices in Europe and were recorded as a liability in the
Company's balance sheet against a capital reserve. These changes do
not impact the profit and loss and the cash flow of the Company and
do not require an increase of collaterals.
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 and generate average
annual revenues of €74 million and EBITDA of €33 million. The
Company and the project's other shareholder, Ampa, invested the
equity required for the projects, with the remainder of the funding
was received 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:
1. The Komemiyut project, a project of 250 dunams, is
intended for 21 MW PV and 47 MW / hour batteries. We obtained an
approval for connection to the grid. The project is in the process
of receiving a building permit. Construction is planned to commence
in the third quarter of 2023.
2. The Qelahim project, a project of 145 dunams, intended
for 15 MW PV and 33 MW / hour batteries. We obtained an approval
for connection to the grid, and the project is in the final stages
of the zoning approval.
3. The Talmei Yosef project, an expansion of the existing
project (as of today 9 MW PV), an addition of 104 dunams, designed
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 first quarter of 2023.
4. The Talmei Yosef storage project in batteries, a 30
dunam project, intended for approximately 400 MW / hour. The
project is designed for the regulation of the high voltage storage.
Zoning of the project is approved.
5. The Sharsheret project, a project of 205 dunams,
intended for 20 MW PV and 44 MW / hour batteries. The submission of
the zoning request for the project is expected in the coming
weeks.
6. Additional 250 dunams - under advanced planning
stages.
Dorad Power Station: 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. The change in the electricity tariff, which will enter 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.
Activity in the
Netherlands: In connection with the war 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. The Company's wholly owned Dutch
subsidiaries entered into agreements to sell green certificates
representing 2.4 million cubic meters in 2023 at a price of
74-euro cents per cubic meter. The
Company's Dutch subsidiaries are expected to produce in 2023
approximately 14-15 million cubic meters, that are expected to be
sold at significantly higher prices compared to the prices in 2022.
The expected income to the Company is approximately €4.5 million
for 2023, compared to an income from the sale of green certificates
of approximately €1.8 million in 2022.
The gas price for 2023, which is determined based on the 2022
average, is also expected to be above 90-euro cents per cubic meter, a price that is
higher than the cap of the subsidy granted to the Company's Dutch
subsidiaries (approximately 75-euro
cents 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 war in Ukraine, 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;
however the Company expects that the increase in income will exceed
the increase in expenses. The increase in income is already
partially reflected in the high prices of the green certificates
and is expected to continue to be reflected in 2023 as prices of
green certificates are expected to continue to increase, and in
addition gas prices are also expected to be high.
The increase in electricity prices in the Netherlands did not substantially affect
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, is not equipped with the means to
self-generate electricity and heat and is required to pay for the
electricity it consumes, and therefore was negatively affected by
the increase in the price of electricity. In May 2022, Gelderland received notification of
approval for a subsidy for generation of electricity and heat in
its facility and in August 2022, a
generator (CHP) was ordered and is expected to start producing
electricity for self-consumption of the Gelderland facility in
February 2023. Thereafter, all of the
Company's Dutch bio gas facilities will no longer be affected by
the electricity prices.
The Company estimates that with the increasing importance of the
biogas field, this field will enter 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 greatly improve the expected
results of the bio gas 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 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 13 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:
- 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 (with a license to produce 7.5 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.
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 war 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.
Contact:
Kalia Rubenbach (Weintraub)
CFO
Tel: +972 (3) 797-1111
Email: hilai@ellomay.com
Ellomay Capital Ltd.
