Enlight Renewable Energy Ltd. (ENLT, TASE: ENLT) reported financial results for the first quarter ended March 31, 2023. The Company’s quarterly
earnings materials and a link to the earnings webcast.
“We delivered record results in the first quarter of 2023, with Revenue up 103%, Net Income up 275% and Adjusted EBITDA* up 118%, driven by the 810 MW of projects that went into operation over the past year. Moreover, we believe that we have strong visibility on future growth. With a further 1 GW and 1.7 GWh of projects under construction and an additional 2.1 GW and 1.8 GWh of projects in pre-construction, all of which are projected to reach commercial operation by the end of 2025, we believe our growth is poised to continue apace over the coming years”, said Gilad Yavetz, CEO of Enlight Renewable Energy.
“In addition, we believe our projects can earn above-market returns due to our expertise in greenfield development, coupled with the positive regulatory backdrop of the Inflation Reduction Act. During the quarter we secured 480 MW of power purchase agreement (“PPA”) amendments with an average price increase of 30% and signed 475 MW of new PPAs at attractive prices. This demonstrates our ability to maintain above-market returns, despite the higher interest rate environment,” Yavetz added.
“We are also pleased to provide color on our funding capabilities post our U.S. initial public offering. With existing resources, we believe we can complete the entirety of our Mature Projects, with excess cash to spare. Moreover, we believe we have the financial flexibility to accelerate our growth thereafter, at our stated project deployment guidance of 1.5 GW per year, based on our current operating plan. We have several financing tools available to us to fund anticipated future growth, including distributions generated from our projects, proceeds from the sale of a minority ownership stake of some of our U.S. projects, issuance of unsecured bonds and project debt refinancings, without requiring additional equity financing. We believe that our successful development and execution efforts coupled with the U.S. IPO has created an autonomous machine that is in prime position to capture the massive opportunity we see ahead.”
First Quarter Highlights
- Record Revenue of $71m, up 103% year over year.
- Net Income of $33m, up 275% year over year.
- Record Adjusted EBITDA* of $54m, up 118% year over year.
- Cash flow from operation of $55m, up 315% year over year.
- $3m of proceeds from the sale of electricity during the quarter which were not recognized as Revenue or included in Adjusted EBITDA under the International Financial Reporting Standards (“IFRS”) for projects treated as Financial Assets.
- Negotiating arrangements with leading financial institutions to provide an $800m construction facility, $380m of back leverage and $450m of tax equity for the Atrisco project. Financial close expected by the end of the second quarter.
- Improvement to project economics: amendment of 480 MW of signed PPAs at an average price increase of 30% during the quarter; 475 MW of new PPAs signed at attractive pricing.
- Indications that at least 25% of U.S. portfolio may benefit from energy community tax credit adder under the Inflation Reduction Act, which could drive significant additional value for the Company's project portfolio.
- Outlining financing capabilities, contemplating significant financial flexibility to accelerate growth at 1.5 GW per year without additional equity.
- EUR, other European currency and USD comprised 78% of revenues and 82% of cash and cash equivalents; limited exposure to Israeli shekel.
- Affirming financial guidance for the year ending December 31, 2023.
2023 Financial Outlook
Commenting on the outlook, Enlight Chief Financial Officer Nir Yehuda noted, “We are pleased to affirm our Revenue and Adjusted EBITDA guidance for 2023. This guidance is based on our current operational portfolio and planned CODs over the course of the year. Our Revenue and Adjusted EBITDA guidance does not include certain proceeds from the sale of electricity for our projects treated as Financial Assets. Similarly, our Adjusted EBITDA outlook does not include tax credits expected to be recognized upon COD of Apex Solar.”
Details of the 2023 outlook include:
- Revenue between $290m and $300m
- Adjusted EBITDA* between $188m and $198m
- $15m of proceeds from the sale of electricity with respect to projects treated as Financial Assets which are not recognized as revenue nor included in Adjusted EBITDA
* The section titled “Non-IFRS Financial Measures” below contains a description of Adjusted EBITDA, a non-IFRS financial measure discussed in this press release. A reconciliation between Adjusted EBITDA and Net Income, its most directly comparable IFRS financial measure, is contained in the tables below. The Company is unable to provide a reconciliation of Adjusted EBITDA to Net Income on a forward-looking basis without unreasonable effort because items that impact this IFRS financial measure are not within the Company’s control and/or cannot be reasonably predicted. These items may include, but are not limited to, forward-looking depreciation and amortization, share based compensation, other income, finance income, finance expenses, share of losses of equity accounted investees and taxes on income. Such information may have a significant, and potentially unpredictable, impact on the Company’s future financial results. We note that “Adjusted EBITDA” measures that we disclosed in previous filings in Israel were not comparable to “Adjusted EBITDA” disclosed in the release and in our future filings.