エドガーで原本を確認する
|
|
|
|
|
KENON HOLDINGS LTD.
|
|
|
|
|
|
|
Date: August 23, 2023
|
By:
|
/s/ Robert L. Rosen
|
|
|
Name:
|
Robert L. Rosen
|
|
|
Title:
|
Chief Executive Officer
|
| 1. |
Executive Summary1
|
|
For the
|
For the
|
|||||||||||||||||||||||
|
Six Months Ended
|
Three Months Ended
|
|||||||||||||||||||||||
|
June 30
|
June 30
|
|||||||||||||||||||||||
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
|||||||||||||||||||
|
Adjusted EBITDA* after proportionate
|
||||||||||||||||||||||||
|
consolidation – consolidated
|
434
|
325
|
34
|
%
|
159
|
87
|
83
|
%
|
||||||||||||||||
|
Adjusted EBITDA* – Israel
|
210
|
146
|
44
|
%
|
92
|
26
|
254
|
%
|
||||||||||||||||
|
Adjusted EBITDA* after proportionate
|
||||||||||||||||||||||||
|
consolidation – U.S.
|
237
|
190
|
25
|
%
|
73
|
67
|
9
|
%
|
||||||||||||||||
|
Adjusted EBITDA* renewable energies – U.S.
|
19
|
20
|
(5
|
)%
|
12
|
12
|
–
|
|||||||||||||||||
|
Adjusted EBITDA* after proportionate
|
||||||||||||||||||||||||
|
consolidation energy transition – U.S.
|
268
|
208
|
29
|
%
|
87
|
72
|
21
|
%
|
||||||||||||||||
|
Net income (loss)
|
39
|
72
|
(46
|
)%
|
(40
|
)
|
(32
|
)
|
(25
|
)%
|
||||||||||||||
|
Adjusted income (loss)*
|
66 |
30
|
120
|
%
|
(37
|
)
|
(49
|
)
|
25
|
%
|
||||||||||||||
|
|
* |
Adjusted EBITDA after proportionate consolidation and net income – for additional information regarding the definition and manner of the calculation – see Section 4B below and Sections 4B, 4E and 5E of Report of the Board of Directors
which are included in the Periodic Report for 2022.
|
|
Israel
|
Increase of an average of about 9% in the electricity generation component compared with the corresponding quarter last year
Israel Land Authority tenders – win in a land tender of Israel Lands Authority for a consideration of about NIS 484 million, for rights in land involving
construction of facilities for solar generation of electricity, with a capacity of about 245 megawatts, together with storage, with a capacity of about 1,375 megawatts/hour. As at the date of the report, 20% of the consideration was paid and
the project is expected to continue development on the National Infrastructures Committee.
Commercial operation of the Zomet power plant (396 megawatts) in June 2023 – additional EBITDA for the activities in Israel in 2024 estimated at about NIS 145
million2.
Signing of an agreement with the Bazan group with a capacity of 125 megawatts, including for supply of green electricity – (50 megawatts entering into
effect gradually commencing from January 2025).
Initial consolidation of the Gat power plant (75 megawatts) starting from the end of the first quarter.
Savings on the cost of natural gas upon the commercial operation of the Karish reserve – annual savings estimated at NIS 60 million3.
|
| 1 |
The Executive Summary below is presented solely for convenience and it is not a substitute for reading the full detail (including with reference to the matters referred to in the Summary) as stated in this report with all its parts
(including warnings relating to “forward‑looking” information, definitions or explanations with respect to the indices for measurement of the results). This Summary includes estimates, plans and assessment of
the Company, which constitute “forward‑looking” information regarding which there is no certainty it will materialize and the readers are directed to the detail presented in this report below.
|
|
2
|
For details – see Section 10B.
|
| 3 |
For details – see Section 4C(2).
|
|
U.S.
|
Increase of about 21% in the adjusted EBITDA after proportionate consolidation of the energy transition segment – despite the decline in the energy
margins.
Start of construction of the Backbone project a solar project in Maryland (170 megawatts) – expectation of an enlarged ITC rate of 40% as a result of the IRA Law, at
an estimated investment cost (net of development fees and the tax partner) of about NIS 0.5 billion (about $155 million) and estimated EBITDA in the first full calendar year in the agreement period in the period of the PPA agreement of about
NIS 45 million (about $13 million)4.
Signing of an extension of the Valley financing agreement (total scope of the debt of $470 million – the share of the CPV Group 50%).
Signing of an agreement with a tax partner in Maple Hill – in the aggregate amount of about NIS 280 million (about $78 million), constituting about 40% of the
construction cost, in light of the increase of the ITC rate as a result of the IRA Law.
First‑time consolidation of the Mountain Wind wind projects (81.5 megawatts) commencing from the beginning of the second quarter – estimated EBITDA in a full calendar year in the period of the
PPA agreements in the amount of about NIS 45 million (about $13 million)5.
|
|
Group headquarters
|
Reconfirmation of a credit rating for the Company and its debentures of ‘ilA’ and an update of the rating outlook to negative.
|
| 4 |
For details – see Section 6A(2).
|
| 5 |
For details – see Section 4B(3).
|
| 2. |
Brief description of the areas of activity
|
| 3. |
Main Developments in the Business Environment
|
|
|
3.1 |
General
|
|
|
A. |
Macro‑economic environment (particularly changes in inflation and interest) – for details regarding significant changes in the macro‑economic environment in Israel and in the U.S., mainly during 2022 and as a result of the impact of
the business environment on the activities of the Group companies, among other things, the prices of energy, electricity and natural gas, tariffs in the Israeli electricity sector, the costs of executing construction projects, financing
expenses, currency exchange rates and the like – see Section 12 below.
|
|
Bank of
|
||||||||||||||||||||
|
Israel
|
Federal
|
NIS/$
|
||||||||||||||||||
|
Israeli
|
U.S.
|
interest
|
interest
|
exchange
|
||||||||||||||||
|
CPI
|
CPI
|
rate
|
rate
|
rate
|
||||||||||||||||
|
Proximate to the approval
|
||||||||||||||||||||
|
date of the report*
|
110.7
|
305.7
|
4.75
|
% |
5.25%–5.50
|
% |
3.773
|
|||||||||||||
|
At June 30, 2023
|
110.3
|
304.1
|
4.75
|
%
|
5.00%–5.25
|
%
|
3.700
|
|||||||||||||
|
At December 31, 2022
|
107.7
|
297.7
|
3.25
|
%
|
4.50%-4.25
|
%
|
3.519
|
|||||||||||||
|
At June 30, 2022
|
105.5
|
292.3
|
0.75
|
%
|
1.50%-1.75
|
%
|
3.500
|
|||||||||||||
|
Change:
|
||||||||||||||||||||
|
January–June 2023
|
2.5
|
%
|
2.1
|
%
|
1.5
|
%
|
0.75
|
%
|
5.1
|
%
|
||||||||||
|
January–June 2022
|
3.1
|
%
|
5.2
|
%
|
0.65
|
%
|
1.50
|
%
|
12.5
|
%
|
||||||||||
|
April–June 2023
|
1.4
|
%
|
1.1
|
%
|
0.5
|
%
|
0.25
|
%
|
2.4
|
%
|
||||||||||
|
April–June 2022
|
1.9
|
%
|
3.0
|
%
|
0.65
|
%
|
1.25
|
%
|
10.2
|
%
|
||||||||||
|
2022
|
5.3
|
%
|
7.1
|
%
|
3.2
|
%
|
4.25
|
%
|
13.2
|
%
|
||||||||||
|
* August 17, 2023.