and its Subsidiaries
|
Condensed
Consolidated Interim Statements of Financial
Position
|
|
|
September
30,
|
December
31,
|
September
30,
|
|
2022
|
2021
|
2022
|
|
(Unaudited)
|
(Audited)
|
(Unaudited)
|
|
€ in
thousands
|
Convenience
Translation into
US$ in thousands*
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
48,487
|
41,229
|
47,704
|
Marketable
securities
|
1,851
|
1,946
|
1,821
|
Short term
deposits
|
-
|
28,410
|
-
|
Restricted
cash
|
4,280
|
1,000
|
4,211
|
Receivable from
concession project
|
1,907
|
1,784
|
1,876
|
Trade and other
receivables
|
8,224
|
9,487
|
8,091
|
|
64,749
|
83,856
|
63,703
|
Non-current
assets
|
|
|
|
Investment in equity
accounted investee
|
34,972
|
34,029
|
34,407
|
Advances on account of
investments
|
1,554
|
1,554
|
1,529
|
Receivable from
concession project
|
26,785
|
26,909
|
26,353
|
Fixed assets
|
366,825
|
340,897
|
360,903
|
Right-of-use
asset
|
29,373
|
23,367
|
28,899
|
Intangible
asset
|
4,670
|
4,762
|
4,595
|
Restricted cash and
deposits
|
21,296
|
15,630
|
20,952
|
Deferred tax
|
35,397
|
12,952
|
34,826
|
Long term
receivables
|
9,646
|
5,388
|
9,490
|
Derivatives
|
1,577
|
2,635
|
1,552
|
|
532,095
|
468,123
|
523,506
|
Total
assets
|
596,844
|
551,979
|
587,209
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
Current
liabilities
|
|
|
|
Current maturities of
long-term bank loans
|
12,417
|
126,180
|
12,217
|
Current maturities of
long-term loans
|
10,000
|
16,401
|
9,839
|
Current maturities of
debentures
|
19,785
|
19,806
|
19,466
|
Trade
payables
|
2,210
|
2,904
|
2,172
|
Other
payables
|
18,322
|
20,806
|
18,026
|
Current maturities of
derivatives
|
44,332
|
14,783
|
43,616
|
Current maturities of
lease liabilities
|
743
|
4,329
|
731
|
|
107,809
|
205,209
|
106,067
|
Non-current
liabilities
|
|
|
|
Long-term lease
liabilities
|
20,632
|
15,800
|
20,299
|
Long-term bank
loans
|
219,658
|
39,093
|
216,112
|
Other long-term
loans
|
21,697
|
37,221
|
21,347
|
Debentures
|
98,991
|
117,493
|
97,393
|
Deferred tax
|
6,653
|
9,044
|
6,546
|
Other long-term
liabilities
|
2,802
|
3,905
|
2,757
|
Derivatives
|
64,577
|
10,107
|
63,534
|
|
435,010
|
232,663
|
427,988
|
Total
liabilities
|
542,819
|
437,872
|
534,055
|
Equity
|
|
|
|
Share
capital
|
25,605
|
25,605
|
25,192
|
Share
premium
|
85,973
|
85,883
|
84,585
|
Treasury
shares
|
(1,736)
|
(1,736)
|
(1,708)
|
Transaction reserve
with non-controlling Interests
|
5,697
|
5,697
|
5,605
|
Reserves
|
(22,214)
|
7,288
|
(21,855)
|
Accumulated
deficit
|
(10,685)
|
(6,899)
|
(10,512)
|
Total equity attributed
to shareholders of the
Company
|
82,640
|
115,838
|
81,307
|
Non-Controlling
Interest
|
(28,615)
|
(1,731)
|
(28,153)
|
Total
equity
|
54,025
|
114,107
|
53,154
|
Total liabilities
and equity
|
596,844
|
551,979
|
587,209
|
* Convenience translation into US$ (exchange rate as at
September 30, 2022: euro 1 =
US$ 0.984)
Ellomay Capital Ltd.
and its Subsidiaries
|
Condensed
Consolidated Interim Statements of Comprehensive
Loss
|
|
|
For the Three months
ended September 30,
|
For the Nine months
ended September 30,
|
For the year
ended December 31,
|
For the nine months
ended September 30,
|
|
|
2022
|
2021
|
2022
|
2021
|
2021
|
2022
|
|
Unaudited
|
Unaudited
|
Audited
|
Unaudited
|
|
€ in
thousands
|
€ in
thousands
|
€ in
thousands
|
Convenience
Translation
into US$
in thousands*
|
Revenues
|
15,529
|
13,311
|
44,725
|
33,704
|
45,721
|
44,003
|
Operating
expenses
|
(5,297)
|
(4,145)
|
(18,429)
|
(11,717)
|
(17,590)
|
(18,131)
|
Depreciation and
