Ellomay Capital Reports Publication of Financial Results of Dorad Energy Ltd. for the Three and Nine Months Ended September 30, 2017
TEL AVIV, Israel, Nov. 28, 2017 /PRNewswire/ -- Ellomay Capital Ltd. (NYSE American; TASE: ELLO) ("Ellomay" or the "Company"), an emerging operator in the renewable energy and energy infrastructure sector, today reported the publication in Israel of financial statements for the three and nine months ended September 30, 2017 of Dorad Energy Ltd. ("Dorad"), in which Ellomay currently indirectly holds approximately 9.4%.
On November 27, 2017, Amos Luzon Entrepreneurship and Energy Group Ltd. (f/k/a U. Dori Group Ltd.) (the "Luzon Group"), an Israeli public company that currently holds 50% of U. Dori Energy Infrastructures Ltd. ("Dori Energy"), which, in turn, holds 18.75% of Dorad, published its quarterly report in Israel based on the requirements of the Israeli Securities Law, 1968. Based on applicable regulatory requirements, the quarterly report of the Luzon Group includes the financial statements of Dorad for the same period.
The financial results of Dorad for the quarter ended September 30, 2017 were prepared in accordance with International Financial Reporting Standards. Ellomay will include its indirect share of these results (through its holdings in Dori Energy) in its financial results for this period, which are currently expected to be published on or about December 20, 2017. In an effort to provide Ellomay's shareholders with access to Dorad's financial results (which were published in Hebrew), Ellomay hereby provides a convenience translation of Dorad's financial results.
Dorad Financial Highlights
-- Dorad's unaudited revenues for the three months ended September 30, 2017 - approximately NIS 716.2 million (or approximately USD 202.9 million, based on the exchange rate on September 30, 2017). -- Dorad's unaudited operating profit for the three months ended September 30, 2017 - approximately NIS 135.4 million (or approximately USD 38.4 million, based on the exchange rate on September 30, 2017).
Based on the information provided by Dorad, the demand for electricity by Dorad's customers is seasonal and is affected by, inter alia, the climate prevailing in that season. The months of the year are split into three seasons as follows: the summer season - the months of July and August; the winter season - the months of December, January and February; and intermediate seasons - (spring and autumn), the months from March to June and from September to November. There is a higher hourly demand for electricity during the winter and summer seasons, and the average electricity consumption per hour is higher in these seasons than in the intermediate seasons and is even characterized by peak demands due to extreme climate conditions of heat or cold. In addition, Dorad's revenues are affected by the change in load and time tariffs - TAOZ (an electricity tariff that varies across seasons and across the day in accordance with demand hour clusters), as, on average, TAOZ tariffs are higher in the summer season than in the intermediate and winter seasons. Therefore, the results presented for the quarter ended September 30, 2017, which include the summer months of July and August and the intermediate month of September, are not indicative of full year results.
A translation of the financial results for Dorad as of and for the year ended December 31, 2016 and as of and for the three and nine month periods ended September 30, 2016 and 2017 is included at the end of this press release. Ellomay does not undertake to separately report Dorad's financial results in a press release in the future. Neither Ellomay nor its independent public accountants have reviewed or consulted with the Amos Luzon Entrepreneurship and Energy Group Ltd., Dori Energy or Dorad with respect to the financial results included in this press release.
On October 1, 2017, Eilat Ashkelon Infrastructure Services Ltd. ("EAIS"), which holds 37.5% of Dorad's shares, filed a statement of claim in the arbitration proceedings held in connection with the petition to approve a derivative claim (the "Claim") filed by Dori Energy and Hemi Raphael against the other two shareholders of Dorad, Zorlu Enerji Elektrik Uretim A.S and Edelcom Ltd. ("Edelcom") and several other plaintiffs, in connection with the engineering, procurement & construction contractor of the power plant held by Dorad. In its statement of claim, EAIS joins Dori Energy's and Mr. Raphael's request as set forth in the Claim and raises claims that are similar to the claims raised by Dori Energy and Mr. Raphael in the Claim. Following EAIS's filing, the arbitrator determined the dates for filing responses on behalf of the plaintiffs and determined dates for the final preliminary hearing (scheduled for January 1, 2018) and for the discovery process.
On October 26, 2017, Edelcom filed an appeal with respect to the ruling of the Israeli District Court issued on August 31, 2017, in which the Court ruled that a pledge on Dori Energy's shares held by the Luzon Group (as contemplated by the Luzon Group in its prospectus governing the debentures issued by the Luzon Group in Israel) does not provide a right of first refusal to Dorad's other shareholders.
As reported in Dorad's financial statements for the three and nine month periods ended September 30, 2017, on October 30, 2017, Dorad signed an agreement with Energian Israel Ltd. regarding the possible acquisition of natural gas from the Karish and Tanin reserves held by it (which are expected to complete construction by the end of 2020), to purchase natural gas in a cumulative volume of approximately 6 BCM over a period of 14 years. The agreement between Dorad and Energian Israel Ltd. is subject to conditions precedent.