|
||||||||||||||||||||
|
|
B. |
The Coronavirus and broad global impacts on raw‑material prices and the supply chain – for details regarding the impacts of the global trends that started against the background of the Coronavirus crisis and the Company’s estimate
regarding the continuation and scope thereof on the Group’s activities, if any – see Section 3.1B to the Report of the Board of Directors for 2022.
|
| 3. |
Main Developments in the Business Environment (Cont.)
|
|
|
3.2 |
Activities in Israel
|
|
|
C. |
Update of the electricity tariffs in the period of the report, including the brackets of the demand hours –
|
|
Period
|
2023
|
2022
|
Change
|
|||||||||
|
January–June average
|
30.66
|
27.77
|
+10
|
%
|
||||||||
|
April–June average
|
30.39
|
27.99
|
+9
|
%
|
||||||||
| 3. |
Main Developments in the Business Environment (Cont.)
|
|
|
3.2 |
Activities in Israel (Cont.)
|
|
|
C. |
Update of the electricity tariffs in the period of the report, including the brackets of the demand hours – (Cont.)
|
|
|
D. |
Supplementary arrangements and granting of a supply license to Rotem – in February 2023, the Electricity Authority published a proposed decision that includes application of benchmarks and granting of a supplier license to Rotem –
for additional details – see Section 3.2E of the Report of the Board of Directors for 2022 (“the Proposed Decision”). As at the approval date of the report, a final decision had not yet been published and the arrangements included as part of
the Proposed Decision had not yet entered into effect, where to the best of the Company’s knowledge, the Electricity Authority is expected to publish a decision regarding the matter. As at the approval date of the report, there is no
certainty regarding the final language of the arrangements that will be determined (if ultimately determined) and the scope of their impact. Based on the publication, the Proposed Decision creates uniformity regarding many aspects of the
regulation applicable to Rotem with that of the generation facilities that are authorized to execute bilateral transactions, and thus the arrangements should permit Rotem to operate in the energy market in a manner similar to that of the
other generation facilities that are authorized to execute bilateral transactions. In addition, as stated in Section 7.15.5.1 of Part A of the Periodic Report for 2022, in the Company’s estimation arrangements as stated in the proposed
decision are expected to settle certain disputes between Rotem and the System Operator. Accordingly, to the extent an arrangement is not determined regarding Rotem, as stated, and/or a different arrangement is determined or an arrangement
that does not include granting a supply license to Rotem, Rotem will be required to settle the disputes with the System Operator, as stated, and as at the approval date of the report, prior to the regulation having been clarified. the Company
is not able to estimate the impact of the said disputes on Rotem’s activities7.
|
| 6 |
For additional details – see Sections 7.2.4 and 7.10.2 of Part A of the Periodic Report for 2022. That stated in this Section with reference to the impacts of the update to the hourly demand brackets
constitutes “forward‑looking” information as it is defined in the Securities Law, 1968 which is based on the Company’s estimates and assumptions as at the date of the report and regarding which there is no certainty it will materialize.
Ultimately, the impact could be different than that stated, this being due to, among other things, the Company’s estimates with respect to the consumption profile not materializing, the manner of its distribution and/or the actual mix of
the customers and/or occurrence of one or more of the risk factors the Company is subject to.
|
| 7 |
For additional details – see Section 7.3.18.5 of Part A of the Periodic Report for 2022.
|
| 3. |
Main Developments in the Business Environment (Cont.)
|
|
|
3.3 |
Activities in the U.S.
|
|
|
E. |
Electricity and natural gas prices
|
|
For the
|
For the
|
|||||||||||||||||||||||
|
Six Months Ended
|
Three Months Ended
|
|||||||||||||||||||||||
|
Region
|
June 30
|
June 30
|
||||||||||||||||||||||
|
(Power Plant)
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
||||||||||||||||||
|
TETCO M3 (Shore, Valley)
|
2.21
|
6.75
|
(67
|
)%
|
1.50
|
6.78
|
(78
|
)%
|
||||||||||||||||
|
Transco Zone 5 North (Maryland)
|
2.67
|
7.76
|
(66
|
)%
|
2.17
|
8.04
|
(73
|
)%
|
||||||||||||||||
|
TETCO M2 (Fairview)
|
1.82
|
5.36
|
(66
|
)%
|
1.40
|
6.61
|
(79
|
)%
|
||||||||||||||||
|
Dominion South (Valley)
|
1.82
|
5.36
|
(66
|
)%
|
1.43
|
6.65
|
(78
|
)%
|
||||||||||||||||
|
Algonquin (Towantic)
|
3.57
|
10.41
|
(66
|
)%
|
2.02
|
7.19
|
(72
|
)%
|
||||||||||||||||
|
|
F. |
Electricity prices
|
|
For the
|
For the
|
|||||||||||||||||||||||
|
Six Months Ended
|
Three Months Ended
|
|||||||||||||||||||||||
|
Region
|
June 30
|
June 30
|
||||||||||||||||||||||
|
(Power Plant)
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
||||||||||||||||||
|
PJM West (Shore and Maryland)
|
31.29
|
66.49
|
(53
|
)%
|
29.47
|
77.27
|
(62
|
)%
|
||||||||||||||||
|
PJM AD Hub (Fairview)
|
30.04
|
62.85
|
(52
|
)%
|
29.04
|
77.06
|
(62
|
)%
|
||||||||||||||||
|
NY‑ISO Zone G (Valley)
|
34.57
|
83.18
|
(58
|
)%
|
27.13
|
71.80
|
(62
|
)%
|
||||||||||||||||
|
ISO‑NE Mass Hub (Towantic)
|
39.76
|
89.87
|
(56
|
)%
|
29.07
|
69.25
|
(58
|
)%
|
||||||||||||||||
| 3. |
Main Developments in the Business Environment (Cont.)
|
|
|
3.3 |
Activities in the U.S. (Cont.)