amortization expenses
|
(3,873)
|
(4,002)
|
(11,851)
|
(11,078)
|
(15,116)
|
(11,660)
|
Gross
profit
|
6,359
|
5,164
|
14,445
|
10,909
|
13,015
|
14,212
|
|
|
|
|
|
|
|
Project development
costs
|
(1,126)
|
(726)
|
(2,680)
|
(1,845)
|
(2,508)
|
(2,637)
|
General and
administrative expenses
|
(1,669)
|
(1,377)
|
(4,966)
|
(3,949)
|
(5,661)
|
(4,886)
|
Share of profits of
equity accounted investee
|
1,158
|
1,056
|
556
|
284
|
117
|
547
|
Operating
profit
|
4,722
|
4,117
|
7,355
|
5,399
|
4,963
|
7,236
|
|
|
|
|
|
|
|
Financing
income
|
844
|
630
|
2,655
|
2,346
|
2,931
|
2,612
|
Financing income
(expenses) in connection with derivatives and warrants,
net
|
677
|
(294)
|
1,015
|
(403)
|
(841)
|
999
|
Financing expenses in
connection with project finance
|
(1,957)
|
(1,870)
|
(5,846)
|
(5,528)
|
(17,800)
|
(5,752)
|
Financing expenses in
connection with debentures
|
(943)
|
(36)
|
(2,286)
|
(2,800)
|
(3,220)
|
(2,249)
|
Financing expenses on
loans granted by non-controlling interests
|
(331)
|
(565)
|
(1,223)
|
(1,504)
|
(2,055)
|
(1,203)
|
Other financing
expenses
|
(3,850)
|
(2,165)
|
(2,056)
|
(2,549)
|
(5,899)
|
(2,023)
|
Financing expenses,
net
|
(5,560)
|
(4,300)
|
(7,741)
|
(10,438)
|
(26,884)
|
(7,616)
|
Loss before taxes on
income
|
(838)
|
(183)
|
(386)
|
(5,039)
|
(21,921)
|
(380)
|
|
|
|
|
|
|
|
Tax benefit (Taxes on
income)
|
(863)
|
(456)
|
(1,950)
|
(762)
|
2,281
|
(1,919)
|
Loss for the
period
|
(1,701)
|
(639)
|
(2,336)
|
(5,801)
|
(19,640)
|
(2,299)
|
Loss attributable
to:
|
|
|
|
|
|
|
Owners of the
Company
|
(2,564)
|
(1,487)
|
(3,786)
|
(6,739)
|
(15,090)
|
(3,726)
|
Non-controlling
interests
|
863
|
848
|
1,450
|
938
|
(4,550)
|
1,427
|
Loss for the
period
|
(1,701)
|
(639)
|
(2,336)
|
(5,801)
|
(19,640)
|
(2,299)
|
Other comprehensive
loss item
|
|
|
|
|
|
|
that after
initial recognition in comprehensive income (loss)
were or will be transferred to profit or
loss:
|
|
|
|
|
|
|
Foreign currency
translation differences for foreign operations
|
4,889
|
3,904
|
1,206
|
5,588
|
12,284
|
1,186
|
Effective portion of
change in fair value of cash flow hedges
|
(31,879)
|
(7,444)
|
(63,821)
|
(12,646)
|
(13,429)
|
(62,791)
|
Net change in fair
value of cash flow hedges transferred to profit or loss
|
-
|
(647)
|
821
|
(1,872)
|
(3,353)
|
808
|
Total other
comprehensive loss
|
(26,990)
|
(4,187)
|
(61,794)
|
(8,930)
|
(4,498)
|
(60,797)
|
|
|
|
|
|
|
|
Total other
comprehensive loss attributable
to:
|
|
|
|
|
|
|
Owners of the
Company
|
(10,451)
|
(372)
|
(29,502)
|
(2,136)
|
3,124
|
(29,026)
|
Non-controlling
interests
|
(16,539)
|
(3,815)
|
(32,292)
|
(6,794)
|
(7,622)
|
(31,771)
|
Total other
comprehensive loss for the period
|
(26,990)
|
(4,187)
|
(61,794)
|
(8,930)
|
(4,498)
|
(60,797)
|
Total comprehensive
loss for the period
|
(28,691)
|
(4,826)
|
(64,130)
|
(14,731)
|
(24,138)
|
(63,096)
|
|
|
|
|
|
|
|
Total
comprehensive loss attributable
to:
|
|
|
|
|
|
|
Owners of the
Company
|
(13,015)
|
(1,859)
|
(33,288)
|
(8,875)
|
(11,966)
|
(32,752)
|
Non-controlling
interests
|
(15,676)
|
(2,967)
|
(30,842)
|
(5,856)
|
(12,172)
|
(30,344)
|
Total comprehensive
loss for the period
|
(28,691)
|
(4,826)
|
(64,130)
|
(14,731)
|
(24,138)
|
(63,096)
|
|
|
|
|
|
|
|
Basic net loss per
share
|
(0.20)
|
(0.27)
|
(0.29)
|
(0.55)
|
(1.18)
|
(0.30)
|
Diluted net loss per
share
|
(0.20)
|
(0.27)
|
(0.29)
|
(0.55)
|
(1.18)
|
(0.30)
|
|
|
|
|
|
|
|
|
* Convenience translation into US$ (exchange rate as at September
30, 2022: euro 1 = US$ 0.984)
Ellomay Capital Ltd.