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 energy and infrastructure sectors worldwide. Ellomay (formerly Nur Macroprinters Ltd.) previously was a supplier of wide format and super-wide format digital printing systems and related products worldwide, and sold this business to Hewlett-Packard Company during 2008 for more than $100 million.
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 22.6MW of photovoltaic power plants in Italy, 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 850 MW, representing about 6%-8% of Israel's total current electricity consumption; -- 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 340 MW pumped storage hydro power plant in the Manara Cliff, Israel; -- 51% 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.
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.
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 our forward-looking statements, such as regulatory changes, changes in demand, technical and other disruptions in the operations of the power plant operated by Dorad and changes in the prices of natural gas. 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.
Dorad Energy Ltd. Interim Condensed Statements of Financial Position -------------------------------------------------- September 30 September 30 December 31 2017 2016 2016 ---- ---- ---- (Unaudited) (Unaudited) (Audited) ---------- ---------- -------- NIS thousands NIS thousands NIS thousands ------------- ------------- ------------- Assets Cash and cash equivalents 308,106 215,072 80,967 Trade receivables 296,623 227,405 294,351 Other receivables 82,018 17,615 37,174 ------ ------ ------ Total current assets 686,747 460,092 412,492 ------- ------- ------- Restricted deposit 395,661 408,043 411,574 Prepaid expenses 44,350 45,502 45,938 Fixed asset 4,058,427 4,231,913 4,170,151 Intangible assets 6,683 8,297 8,551 ----- ----- ----- Total non-current assets 4,505,121 4,693,755 4,636,214 --------- --------- --------- Total assets 5,191,868 5,153,847 5,048,706 ========= ========= ========= Liabilities Current maturities of loans from banks 252,000 234,680 197,389 Current maturities of loans from related parties 70,000 70,000 80,000 Trade payables 413,988 267,688 293,613 Other payables 4,628 10,818 9,152 Financial derivatives 3,372 1,574 - ----- ----- --- Total current liabilities 743,988 584,760 580,154 ------- ------- ------- Loans from banks 3,274,223 3,464,531 3,367,832 Loans from related parties 120,404 156,946 151,638 Provision for dismantling and restoration 36,103 35,567 35,700 Deferred tax liabilities, net 89,473 71,102 65,618 Liabilities for employee benefits, net 160 160 160 --- --- --- Total non-current liabilities 3,520,363 3,728,306 3,620,948 --------- --------- --------- Equity Share capital 11 11 11 Share premium 642,199 642,199 642,199 Capital reserve from activities with shareholders 3,748 3,748 3,748 Retained earnings 281,559 194,823 201,646 ------- ------- ------- Total equity 927,517 840,781 847,604 ------- ------- ------- Total liabilities and equity 5,191,868 5,153,847 5,048,706 ========= ========= =========
Dorad Energy Ltd. Interim Condensed Statements of Profit and Loss ----------------------------------------------- For the nine months ended For the three months ended Year ended September 30 September 30 December 31 ------------ ------------ ----------- 2017 2016 2017 2016 2016 ---- ---- ---- ---- ---- (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) ---------- ---------- ---------- ---------- -------- NIS thousands NIS thousands NIS thousands NIS thousands NIS thousands ------------- ------------- ------------- ------------- ------------- Revenues 1,927,460 1,739,691 716,171 613,233 2,299,565 Operating costs of the Power Plant Energy costs 480,876 419,033 189,081 134,223 550,401 Electricity purchase and infrastructure services 914,350 813,480 310,939 269,846 1,104,826 Depreciation and amortization 150,147 157,811 52,513 52,480 209,057 Other operating costs 81,275 102,815 23,360 37,626 141,132 ------ ------- ------ ------ ------- Total operating cost of 1,626,648 1,493,139 575,893 494,175 2,005,416 Power Plant --- Profit from operating the Power Plant 300,812 246,552 140,278 119,058 294,149 General and administrative expenses 13,497 13,612 4,921 4,867 19,178 ------ ------ ----- ----- ------ Operating profit 287,315 232,940 135,357 114,191 274,971 Financing income 2,427 1,429 617 (768) 7,025 Financing expenses (185,974) (179,766) (35,230) (70,963) (226,054) -------- -------- ------- ------- -------- Financing expenses, net (183,547) (178,337) (34,613) (71,731) (219,029) Profit before taxes on income 103,768 54,603 100,744 42,460 55,942 Taxes on income (23,855) (10,220) (23,168) (10,627) (4,736) ------- ------- ------- ------- ------ Profit for the period 79,913 44,383 77,576 31,833 51,206 ====== ====== ====== ====== ======