|
|
|
G. |
Electricity margin in the operating markets of the CPV Group (Spark Spread)
|
|
For the
|
For the
|
|||||||||||||||||||||||
|
Six Months Ended
|
Three Months Ended
|
|||||||||||||||||||||||
|
Power Plant
|
June 30
|
June 30
|
||||||||||||||||||||||
|
(Region)
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
||||||||||||||||||
|
Shore
(PJM West/TETCO M3)
|
16.03
|
19.88
|
(19
|
)%
|
19.12
|
30.46
|
(37
|
)%
|
||||||||||||||||
|
Maryland
(PJM West/Transco Zn 5N)
|
12.83
|
12.97
|
(1
|
)%
|
14.47
|
21.80
|
(34
|
)%
|
||||||||||||||||
|
Valley
(NY-ISO Zone G/30% Dominion South, 70% TETCO M3)
|
20.12
|
39.46
|
(49
|
)%
|
16.94
|
25.28
|
(33
|
)%
|
||||||||||||||||
|
Towantic
(ISO-NE Mass Hub/Algonquin)
|
16.55
|
22.18
|
(25
|
)%
|
15.92
|
22.53
|
(29
|
)%
|
||||||||||||||||
|
Fairview
(PJM AD Hub/TETCO M2)
|
18.19
|
28.01
|
(35
|
)%
|
19.94
|
34.13
|
(42
|
)%
|
||||||||||||||||
|
|
* |
Based on Day‑Ahead prices as shown in the above tables, with a discount for the thermal conversion ratio (heat rate) of 6.9 MMBtu/MWh for Maryland, Shore and Valley, and a thermal conversion ratio of 6.5 MMBtu/MWh for Towantic and
Fairview. It is clarified that the actual energy margins of the power plants of the CPV Group could be significantly different.
|
| 3. |
Main Developments in the Business Environment (Cont.)
|
|
|
3.3 |
Activities in the U.S. (Cont.)
|
|
|
H. |
Capacity payments
|
|
Sub-Region
|
CPV Plants8
|
2024/2025
|
2023/2024
|
2022/2023
|
2021/2022
|
|
PJM RTO
|
28.92
|
34.13
|
50
|
140
|
|
|
PJM COMED
|
Three Rivers
|
28.92
|
34.13
|
-
|
-
|
|
PJM MAAC
|
Fairview, Maryland, Maple Hill
|
49.49
|
49.49
|
95.79
|
140
|
|
PJM EMAAC
|
Shore
|
54.95
|
49.49
|
97.86
|
165.73
|
| 3. |
Main Developments in the Business Environment (Cont.)
|
|
|
3.3 |
Activities in the U.S. (Cont.)
|
|
|
H. |
Capacity payments (Cont.)
|
|
Sub-Area
|
CPV
Plants
|
Summer 2023
|
Winter 2022/2023
|
Summer 2022
|
Winter 2021/2022
|
|
NYISO
Rest of the Market
|
–
|
153.26
|
39.12
|
110.87
|
33.15
|
|
Lower Hudson Valley
|
Valley
|
164.35
|
43.43
|
151.63
|
33.48
|
| 3. |
Main Developments in the Business Environment (Cont.)
|
|
|
3.3 |
Activities in the U.S. (Cont.)
|
|
|
H. |
Capacity payments (Cont.)
|
|
Sub-Region
|
CPV Power Plants
|
2026/2027
|
2025/2026
|
|
ISO-NE
Rest of the Market
|
Towantic
|
85.15
|
85.15
|
|
|
I. |
The Inflation Reduction Act (IRA) – for additional details regarding the IRA Law, which grants significant tax benefits to projects involving renewable energies and carbon capture technologies, and the impact thereof on the construction and
development projects of the CPV Group – see Section 3.3H of the Report of the Board of Directors for 2022.
|
| 4. |
Results of operations for the six‑month period ended June 30, 2023 (in millions of NIS)
|
| 4. |
Results of operations for the six‑month period ended June 30, 2023 (in millions of NIS) (Cont.)
|
|
|
A. |
Statement of income9
|
|
For the six months ended
|
|||||||||
|
Section
|
June 30
|
Board’s explanations
|
|||||||
|
2023
|
2022
|
||||||||
|
Revenues from sales and provision of services (1)
|
1,120
|
873
|
For details – see this Section below.
|
||||||
|
Cost of sales and provision of services (without depreciation and amortization) (2)
|
834
|
643
|
For details – see this Section below.
|
||||||
|
Depreciation and amortization
|
110
|
86
|
The increase stems mainly from depreciation expenses of Gat and Mountain Wind projects that were consolidated for the first time in the second quarter
of 2023
|
||||||
|
Gross profit
|
176
|
144
|
For details – see Sections C and D below.
|
||||||
|
Administrative and general expenses
|
117
|
96
|
For details – see Sections C and D below.
|
||||||
|
Share in earnings of associated companies10
|
100
|
66
|
For details – see Section D below.
|
||||||
|
Business development expenses
|
30
|
23
|
|||||||
|
Other expenses, net
|
5
|
–
|
|||||||
|
Operating income
|
124
|
91
|
|||||||
|
Financing income (expenses), net
|
(73
|
)
|
8
|
For details – see this Section below.
|
|||||
|
Income before taxes on income
|
51
|
99
|
|||||||
|
Taxes on income expenses
|
12
|
27
|
The decrease in the taxes on income is parallel to the decrease in the income before taxes on income.
|
||||||
|
Net income for the period
|
39
|
72
|
Net income of about NIS 39 million in the period of the report and about NIS 67 million in the corresponding period last year is attributable to the
Company’s shareholders and the balance is attributable to the holders of the non‑controlling interests.
|
||||||
|
Adjustments
|
27
|
(42
|
)
|
For details – see Section F below.
|
|||||
|
Adjusted net income for the period11
|
66
|
30
|
Adjusted net income for the period of about NIS 58 million in the period of the report and about NIS 22 million in the corresponding period last year is
attributable to the Company’s shareholders and the balance is attributable to the holders of the non‑controlling interests.
|
||||||
| 9 |
The results of the associated companies in the U.S. (mainly in the Energy Transition segment) are presented in the category “Company’s share in earnings of associated
companies”.
|
| 4. |
Results of operations for the six‑month period ended June 30, 2023 (in millions of NIS) (Cont.)
|
|
|
A. |
Statement of income (Cont.)
|
|
Revenues
|
For the
Six Months Ended
June 30
|
Board’s Explanations
|
|||||||
|
2023
|
2022
|
||||||||
|
Revenues in Israel
|
|||||||||
|
Revenues from sale of energy to private customers
|
624
|
536
|
The increase stems mainly from an increase in customer consumption and an increase in the generation component, in the aggregate amount of about NIS 135
million, offset by a decrease, in the amount of about NIS 68 million, which is a result of the impact in the change of the hourly demand brackets (as detailed Section 3.2C, above and Section C below), and an increase, in the amount of about NIS
23 million, due to consolidation of Gat for the first time in the second quarter of 2023.
|
||||||
|
Revenues from private customers in respect of infrastructure services
|
235
|
144
|
The increase, stems mainly from an increase in the infrastructure tariff and an increase in customer consumption, in the amounts of about NIS 54 million
and about NIS 29 million, respectively, and an increase of about NIS 8 million due to consolidation of Gat for the first time in the second quarter of 2023.
|
||||||
|
Revenues from sale of energy to the System Operator and to other suppliers
|
65
|
57
|
The increase stems mainly from consolidation of Gat for the first time in the second quarter of 2023.