and its Subsidiaries
|
Condensed
Consolidated Statements of Changes in Equity
|
|
|
|
|
Attributable to
shareholders of the Company
|
Non-
controlling
|
Total
|
|
|
|
Interests
|
Equity
|
|
Share
capital
|
Share
premium
|
Accumulated
Deficit
|
Treasury
shares
|
Translation
reserve from foreign
operations
|
Hedging
Reserve
|
Interests
Transaction
reserve with non-controlling
Interests
|
Total
|
|
|
|
€ in
thousands
|
For the nine months
ended
|
|
|
|
|
|
|
|
|
|
|
September 30, 2022
(Unaudited):
|
|
|
|
|
|
|
|
|
|
|
Balance as at
January 1, 2022
|
25,605
|
85,883
|
(6,899)
|
(1,736)
|
15,365
|
(8,077)
|
5,697
|
115,838
|
(1,731)
|
114,107
|
Loss for the
period
|
-
|
-
|
(3,786)
|
-
|
-
|
-
|
-
|
(3,786)
|
1,450
|
(2,336)
|
Other comprehensive
loss for the period
|
-
|
-
|
-
|
-
|
1,152
|
(30,654)
|
-
|
(29,502)
|
(32,292)
|
(61,794)
|
Total comprehensive
loss for the period
|
-
|
-
|
(3,786)
|
-
|
1,152
|
(30,654)
|
-
|
(33,288)
|
(30,842)
|
(64,130)
|
Transactions with
owners of the Company, recognized directly in
equity:
|
|
|
|
|
|
|
|
|
|
|
Issuance of capital
note to non-controlling interest
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
3,958
|
3,958
|
Share-based
payments
|
-
|
90
|
-
|
-
|
-
|
-
|
-
|
90
|
-
|
90
|
Balance as at
September 30, 2022
|
25,605
|
85,973
|
(10,685)
|
(1,736)
|
16,517
|
(38,731)
|
5,697
|
82,640
|
(28,615)
|
54,025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the nine months
ended
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021
(Unaudited):
|
|
|
|
|
|
|
|
|
|
|
Balance as at
January 1, 2021
|
25,102
|
82,401
|
8,191
|
(1,736)
|
3,823
|
341
|
6,106
|
124,228
|
798
|
125,026
|
Loss for the
period
|
-
|
-
|
(6,739)
|
-
|
-
|
-
|
-
|
(6,739)
|
938
|
(5,801)
|
Other comprehensive
loss for the period
|
-
|
-
|
-
|
-
|
5,270
|
(7,406)
|
-
|
(2,136)
|
(6,794)
|
(8,930)
|
Total comprehensive
loss for the period
|
-
|
-
|
(6,739)
|
-
|
5,270
|
(7,406)
|
-
|
(8,875)
|
(5,856)
|
(14,731)
|
Transactions with
owners of the Company, recognized directly in
equity:
|
|
|
|
|
|
|
|
|
|
|
Issuance of Capital
note to non-controlling interest
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
8,682
|
8,682
|
Acquisition of
shares in subsidiaries from non-controlling
interests
|
-
|
-
|
-
|
-
|
-
|
-
|
(961)
|
(961)
|
961
|
-
|
Warrants
exercise
|
454
|
3,348
|
-
|
-
|
-
|
-
|
-
|
3,802
|
-
|
3,802
|
Options
exercise
|
22
|
-
|
-
|
-
|
-
|
-
|
-
|
22
|
-
|
22
|
Share-based
payments
|
-
|
25
|
-
|
-
|
-
|
-
|
-
|
25
|
-
|
25
|
Balance as at
September 30, 2021
|
25,578
|
85,774
|
1,452
|
(1,736)
|
9,093
|
(7,065)
|
5,145
|
118,241
|
4,585
|
122,826
|
Ellomay Capital Ltd.
and its Subsidiaries
|
Condensed
Consolidated Interim Statements of Changes in Equity
(cont'd)
|
|
|
|
|
Attributable to
shareholders of the Company
|
Non-
controlling
|
Total
|
|
|
|
Interests
|
Equity
|
|
Share
capital
|
Share
premium
|
Accumulated
Deficit
|
Treasury
shares
|
Translation
reserve from foreign
operations
|
Hedging
Reserve
|
Interests
Transaction
reserve with non-controlling
Interests
|
Total
|
|
|
|
€ in
thousands
|
For the year
ended
|
|
|
|
|
|
|
|
|
|
|
December 31, 2021
(Audited):
|
|
|
|
|
|
|
|
|
|
|
Balance as at
January 1, 2021
|
25,102
|
82,401
|
8,191
|
(1,736)
|
3,823
|
341
|
6,106
|
124,228
|
798
|
125,026
|
Loss for the
year
|
-
|
-
|
(15,090)
|
-
|
-
|
-
|
-
|
(15,090)
|
(4,550)
|
(19,640)
|
Other comprehensive
loss for the year
|
-
|
-
|
-
|
-
|
11,542
|
(8,418)
|
-
|
3,124
|
(7,622)
|
(4,498)
|
Total comprehensive
loss for the year
|
-
|
-
|
(15,090)
|
-
|
11,542
|
(8,418)
|
-
|
(11,966)
|
(12,172)
|
(24,138)
|
Transactions with
owners of the Company, recognized directly in
equity:
|
|
|
|
|
|
|
|
|
|
|
Issuance of capital
note to non-controlling interest
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
8,682
|
8,682
|
Acquisition of
shares in subsidiaries from non-controlling
interests
|
-
|
-
|
-
|
-
|
-
|
-
|
(409)
|
(409)
|
961
|
552
|
Warrants
exercise
|
454
|
3,419
|
-
|
-
|
-
|
-
|
-
|
3,873
|
-
|
3,873
|
Options
exercise
|
49
|
-
|
-
|
-
|
-
|
-
|
-
|
49
|
-
|
49
|
Share-based
payments
|
-
|
63
|
-
|
-
|
-
|
-
|
-
|
63
|
-
|
63
|
Balance as at
December 31, 2021
|
25,605
|
85,883
|
(6,899)
|
(1,736)
|
15,365
|
(8,077)
|
5,697
|
115,838
|
(1,731)
|
114,107
|
Ellomay Capital Ltd.