Dorad Energy Ltd. Interim Condensed Statements of Changes in Shareholders' Equity --------------------------------------------------------------- Capital reserve Share Share for activities with Retained capital premium shareholders earnings Total Equity ------- ------- ------------ -------- ------------ NIS thousands NIS thousands NIS thousands NIS thousands NIS thousands ------------- ------------- ------------- ------------- ------------- For the nine month period ended September 30, 2017 (Unaudited) Balance as at January 1, 2017 (Audited) 11 642,199 3,748 201,646 847,604 Profit for the period - - - 79,913 79,913 --- --- --- ------ ------ Balance as at September 30, 2017 (Unaudited) 11 642,199 3,748 281,559 927,517 === ======= ===== ======= ======= For the nine month period ended September 30, 2016 (Unaudited) Balance as at January 1, 2016 (Audited) 11 642,199 3,748 150,440 796,398 Profit for the period - - - 44,383 44,383 --- --- --- ------ ------ Balance as at September 30, 2016 (Unaudited) 11 642,199 3,748 194,823 840,781 === ======= ===== ======= ======= For the three month period ended September 30, 2017 (Unaudited) Balance as at July 1, 2017 (Unaudited) 11 642,199 3,748 203,983 849,941 Profit for the period - - - 77,576 77,576 --- --- --- ------ ------ Balance as at September 30, 2017 (Unaudited) 11 642,199 3,748 281,559 927,517 === ======= ===== ======= ======= For the three month period ended September 30, 2016 (Unaudited) Balance as at July 1, 2016 (Unaudited) 11 642,199 3,748 162,990 808,948 Profit for the period - - - 31,833 31,833 --- --- --- ------ ------ Balance as at September 30, 2016 (Unaudited) 11 642,199 3,748 194,823 840,781 === ======= ===== ======= ======= For the year ended December 31, 2016 (Audited) Balance as at January 1, 2016 (Audited) 11 642,199 3,748 150,440 796,398 Profit for the year - - - 51,206 51,206 --- --- --- ------ ------ Balance as at December 31, 2016 (Audited) 11 642,199 3,748 201,646 847,604 === ======= ===== ======= =======
Dorad Energy Ltd. Interim Condensed Statements of Cash Flows ------------------------------------------ For the nine months ended For the three months ended Year ended September 30 September 30 December 31 ------------ ------------ 2017 2016 2017 2016 2016 ---- ---- ---- ---- ---- (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) ---------- ---------- ---------- ---------- -------- NIS thousands NIS thousands NIS thousands NIS thousands NIS thousands ------------- ------------- ------------- ------------- ------------- Cash flows from operating activities: Profit for the period 79,913 44,383 77,576 31,833 51,206 Adjustments: Depreciation and amortization and fuel consumption 213,751 171,941 70,845 57,862 238,484 Taxes on income 23,855 10,220 23,168 10,627 4,736 Financing expenses, net 183,547 178,337 34,613 71,731 219,029 ------- ------- ------ ------ ------- 421,153 360,498 128,626 140,220 462,249 ------- ------- ------- ------- ------- Change in trade receivables (1,692) 52,185 (30,794) 49,219 (14,761) Change in other receivables (61,955) 14,379 (1,600) 776 (5,179) Change in trade payables 107,940 23,566 71,234 (57,262) 48,807 Change in other payables (1,078) 1,714 1,308 1,553 677 ------ ----- ----- ----- --- 43,215 91,844 40,148 (5,714) 29,544 ------ ------ ------ ------ ------ Net cash flows provided by operating activities 544,281 496,725 246,350 166,339 542,999 ------- ------- ------- ------- ------- Cash flows used in investing activities Payments for settlement of financial derivatives (7,018) (2,670) (2,385) (1,305) (2,017) Release of pledged deposit - 29,486 - 29,486 29,486 Insurance proceeds in respect of damage to fixed asset 15,444 - 15,444 - - Investment in long-term restricted deposits (21,000) (143,891) - (103,500) (143,891) Release of long-term restricted deposits 25,790 70,000 - - 70,000 Long-term prepaid expenses - (90) - - (1,056) Investment in fixed assets (95,277) (21,221) (41,491) (5,442) (25,415) Investment in intangible assets (258) (1,864) - (110) (2,804) Interest received 1,847 196 617 75 624 ----- --- --- --- --- Net Cash flows used in investing activities (72,331) (70,054) (19,674) (80,796) (75,073) ------- ------- ------- ------- ------- Cash flows from financing activities: Receipt of long-term loans from related parties - 16,689 - 16,689 16,689 Receipt of long- term loans from banks - 242,772 - 242,772 242,772 Repayment of long-term loans from related parties (39,628) (147,219) - (147,219) (147,219) Repayment of loans from banks (85,112) (73,460) - - (143,896) Interest paid (121,093) (302,676) (228) (199,997) (408,071) -------- -------- ---- -------- -------- Net cash flows used in financing activities (245,833) (263,894) (228) (87,755) (439,725) -------- -------- ---- ------- -------- Net increase (decrease) in cash and cash equivalents for the period 226,117 162,777 226,448 (2,212) 28,201 Effect of exchange rate fluctuations on cash and cash equivalents 1,022 401 345 69 872 Cash and cash equivalents at beginning of period 80,967 51,894 81,313 217,215 51,894 ------ ------ ------ ------- ------ Cash and cash equivalents at end of period 308,106 215,072 308,106 215,072 80,967 ------- ------- ------- ------- ------
Contact:
Kalia Weintraub
CFO
Tel: +972 (3) 797-1111
Email: miria@ellomay.com
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