|
||||||
|
Revenues from sale of steam
|
31
|
30
|
|||||||
|
Other revenues
|
43
|
14
|
Most of the increase stems from sale of electricity from the Zomet power plant prior to the commercial operation, which took place in June 2023.
|
||||||
|
Total revenues in Israel
|
998
|
781
|
|||||||
|
Revenues in the U.S.
|
|||||||||
|
Revenues from sale of electricity from renewable energy
|
60
|
47
|
The increase derives mainly from the first‑time consolidation of the results of Mountain Wind project in the second quarter of 2023.
|
||||||
|
Revenues from provision of services (under others)
|
62
|
45
|
The increase stems mainly from an increase in the scope of the services provided to development projects.
|
||||||
|
Total revenues in the U.S.
|
122
|
92
|
|||||||
|
Total revenues
|
1,120
|
873
|
|||||||
| 4. |
Results of operations for the six‑month period ended June 30, 2023 (in millions of NIS) (Cont.)
|
|
|
A. |
Statement of income (Cont.)
|
|
|
(2) |
Changes in the cost of sales and provision of services (not including depreciation and amortization):
|
|
Cost of Sales and
Provision of Services
|
For the
Six Months Ended |
Board’s Explanations
|
|||||||
|
June 30
|
|||||||||
|
2023
|
2022
|
||||||||
|
Cost of sales in Israel
|
|||||||||
|
Natural gas and diesel oil
|
286
|
223
|
The increase stems mainly from an increase in the gas expenses, in the amount of about NIS 32 million, deriving from an increase in the natural gas tariff as a result
of an increase in the generation component and the shekel/dollar exchange rate, the amount of about NIS 45 million deriving from an increase in the quantity of the gas consumed against the background of maintenance work at the Rotem and
Hadera power plants in the corresponding period last year, and an increase of about NIS 19 million due to consolidation of the results of Gat for the first time in the second quarter of 2023. On the other hand, there was a decrease in the gas
expenses, in the amount of about NIS 32 million, deriving from entry of the Energean agreement into effect commencing from the second quarter of 2023 (of which about NIS 18 million stemming from a contractual monetary amount that Rotem and
Hadera are entitled to from Energean that was recognized in the first quarter, as described in Note 8A(3) to the Interim Statements).
|
||||||
|
Expenses in respect of acquisition of energy
|
126
|
162
|
A decrease, in the amount of about NIS 81 million, against the background of maintenance work at the Rotem and Hadera power plants in the corresponding
period last year, offset by an increase, in the amount of about NIS 48 million, deriving from an increase in consumption by customers in the period of the report.
|
||||||
|
Expenses in respect of infrastructure services
|
235
|
144
|
The increase stems mainly from an increase in the infrastructure tariff and an increase in customer consumption, in the amounts of about NIS 54 million
and about NIS 29 million, respectively, and an increase of about NIS 8 million due to consolidation of Gat for the first time in the second quarter of 2023.
|
||||||
|
Cost of transmission of gas
|
16
|
16
|
|||||||
|
Operating expenses
|
44
|
42
|
|||||||
|
Other expenses
|
56
|
11
|
Most of the increase stems from natural gas and other expenses at the Zomet power plant prior to the commercial operation, which took place in June 2023.
|
||||||
|
Total cost of sales in Israel
|
763
|
598
|
|||||||
| 4. |
Results of operations for the six‑month period ended June 30, 2023 (in millions of NIS) (Cont.)
|
|
|
A. |
Statement of income (Cont.)
|
|
|
(2) |
Changes in the cost of sales and provision of services (not including depreciation and amortization): (Cont.)
|
|
Cost of sales and services in the U.S.
|
|||||||||
|
Cost of sales in respect of sale of electricity from renewable energy
|
20
|
13
|
The increase stems mainly from the first‑time consolidation of the Mountain Wind project in the second quarter of 2023.
|
||||||
|
Cost in respect provision of services (under others)
|
51
|
32
|
Most of the increase is parallel to the increase in the scope of the services provided to projects.
|
||||||
|
Total cost of sales and provision of services in the U.S.
|
71
|
45
|
|||||||
|
Total cost of sales and provision of services
|
834
|
643
|
|||||||
|
|
(3) |
Changes in the financing expenses, net
|
| 4. |
Results of operations for the six‑month period ended June 30, 2023 (in millions of NIS) (Cont.)
|
|
|
B. |
EBITDA, FFO and net cash flows after service of the project debt
|
|
|
1. |
EBITDA indices
|
|
|
– |
“EBITDA in the consolidated statements”: net income (loss) for the period before depreciation and amortization, net financing expenses or income, taxes on income and other income (expenses), net.
|
|
|
– |
“EBITDA after proportionate consolidation”: “EBITDA in the consolidated statements” after eliminating the share in the income (losses) of associated companies and after a proportionate consolidation of the EBITDA of the associated
companies based on the rate of holdings of the CPV Group therein.
|
|
|
– |
“Adjusted EBITDA after proportionate consolidation: “EBITDA” after adjustments in respect of changes in the fair value of derivative financial instruments and items that are not in the ordinary course of the Group’s business and/or that
are of a non‑recurring nature (for details regarding adjustments in the period – Section F below).
|
|
|
2. |
FFO – the Company defines FFO (Funds From Operations) as cash flows from operating activities for the period (including changes in the working capital) less investments in property, plant and equipment and periodic maintenance costs
that are not included in the current operating activities and less net interest payments.
|
|
|
3. |
Net cash flows after service of the project debt – the Company defines net cash flows after service of the project debt for the period as FFO after adjustments in respect of payment of principal on project loans, and change in other credit
from banks and change in restricted cash and deposits (including for securing transactions hedging electricity margins).
|
| 12 |
It is noted that other companies might define the EBITDA and FFO indices differently.
|
| 4. |
Results of operations for the six‑month period ended June 30, 2023 (in millions of NIS) (Cont.)
|
|
|
B. |
EBITDA, FFO and net cash flows after service of the project debt (Cont.)