and its Subsidiaries
|
Condensed
Consolidated Interim Statements of Changes in Equity
(cont'd)
|
|
|
|
|
Attributable to
shareholders of the Company
|
Non-
controlling
|
Total
|
|
|
|
Interests
|
Equity
|
|
Share
capital
|
Share
premium
|
Retained
earnings
|
Treasury
shares
|
Translation
reserve from foreign
operations
|
Hedging
Reserve
|
Interests
Transaction
reserve with non-controlling
Interests
|
Total
|
|
|
|
Convenience
translation into US$ (exchange rate as at September 30, 2022: euro
1 = US$ 0.984)
|
For the nine month ended September 30, 2022
(unaudited):
|
|
|
|
|
|
|
|
|
|
|
Balance as at January 1, 2022
|
25,192
|
84,496
|
(6,786)
|
(1,708)
|
15,118
|
(7,947)
|
5,605
|
113,970
|
(1,703)
|
112,267
|
Loss for the period
|
-
|
-
|
(3,726)
|
-
|
-
|
-
|
-
|
(3,726)
|
1,427
|
(2,299)
|
Other comprehensive loss for the
period
|
-
|
-
|
-
|
-
|
1,133
|
(30,159)
|
-
|
(29,026)
|
(31,771)
|
(60,797)
|
Total comprehensive loss for the
period
|
-
|
-
|
(3,726)
|
-
|
1,133
|
(30,159)
|
-
|
(32,752)
|
(30,344)
|
(63,096)
|
Transactions with owners of
the Company, recognized
directly in
equity:
|
|
|
|
|
|
|
|
|
|
|
Issuance of capital note to non-controlling
interest
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
3,894
|
3,894
|
Share-based payments
|
-
|
89
|
-
|
-
|
-
|
-
|
-
|
89
|
-
|
89
|
Balance as at September 30,
2022
|
25,192
|
84,585
|
(10,512)
|
(1,708)
|
16,251
|
(38,106)
|
5,605
|
81,307
|
(28,153)
|
53,154
|
Ellomay Capital Ltd.
and its Subsidiaries
|
Condensed
Consolidated Interim Statements of Cash Flow
|
|
|
For the three
months
ended September 30,
|
For the nine
months
ended September 30,
|
For the year
ended December 31,
|
For the nine months
ended September 30
|
|
2022
|
2021
|
2022
|
2021
|
2021
|
2022
|
|
Unaudited
|
Unaudited
|
Audited
|
Unaudited
|
|
€
in thousands
|
Convenience
Translation into
US$*
|
Cash flows from
operating activities
|
|
|
|
|
|
|
Loss for the
period
|
(1,701)
|
(639)
|
(2,336)
|
(5,801)
|
(19,640)
|
(2,299)
|
Adjustments
for:
|
|
|
|
|
|
|
Financing expenses,
net
|
5,560
|
4,300
|
7,741
|
10,438
|
26,884
|
7,616
|
Profit from settlement
of derivatives contract
|
-
|
-
|
-
|
(407)
|
(407)
|
-
|
Depreciation and
amortization
|
3,873
|
4,002
|
11,851
|
11,078
|
15,116
|
11,660
|
Share-based payment
transactions
|
30
|
12
|
90
|
25
|
63
|
89
|
Share of profits of
equity accounted investees
|
(1,158)
|
(1,056)
|
(556)
|
(284)
|
(117)
|
(547)
|
Payment of interest on
loan by an equity accounted investee
|
-
|
-
|
-
|
859
|
859
|
-
|
Change in trade
receivables and other receivables
|
2,862
|
(4,301)
|
283
|
(6,425)
|
(1,883)
|
278
|
Change in other
assets
|
(163)
|
582
|
(110)
|
(200)
|
(545)
|
(108)
|
Change in receivables
from concessions project
|
77
|
556
|
(473)
|
1,313
|
1,580
|
(465)
|
Change
in trade payables
|
47
|
929
|
(754)
|
(12)
|
154
|
(742)
|
Change in other
payables
|
(3,480)
|
3,499
|
4,398
|
7,214
|
2,380
|
4,327
|
Taxes on income (tax