|
|
For the
|
||||||||
|
Six Months Ended
|
||||||||
|
June 30
|
||||||||
|
2023
|
2022
|
|||||||
|
Revenues from sales and provision of services
|
1,120
|
873
|
||||||
|
Cost of sales (without depreciation and amortization)
|
(834
|
)
|
(643
|
)
|
||||
|
Administrative and general expenses (without depreciation and
|
||||||||
|
amortization)
|
(110
|
)
|
(91
|
)
|
||||
|
Business development expenses
|
(30
|
)
|
(23
|
)
|
||||
|
Share in income of associated companies
|
100
|
66
|
||||||
|
Consolidated EBITDA
|
246
|
182
|
||||||
|
Elimination of the share in income of associated companies
|
(100
|
)
|
(66
|
)
|
||||
|
Addition of the share of Group in proportionate EBITDA of
|
||||||||
|
associated companies (1)
|
254
|
198
|
||||||
|
EBITDA after proportionate consolidation
|
400
|
314
|
||||||
|
Adjustments – see detail in Section E below
|
34
|
11
|
||||||
|
Adjusted EBITDA after proportionate consolidation
|
434
|
325
|
||||||
|
|
(1) |
Calculation of the Group’s share in the proportionate EBITDA of associated companies (in millions of NIS):
|
|
For the
|
||||||||
|
Six Months Ended
|
||||||||
|
June 30
|
||||||||
|
2023
|
2022
|
|||||||
|
Revenues from availability payments
|
115
|
120
|
||||||
|
Revenues from sales of energy and other
|
462
|
912
|
||||||
|
Cost of sales – natural gas (without depreciation and amortization)
|
(236
|
)
|
(579
|
)
|
||||
|
Cost of sales – other expenses (without depreciation and
|
||||||||
|
amortization)
|
(138
|
)
|
(136
|
)
|
||||
|
Gain (loss) from realization of transactions hedging the electricity margins
|
79
|
(99
|
)
|
|||||
|
Changes in fair value of forward transactions in hedging plans
|
||||||||
|
of the electricity margins
|
(16
|
)
|
(10
|
)
|
||||
|
Administrative and general expenses (without depreciation and
|
||||||||
|
amortization)
|
(12
|
)
|
(10
|
)
|
||||
|
Group’s share in proportionate EBITDA of associated companies
|
254
|
198
|
||||||
|
Adjustments in respect of associated companies (see detail in
|
||||||||
|
Section F below)
|
16
|
10
|
||||||
|
Group’s share in proportionate adjusted EBITDA of associated
|
||||||||
|
companies
|
270
|
208
|
||||||
| 4. |
Results of operations for the six‑month period ended June 30, 2023 (in millions of NIS) (Cont.)
|
|
|
B. |
EBITDA and Adjusted EBITDA (Cont.)
|
|
|
(2) |
Set forth below is a breakdown of the adjusted EBITDA after proportionate consolidation data broken down by the subsidiaries (on a consolidated basis) and the associated companies (on a proportionate basis, based on the rate of the
holdings of the CPV Group therein) (in NIS millions):
|
|
Basis of
presentation
in the
Company’s
financial
statements
|
For the
Six Months Ended
June 30
|
||||||||
|
2023
|
2022
|
||||||||
|
Total operating projects in (see Section 4B(3) below)
|
Consolidated
|
228
|
158
|
||||||
|
Business development costs, headquarters in Israel and others
|
Consolidated
|
(18
|
)
|
(12
|
)
|
||||
|
Total Israel
|
210
|
146
|
|||||||
|
Total operating projects (see Section 4B(3) below)
|
Associate
|
270
|
210
|
||||||
|
Other costs
|
Consolidated
|
(2
|
)
|
(2
|
)
|
||||
|
Total energy transition in the U.S.
|
268
|
208
|
|||||||
|
Total operating projects in Israel (see Section 4B(3) below)
|
Consolidated
|
36
|
32
|
||||||
|
Development costs of renewable energy
|
Consolidated
|
(17
|
)
|
(12
|
)
|
||||
|
Total renewable energy in the U.S.
|
19
|
20
|
|||||||
|
Total activities under other segments
|
Consolidated
|
(3
|
)
|
1
|
|||||
|
Headquarters in the United States13
|
Consolidated
|
(47
|
)
|
(39
|
)
|
||||
|
Total United States
|
237
|
190
|
|||||||
|
Company headquarters (not allocated to the segments)
|
Consolidated
|
(13
|
)
|
(11
|
)
|
||||
|
Adjusted EBITDA after proportionate consolidation
|
434
|
325
|
|||||||
| 4. |
Results of operations for the six‑month period ended June 30, 2023 (in millions of NIS) (Cont.)
|
|
|
B. |
EBITDA and Adjusted EBITDA (Cont.)
|
|
|
(3) |
Set forth below is additional information regarding the revenues, adjusted EBITDA, FFO and net cash flows after service of the project debt of the Group’s active power plants broken down by the subsidiaries (on a consolidated basis) and the
associated companies (on a proportionate basis, based on the rate of the holdings of the CPV Group therein) (in NIS millions):
|
|
For the six months ended
|
For the six months ended
|
||||||||||||||||||||||||||||||||
|
June 30, 2023
|
June 30, 2022
|
||||||||||||||||||||||||||||||||
|
Net
|
Net
|
||||||||||||||||||||||||||||||||
|
|
Basis of
|
Adjusted
|
cash
|
Adjusted
|
cash
|
||||||||||||||||||||||||||||
|
|
presentation
|
EBITDA
|
flows
|
EBITDA
|
flows
|
||||||||||||||||||||||||||||
|
|
in the
|
after
|
after
|
after
|
after
|
||||||||||||||||||||||||||||
|
Main
|
Company’s
|
proportionate
|
service of
|
proportionate
|
service of
|
||||||||||||||||||||||||||||
|
projects in
|
financial
|
consol-
|
project
|
consol-
|
project
|
||||||||||||||||||||||||||||
|
operation
|
statements
|
Revenues
|
idation
|
FFO
|
debt
|
Revenues
|
idation
|
FFO
|
debt
|
||||||||||||||||||||||||
|
Rotem14
|
Consolidated
|
579
|
174
|
149
|
149
|
522
|
132
|
72
|
72
|
||||||||||||||||||||||||
|
Hadera
|
Consolidated
|
180
|
42
|
24
|
3
|
156
|
26
|
11
|
(5
|
)
|
|||||||||||||||||||||||
|
Zomet15
|
Consolidated
|
4
|
2
|
–
|
–
|
–
|
–
|
–
|
–
|
||||||||||||||||||||||||
|
Gat16 17
|
Consolidated
|
46
|
10
|
(1
|
)
|
(1
|
)
|
–
|
–
|
–
|
–
|
||||||||||||||||||||||
|
Total operating projects in Israel
|
809
|
228
|
172
|
151
|
678
|
158
|
83
|
67
|
|||||||||||||||||||||||||
|
Fairview
|
Associated (25%)
|
156
|
90
|
88
|
8
|
116
|
31
|
19
|
8
|
||||||||||||||||||||||||
|
Towantic
|
Associated (26%)
|
149
|
63
|
38
|
(30
|
)
|
209
|
37
|
29
|
7
|
|||||||||||||||||||||||
|
Maryland18
|
Associated (25%)
|
107
|
22
|
8
|
5
|
79
|
19
|
3
|
1
|
||||||||||||||||||||||||
|
Shore19
|
Associated (37.53%)
|
105
|
10
|
(9
|
)
|
(9
|
)
|
122
|
23
|
(10
|
)
|
(1
|
)
|
||||||||||||||||||||
|
Valley
|
Associated (50%)
|
230
|
85
|
65
|
11
|
330
|
100
|
37
|
3
|
||||||||||||||||||||||||
|
Total energy transition in the U.S.20
|
747
|
270
|
190
|
(15
|
)
|
856
|
210
|
78
|
18
|
||||||||||||||||||||||||
|
Keenan
|
Consolidated
|
43
|
27
|
27
|
3
|
47
|
32
|
32
|
5
|
||||||||||||||||||||||||
|
Mountain Wind16
|
Consolidated
|
17
|
9
|
14
|
11
|
–
|
–
|
–
|
–
|
||||||||||||||||||||||||
|
Total renewable energy in the U.S.