benefit)
|
863
|
456
|
1,950
|
762
|
(2,281)
|
1,919
|
Taxes on income
paid
|
(1,144)
|
-
|
(4,399)
|
(15)
|
(94)
|
(4,328)
|
Interest
received
|
481
|
406
|
1,403
|
1,327
|
1,844
|
1,380
|
Interest
paid
|
(260)
|
(2,243)
|
(5,184)
|
(6,100)
|
(7,801)
|
(5,100)
|
Net cash provided by
operating activities
|
5,887
|
6,503
|
13,904
|
13,772
|
16,112
|
13,680
|
Cash flows from
investing activities
|
|
|
|
|
|
|
Acquisition of fixed
assets
|
(16,793)
|
(8,785)
|
(39,067)
|
(73,450)
|
(83,682)
|
(38,436)
|
VAT associated with the
acquisition of fixed assets
|
-
|
2,310
|
-
|
2,310
|
-
|
-
|
Repayment of loan by an
equity accounted investee
|
-
|
-
|
149
|
1,400
|
1,400
|
147
|
Loan to an equity
accounted investee
|
(60)
|
(52)
|
(60)
|
(296)
|
(335)
|
(59)
|
Advances on account of
investments
|
-
|
-
|
-
|
(8)
|
-
|
-
|
Settlement of
derivatives contract
|
3,800
|
-
|
3,272
|
(252)
|
(976)
|
3,219
|
Investment in
restricted cash, net
|
(639)
|
(19)
|
(8,880)
|
(204)
|
(5,990)
|
(8,737)
|
Proceeds (investment)
in short term deposit
|
-
|
-
|
27,645
|
8,533
|
(18,599)
|
27,199
|
Proceeds (investment)
in marketable securities
|
-
|
-
|
-
|
1,785
|
(112)
|
-
|
Net cash used in
investing activities
|
(13,692)
|
(6,546)
|
(16,941)
|
(60,182)
|
(108,294)
|
(16,667)
|
Cash flows from
financing activities
|
|
|
|
|
|
|
Sale of shares in
subsidiaries to non-controlling interests
|
-
|
-
|
-
|
1,400
|
1,400
|
-
|
Proceeds from
options
|
-
|
-
|
-
|
22
|
49
|
-
|
Cost associated with
long term loans
|
(1,033)
|
(1,122)
|
(9,991)
|
(1,319)
|
(2,796)
|
(9,830)
|
Payment of principal of
lease liabilities
|
(1,575)
|
-
|
(5,548)
|
-
|
(4,803)
|
(5,458)
|
Proceeds from long-term
loans
|
-
|
39
|
196,162
|
32,515
|
32,947
|
192,995
|
Repayment of long-term
loans
|
(5,348)
|
(7,360)
|
(148,443)
|
(10,750)
|
(18,905)
|
(146,046)
|
Repayment of
Debentures
|
-
|
-
|
(19,764)
|
(30,730)
|
(30,730)
|
(19,445)
|
Repayment of SWAP
instrument associated with long term loans
|
-
|
-
|
(3,290)
|
-
|
-
|
(3,237)
|
IFRS 16
|
-
|
(4,086)
|
|
(4,086)
|
|
|
Proceeds from issue of
convertible debentures
|
-
|
-
|
-
|
15,571
|
15,571
|
-
|
Proceeds from issuance
of Debentures, net
|
-
|
-
|
-
|
25,465
|
57,717
|
-
|
Issuance / exercise of
warrants
|
-
|
-
|
-
|
3,675
|
3,746
|
-
|
Net cash provided by
(used in) financing activities
|
(7,956)
|
(12,529)
|
9,126
|
31,763
|
54,196
|
8,979
|
|
|
|
|
|
|
|
Effect of exchange rate
fluctuations on cash and cash equivalents
|
4,297
|
3,366
|
1,169
|
5,855
|
12,370
|
1,149
|
Decrease in cash and
cash equivalents
|
(11,464)
|
(9,206)
|
7,258
|
(8,792)
|
(25,616)
|
7,141
|
Cash and cash
equivalents at the beginning of the period
|
59,951
|
67,259
|
41,229
|
66,845
|
66,845
|
40,563
|
Cash and cash
equivalents at the end of the period
|
48,487
|
58,053
|
48,487
|
58,053
|
41,229
|
47,704
|
* Convenience translation into US$ (exchange rate as at
September 30, 2022: euro 1 = US$
0.984)
Ellomay Capital Ltd.
and its Subsidiaries
|
Operating
Segments
|
|
|
PV
|
|
|
|
Total
|
|
|
|
|
|
Ellomay
|
|
|
Bio
|
|
|
reportable
|
|
Total
|
|
Italy
|
Spain
|
Solar
|
Talasol
|
Israel[1]
|
Gas
|
Dorad
|
Manara
|
segments
|
Reconciliations
|
consolidated
|
|
For the nine months ended September 30,
2022
|
|
€ in thousands
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
-
|
2,668
|
2,852
|
29,484
|
3,634
|
8,839
|
47,522
|
-
|
94,999
|
(50,274)
|
44,725
|
Operating
expenses
|
-
|
(225)
|
(908)
|
(8,169)
|
(326)
|
(8,801)
|
(36,239)
|
-
|
(54,668)
|
36,239
|
(18,429)
|
Depreciation and
amortization expenses
|
-
|
(678)
|
(181)
|
(8,528)
|
(1,929)
|
(2,062)
|
(4,882)
|
-
|
(18,260)
|
6,409
|
(11,851)
|
Gross profit
(loss)
|
-
|
1,765
|
1,763
|
12,787
|
1,379
|
(2,024)
|
6,401
|
-
|
22,071
|
(7,626)
|
14,445
|
Project development
costs
|
|
|
|
|
|
|
|
|
|
|
(2,680)
|
General and
|
|
|
|
|
|
|
|
|
|
|
|
administrative
expenses
|
|
|
|
|
|
|
|
|
|
|
(4,966)
|
Share of loss of
equity
|
|
|
|
|
|
|
|
|
|
|
|
accounted
investee
|
|
|
|
|
|
|
|
|
|
|
556
|
Operating
profit
|
|
|
|
|
|
|
|
|
|
|
7,355
|
Financing
income
|
|
|
|
|
|
|
|
|
|
|
2,655
|
Financing expenses in
connection with derivatives and
warrants, net
|
|
|
|
|
|
|
|
|
|
|
1,015
|
Financing expenses in
connection with project finance
|
|
|
|
|
|
|
|
|
|
|
(5,846)
|
Financing expenses in
connection with debentures
|
|
|
|
|
|
|
|
|
|
|
(2,286)
|
Financing expenses on
loans granted by non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
(1,223)
|
Other financing
expenses
|
|
|
|
|
|
|
|
|
|
|
(2,056)
|
Financing expenses,
net
|
|
|
|
|
|
|
|
|
|
|
(7,741)
|
Loss before taxes on
Income
|
|
|
|
|
|
|
|
|
|
|
(386)
|
Segment assets as at
September 30, 2022
|
18,838
|
15,592
|
24,779
|
266,829
|
38,320
|
30,644
|
119,588
|
127,550
|
642,140
|
(45,296)
|
596,844
|
Ellomay Capital Ltd.
and its Subsidiaries
|
Reconciliation of
Loss to EBITDA
|
|
|
For the three months
ended September 30,
|
For the nine months
ended September 30,
|
For the year
ended December 31,
|
For the nine months
ended September 30,
|
|
2022
|
2021
|
2022
|
2021
|
2021
|
2022
|
|
Unaudited
|
|
€ in
thousands
|
Convenience
Translation into
US$ in
thousands*
|
Loss for the
period
|
(1,701)
|
(639)
|
(2,336)
|
(5,801)
|
(19,640)
|
(2,299)
|
Financing expenses,
net
|
5,560
|
4,300
|
7,741
|
10,438
|
26,884
|
7,616
|
Taxes on income (Tax
benefit)
|
863
|
456
|
1,950
|
762
|
(2,281)
|
1,919
|
Depreciation
and amortization expenses
|
3,873
|
4,002
|
11,851
|
11,078
|
15,116
|
11,660
|
EBITDA
|
8,595
|
8,119
|
19,206
|
16,477
|
20,079
|
18,896
|
* Convenience translation into US$ (exchange rate as at
September 30, 2022: euro 1 = US$
0.984)
Ellomay Capital Ltd.
Information for the Company's Debenture Holders
Potential Warning Signs
As of September 30, 2022, we had
working capital deficiency of approximately €43.1 million. The
working capital deficiency as of September
30, 2022, resulted from the recording of current maturities
of derivatives in the amount of approximately €44.3 million as a
result of the increase in the fair value of the liability resulting
from the Talasol PPA. These current maturities do not impact our
cash flows. Taking into account the nature of the current
maturities, in our opinion our working capital is sufficient for
our present requirements.