|
60
|
36
|
41
|
14
|
47
|
32
|
32
|
5
|
|||||||||||||||||||||||||
|
14
|
Not including a deduction of amounts paid in respect of loans from shareholders of Rotem before the Veridis transaction (see Note 6B(2) of the financial statements) and intercompany taxes
paid for power plants in the consolidated tax reconciliation statement.
|
|
15
|
The financial results of the Zomet power plant were included starting from the commercial operation date, June 22, 2023.
|
|
16
|
The financial results of the projects were included starting from the initial consolidation date in the second quarter of 2023. The estimated EBITDA for a full calendar year of the
Mountain Wind project in the period of the PPA agreements is about NIS 45 million (about $13 million). That stated above with reference to the estimated EBITDA for a full calendar year constitutes “forward‑looking” information as it is
defined in the Securities Law, which is based on estimates of the CPV Group as at the date of the report and regarding which there is no certainty it will materialize. That stated might be impacted by, among other things, changes in the
PPA agreements, operating factors (including breakdowns or wind conditions), changes in financing or in the energy market or regulatory factors or as a result of occurrence of one or more of the risk factors to which the CPV Group is
exposed.
|
|
17
|
The FFO in the period of the report includes a payment of about NIS 8 million for significant planned maintenance work that was performed at Gat in the first quarter of 2023.
|
|
18
|
The FFO in the period of the report includes a payment in respect of the project for upgrade of facilities of the Maryland power plant, in the amount of about NIS 8 million.
|
|
19
|
The FFO in the period of the report includes a payment, in the amount of about NIS 17 million, in respect of significant planned maintenance work performed at Shore in the period of the
report.
|
|
20
|
It is noted that the financing agreements of the CPV Group including mechanisms of the “cash sweep” type in the framework of which all or part of the free cash flows from the project is
designated for repayment of the loan principal on a current basis plus the predetermined minimum repayment schedule with respect to every long‑term loan. Accordingly, there could be an acceleration of execution of repayments upon
occurrence of certain events and there are limitations on distributions to the owners. For additional details – see Section 9 below.
|
| 4. |
Results of operations for the six‑month period ended June 30, 2023 (in millions of NIS) (Cont.)
|
|
|
C. |
Analysis of the change in adjusted EBITDA – Israel segment
|
|
|
1. |
Energy margin – the decrease in the energy margin in the period of the report compared with the corresponding period last year stems mainly from an increase in the sales of energy, in the amount of about NIS 14 million, as a
result of an increase of consumption on the part of consumers and an increase, in the amount of about NIS 54 million. On the other hand, there was an increase in the natural gas prices as a result of the strengthening of the dollar against
the shekel, in the amount of about NIS 21 million, net, from a decline in the price of natural gas, in the amount of about NIS 14 million, as a result of entry into effect of the Energean agreement starting from the end of the first quarter
of 2023 (it is noted that in the Company’s estimation, upon commercial operation of the Karish reserve, an annual monetary savings is expected estimated at about NIS 60 million based on the average forecasted gas consumption of Rotem and
Hadera21). In addition, there has been a decline in the revenues due to the revision of the hourly demand brackets, in the aggregate amount of about NIS 68 million, of which, in the Company’s estimation, about NIS 33 million will
be returned in 2023 (about NIS 61 million of which in the third quarter of 2023) such that the total expected impact for 2023 is a decrease in revenues of about NIS 35 million. For additional details – see Section 3.2(C).
|
|
|
2. |
Availability due to maintenance work – during the corresponding period last year, the Rotem and Hadera power plants were shut down for different periods of time for purposes of maintenance work, which had a negative impact on their
results compared with the period of the report. For additional details – see Section 4C(3) to the Report of the Board of Directors for 2022.
|
|
|
3. |
One‑time events – in the first quarter of 2023, Rotem and Hadera recognized a contractual monetary amount it is entitled to from Energean, in the aggregate amount of about NIS 18 million further to amendment of the agreements from May
2022. The said amount is expected to be received in the beginning of 2024. For additional details – see Note 8A(3) to the Interim Statements.
|
| 4. |
Results of operations for the six‑month period ended June 30, 2023 (in millions of NIS) (Cont.)
|
|
|
D. |
Analysis of the change in adjusted EBITDA after proportionate consolidation – energy transition segment in the U.S.
|
|
|
1. |
Energy margin and availability (capacity) payments – as stated in Section 3.3F above, in the period of the report there was a significant decline in the energy margins compared with the corresponding period last year, and
correspondingly there was a decline, in the amount of about NIS 156 million, in the electricity margins of the CPV Group (on the assumption of full capacity). In addition, as detailed in Section 3.3H above regarding the availability tariffs,
there was a decrease, in the amount of about NIS 17 million, in the availability payments in the period of the report compared with the corresponding period last year.
|
|
|
2. |
Energy hedges22 – the said decrease in the electricity margins was offset, in the aggregate amount of about NIS 188 million compared with the corresponding period last year, due to hedges of the energy margin that were
made in 2022 and that were realized at a gain in the period of the report, and hedges made in 2021 that were realized at a loss in the corresponding period last year. For details regarding energy hedges for the balance of 2023 and 2024 – see
Section E below.
|
|
|
3. |
Availability due to maintenance work – most of the increase stems from maintenance work at the Valley and Towantic power plants in the corresponding period last year. For additional details – see Section 8.8 of the Company’s
Periodic Report for 2022.
|
| 4. |
Results of operations for the six‑month period ended June 30, 2023 (in millions of NIS) (Cont.)
|
|
|
E. |
Additional details regarding electricity hedges and guaranteed availability payments in the Energy Transition segment in the U.S.23
|
|
July–December 2023
|
2024
|
||
|
Scope of the hedged energy (% of the power plant’s capacity based on the expected generation)
|
24%
|
20%
|
|
|
Hedged energy margin (millions of $)
|
≈ 17 (≈ NIS 60 million)
|
≈ 29 (≈ NIS 105 million)
|
|
|
Hedged energy margin (MWH/$)
|
15.10
|
14.31
|
|
|
Future energy margin in the market (MWH/$)
|
15.75
|
17.11
|
|
|
|
(*) |
For details regarding the manner of calculation of the electricity margin (Spark Spread) – see Section 3.3G above.
|
|
July–December 2023
|
2024
|
|
|
Scope of the secured availability payments (% of the power plant’s capacity)
|
93%
|
81%
|
|
Availability payments (millions of $)
|
≈ 29 (≈ NIS 103 million)
|
≈ 50 (≈ NIS 179 million)
|
| 23 |
The estimated percentages and the actual hedged energy margins could change due to new hedges and/or sales of availability made or as a result of market conditions.
|
| 4. |
Results of operations for the six‑month period ended June 30, 2023 (in millions of NIS) (Cont.)