Upon the issuance of our Debentures, we 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
our Debentures. This model provides that in the event certain
financial "warning signs" exist in our consolidated financial
results or statements, and for as long as they exist, we will be
subject to certain disclosure obligations towards the holders of
our Debentures. One possible "warning sign" is the existence of a
working capital deficiency (if the board of directors of the
company 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, 2022, our Board of Directors noted the working capital
deficiency as of September 30, 2022.
Our board of directors reviewed our financial position, outstanding
debt obligations and our existing and anticipated cash resources
and uses and determined that the existence of a working capital
deficiency as of September 30, 2022,
does not indicate a liquidity problem. In making such
determination, our board of directors noted the following: (i) the
deficiency in working capital resulted from the recording of
current maturities of derivatives in the amount of approximately
€44.3 million as a result of the increase in the fair value of the
liability resulting from the Talasol PPA, which does not impact our
cash flow in the next 12 months as Talasol's revenues from the sale
of electricity during the same period are expected to exceed its
liability and payments to the PPA provider, (ii) pursuant to the
applicable accounting rules, we are required to recognize the fair
value of expected future payments to the PPA provider as a
liability but do not recognize the expected revenues from the
Talasol PV Plant as assets, as these expected revenues cannot be
recorded as an asset under accounting rules, resulting in an
increase in current liabilities and a working capital deficiency,
and (iii) our operating subsidiaries generated a positive cash flow
during the year ended December 31,
2021 and the nine month periods ended September 30, 2022 and 2021.
Financial Covenants
Pursuant to the Deeds of Trust governing the Company's Series C
and Series D Debentures (together, the "Debentures"), the
Company is required to maintain certain financial covenants. For
more information, see Item 5.B of the Company's Annual Report on
Form 20-F submitted to the Securities and Exchange Commission on
March 31, 2022, and below.
Net Financial Debt
As of September 30, 2022, the
Company's Net Financial Debt, (as such term is defined in the Deeds
of Trust of the Company's Debentures), was approximately €70.2
million (consisting of approximately €267.6[2] million of
short-term and long-term debt from banks and other interest bearing
financial obligations, approximately €120.5[3] million in
connection with the Series C Debentures issuances (in July 2019, October
2020, February 2021 and
October 2021) and Series D Debentures
issuance (in February 2021), net of
approximately €50.3 million of cash and cash equivalents,
short-term deposits and marketable securities and net of
approximately €267.6[4] million of project finance and related
hedging transactions of the Company's subsidiaries).
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, 2022, 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 €135.7 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 34.1%, and (iii) the ratio of the Company's
Net Financial Debt to the Company's Adjusted EBITDA[5], was
2.8.
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,
2022:
|
For the four-quarter period
ended September 30, 2022
|
|
Unaudited
|
|
€ in
thousands
|
Loss for the
period
|
(16,168)
|
Financing expenses,
net
|
24,187
|
Taxes on
income
|
(1,091)
|
Depreciation and
amortization expenses
|
15,879
|
Adjustment to revenues
of the Talmei Yosef PV Plant due to
calculation based on the fixed asset model
|
2,122
|
Share-based
payments
|
128
|
Adjusted EBITDA as
defined the Series C Deed of Trust
|
25,057
|
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, 2022, 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 €135.7 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 34.1%, and (iii) the ratio of the Company's
Net Financial Debt to the Company's Adjusted EBITDA[6] was
2.3.
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, 2022:
|
For the four-quarter period
ended September 30, 2022
|
|
Unaudited
|
|
€ in
thousands
|
Loss for the
period
|
(16,168)
|
Financing expenses,
net
|
24,187
|
Taxes on
income
|
(1,091)
|
Depreciation and
amortization expenses
|
15,879
|
Adjustment to revenues
of the Talmei Yosef PV Plant due to
calculation based on the fixed asset model
|
2,122
|
Share-based
payments
|
128
|
Adjustment to data
relating to projects with a Commercial
Operation Date during the four preceding
quarters[7]
|
5,832
|
Adjusted EBITDA as
defined the Series D Deed of Trust
|
30,889
|
[1] The Talmei Yosef PV Plant located in Israel is presented under the fixed asset
model and not under the financial asset model as per IFRIC 12.
[2] Short-term and long-term debt from banks and other
interest-bearing financial obligations amount provided above,
includes an amount of approximately €3.8 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.
[3] Debentures amount provided above includes an amount of
approximately €1.7 million associated costs, which was capitalized
and therefore offset from the debentures amount that is
recorded in the Company's balance sheet.
[4] 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).
[5] 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 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.
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."
[6] 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."
[7] The adjustment is based on the results of Ellomay Solar
since June 24, 2022.
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SOURCE Ellomay Capital Ltd.