|
|
|
F. |
Adjustments to EBITDA and net income for the period of the report
|
|
For the six months ended
|
|||||||||
|
Section
|
June 30
|
Board’s explanations
|
|||||||
|
2023
|
2022
|
||||||||
|
Change in the fair value of derivative financial instruments in the U.S. (presented as part of the Company’s share of income of associated companies in the U.S.)
|
16
|
10
|
Represents the change in the fair value of derivative financial instruments that are used in programs for hedging electricity margins of the transition
generation energies segment in the U.S. and that were not designated for hedge accounting – for details see Section E above.
|
||||||
|
Change in net expenses, not in the ordinary course of business and/or of a non‑recurring natures
|
18
|
1
|
In the period of the report and in the corresponding period last year, represents test runs and other activities relating to the Company’s preparations for the
commercial operation of the Zomet power plant, which took place in June 2023.
|
||||||
|
Total adjustments to EBITDA
|
34
|
11
|
|||||||
|
Income from exchange rate differences in respect of intercompany loans (*)
|
–
|
(70
|
)
|
For details – see Section 4A(3) above.
|
|||||
|
Tax impact in respect of the adjustments
|
(7
|
)
|
17
|
||||||
|
Total adjustments to net income for the period
|
27
|
(42
|
)
|
||||||
| (*) |
For purposes of improving the comparability between the periods with respect to the adjusted net income data, the Company made a reconciliation to the net income in the six months and three months ended on June 30, 2022 in respect of income
that is not cash flow income from exchange rate differences from revaluation of intercompany loans that occurred from October 1, 2022 that were classified as part of the Group’s net investment in the U.S. and exchange rate differences in
respect thereof are recorded, commencing from that date, to other comprehensive income as part of the translation reserve.
|
| 4. |
Results of operations for the six‑month period ended June 30, 2023 (in millions of NIS) (Cont.)
|
|
|
G. |
Detail generation (in millions of kilowatt/hours)
|
|
For the six months ended June 30, 2023
|
For the six months ended June 30, 2022
|
|||||||||||||||||||||||||||||||||||
|
Potential
|
Net
|
Actual
|
Actual
|
Potential
|
Net
|
Actual
|
Actual
|
|||||||||||||||||||||||||||||
|
electricity
|
electricity
|
generation
|
availability
|
electricity
|
electricity
|
generation
|
availability
|
|||||||||||||||||||||||||||||
|
Capacity
|
generation
|
generation
|
percentage
|
percentage
|
generation
|
generation
|
percentage
|
percentage
|
||||||||||||||||||||||||||||
|
(MW)
|
(GWh)(1)
|
(GWh)(2)
|
(%)(3)
|
(%)
|
(GWh)
|
(GWh)
|
(%)
|
(%)
|
||||||||||||||||||||||||||||
|
Rotem
|
466
|
1,892
|
1,749
|
92.4
|
%
|
98.1
|
%
|
1,882
|
1,482
|
78.7
|
%
|
78.8
|
%
|
|||||||||||||||||||||||
|
Hadera
|
144
|
507
|
484
|
95.5
|
%
|
96.0
|
%
|
507
|
400
|
78.9
|
%
|
77.4
|
%
|
|||||||||||||||||||||||
|
Gat
|
75
|
156
|
154
|
98.6
|
%
|
100.0
|
%
|
–
|
–
|
–
|
–
|
|||||||||||||||||||||||||
|
Zomet
|
396
|
67
|
8
|
11.9
|
%
|
94.0
|
%
|
–
|
–
|
–
|
–
|
|||||||||||||||||||||||||
|
For the six months ended June 30, 2023
|
For the six months ended June 30, 2022
|
|||||||||||||||||||||||||||||||||||
|
Potential
|
Net
|
Actual
|
Actual
|
Potential
|
Net
|
Actual
|
Actual
|
|||||||||||||||||||||||||||||
|
electricity
|
electricity
|
generation
|
availability
|
electricity
|
electricity
|
generation
|
availability
|
|||||||||||||||||||||||||||||
|
Capacity
|
generation
|
generation
|
percentage
|
percentage
|
generation
|
generation
|
percentage
|
percentage
|
||||||||||||||||||||||||||||
|
(MW)
|
(GWh)(1)
|
(GWh)(2)
|
(%)(3)
|
(%)
|
(GWh)
|
(GWh)
|
(%)
|
(%)
|
||||||||||||||||||||||||||||
|
Energy transition projects (natural gas)
|
||||||||||||||||||||||||||||||||||||
|
Fairview
|
1,050
|
4,480
|
4,145
|
93.6
|
%
|
95.7
|
%
|
4,316
|
3,837
|
86,6
|
%
|
89.2
|
%
|
|||||||||||||||||||||||
|
Towantic
|
805
|
3,332
|
2,771
|
77.3
|
%
|
92.7
|
%
|
2,674
|
2,126
|
59.3
|
%
|
75.6
|
%
|
|||||||||||||||||||||||
|
Maryland
|
745
|
2,992
|
2,166
|
67.3
|
%
|
91.5
|
%
|
2,992
|
1,791
|
60.0
|
%
|
89.3
|
%
|
|||||||||||||||||||||||
|
Shore
|
725
|
2,156
|
1,471
|
46.7
|
%
|
67.6
|
%
|
2,947
|
1,887
|
60.0
|
%
|
92.6
|
%
|
|||||||||||||||||||||||
|
Valley
|
720
|
3,050
|
2,029
|
66.5
|
%
|
73.2
|
%
|
2,967
|
2,397
|
79.5
|
%
|
86.3
|
%
|
|||||||||||||||||||||||
|
Renewable energy projects
|
||||||||||||||||||||||||||||||||||||
|
Keenan II
|
152
|
659
|
122
|
18.6
|
%
|
95.9
|
%
|
659
|
146
|
22.2
|
%
|
92.8
|
%
|
|||||||||||||||||||||||
|
Mountain
Wind
|
82
|
121
|
48
|
28.6
|
%
|
89.1
|
%
|
–
|
–
|
–
|
–
|
|||||||||||||||||||||||||
| (*) |
Regarding the planned maintenance – see Sections 5C(2) and 5D(3) and Section 8.8 of the Company’s Periodic Report for 2022.
|
| (1) |
The potential generation is the gross generation capability during the period after planned maintenance and less the electricity used for the power plant’s internal purposes.
|
| (2) |
The net generation of electricity is the gross generation during the period less the electricity used for the power plant’s internal purposes.
|
| (3) |
The actual generation percentage is the quantity of the net electricity generated in the facilities compared with the maximum quantity that can be generated in the period
|
| 5. |
Results of operations for the three‑month period ended June 30, 2023 (in millions of NIS)
|
|
|
A. |
Statement of income
|
|
For the three months ended
|
|||||||||
|
Section
|
June 30
|
Board’s explanations
|
|||||||
|
2023
|
2022
|
||||||||
|
Revenues from sales and provision of services (1)
|
601
|
405
|
For details – see this Section below.
|
||||||
|
Cost of sales and provision of services (without depreciation and amortization) (2)
|
470
|
332
|
For details – see this Section below.
|
||||||
|
Depreciation and amortization
|
62
|
44
|
The increase stems mainly from depreciation expenses of Gat and Mountain Wind projects that were consolidated for the first time in the second quarter
of 2023
|
||||||
|
Gross profit
|
69
|
29
|
For details – see Sections C and D below.
|
||||||
|
Administrative and general expenses
|
58
|
48
|
For details – see Sections C and D below.
|
||||||
|
Share in earnings (losses) of associated companies
|
15
|
(29
|
) |
For details – see Section D below.
|
|||||
|
Business development expenses
|
15
|
13
|
|||||||
|
Other expenses, net
|
5
|
- | |||||||
|
Operating income (loss)
|
6
|
(61
|
)
|
||||||
|
Financing income (expenses), net (3)
|
(55
|
)
|
29
|
For details – see this Section below.
|
|||||
|
Loss before tax benefit
|
(49
|
)
|
(32
|
)
|
|||||
|
Taxes on income
|
(9
|
)
|
–
|
||||||
|
Net loss for the period
|
(40
|
)
|
(32
|
)
|
Net loss of about NIS 24 million in the second quarter of 2023 and about NIS 11 million in the corresponding quarter last year is attributable to the
Company’s shareholders and the balance is attributable to the holders of the non‑controlling interests.
|
||||
|
Adjustments
|
3
|
(17
|
)
|
For details – see Section E below.
|
|||||
|
Adjusted net loss for the period
|
(37
|
)
|
(49
|
)
|
Adjusted net loss of about NIS 21 million in the second quarter of 2023 and about NIS 38 million in the corresponding quarter last year is attributable
to the Company’s shareholders and the balance is attributable to the holders of the non‑controlling interests.
|
||||
| 5. |
Results of operations for the three‑month period ended June 30, 2023 (in millions of NIS) (Cont.)
|
|
|
A. |
Statement of income (Cont.)
|
|
Revenues
|
For the
|
Board’s Explanations
|
|||||||
|
Three Months Ended
|
|||||||||
|
June 30
|
|||||||||
|
2023
|
2022
|
||||||||
|
Revenues in Israel
|
|||||||||
|
Revenues from sale of energy to private customers
|
324
|
245
|
The increase stems mainly from an increase in customer consumption and an increase in the generation component, in the amount of about NIS 54 million,
and an increase of about NIS 23 million deriving from consolidation of the results of Gat for the first time in the second quarter of 2023.
|
||||||
|
Revenues from private customers in respect of infrastructure services
|
119
|
69
|
The increase stems from an increase in the infrastructure tariffs and an increase in customer consumption, in the amounts of about NIS 21 million and
about NIS 20 million, respectively, and an increase of about NIS 8 million due to consolidation of Gat for the first time in the second quarter of 2023.
|
||||||
|
Revenues from sale of energy to the System Operator and to other suppliers
|
42
|
17
|
The increase stems mainly from consolidation of Gat for the first time in the second quarter of 2023.
|
||||||
|
Revenues from sale of steam
|
14
|
16
|
|||||||
|
Other revenues
|
35
|
6
|
Most of the increase derives from sale of electricity from the Zomet power plant prior to the commercial operation, which took place in June 2023.
|
||||||
|
Total revenues in Israel
|
534
|
353
|
|||||||
|
Revenues in the U.S.
|
|||||||||
|
Revenues from sale of electricity from renewable energy
|
36
|
25
|
The increase stems mainly from the first‑time consolidation of the Mountain Wind project in the second quarter of 2023.
|
||||||
|
Revenues from provision of services (under others)
|
31
|
27
|
|||||||
|
Total revenues in the U.S.
|
67
|
52
|
|||||||
|
Total revenues
|
601
|
405
|
|||||||
| 5. |
Results of operations for the three‑month period ended June 30, 2023 (in millions of NIS) (Cont.)
|
|
|
A. |
Statement of income (Cont.)
|
|
|
(2) |
Changes in the cost of sales and provision of services (not including depreciation and amortization):
|
|
Cost of Sales and
Provision of Services
|
For the
|
Board’s Explanations
|
|||||||
|
Three Months Ended June 30
|
|||||||||
|
2023
|
2022
|
||||||||
|
Cost of sales in Israel
|
|||||||||
|
Natural gas and diesel oil
|
153
|
100
|
An increase, in the amount of about NIS 14 million, stemming from an increase in the gas tariff as a result of an increase in the generation component tariff and the
shekel/dollar exchange rate, an increase of about NIS 36 million in the quantities of gas consumed against the background of the maintenance work at the Rotem and Hadera power plants in the corresponding quarter last year, and an increase of
about NIS 19 million, due to consolidation of Gat for the first time in the second quarter of 2023. On the other hand, there was a decrease in the gas expenses of about NIS 14 million, deriving from entry of the Energean agreement into effect
commencing from the end of the first quarter of 2023.
|
||||||
|
Expenses in respect of acquisition of energy
|
83
|
105
|
A decrease of about NIS 59 million against the background of the maintenance work at the Rotem and Hadera power plants in the corresponding quarter last
year, offset by an increase of about NIS 38 million stemming from an increase in customer consumption compared with the corresponding quarter last year.
|
||||||
|
Expenses in respect of infrastructure services
|
119
|
69
|
The increase stems from an increase in the infrastructure tariff and an increase in customer consumption, in the amounts of about NIS 21 million and
about NIS 20 million, respectively, and an increase of about NIS 8 million due to consolidation of Gat for the first time in the second quarter of 2023.
|
||||||
|
Cost of transmission of gas
|
9
|
8
|
|||||||
|
Operating expenses
|
23
|
22
|
|||||||
|
Other expenses
|
44
|
5
|
The increase stems mainly from a test run and other activities relating to the commercial operation of the Zomet power plant, which took place in June
2023.
|
||||||
|
Total cost of sales in Israel
|
431
|
309
|
|||||||
|
Cost of sales and services in the U.S.
|
|||||||||
|
Cost of sales in respect of sale of electricity from renewable energy
|
12
|
7
|
The increase stems mainly from the first‑time consolidation of the Mountain Wind project.
|
||||||
|
Cost in respect provision of services (under others)
|
27
|
16
|
Most of the increase is parallel to the increase in the scope of the services provided to development projects.
|
||||||
|
Total cost of sales and provision of services in the U.S.
|
39
|
23
|
|||||||
|
Total cost of sales and provision of services
|
470
|
332
|
|||||||
| 5. |
Results of operations for the three‑month period ended June 30, 2023 (in millions of NIS) (Cont.)
|
|
|
A. |
Statement of income (Cont.)
|
|
|
(3) |
Changes in the financing expenses, net
|
| 5. |
Results of operations for the three‑month period ended June 30, 2023 (in millions of NIS) (Cont.)
|
|
|
B. |
EBITDA calculations, including adjusted EBITDA after proportionate consolidation24 (in millions of NIS):
|
|
For the
|
||||||||
|
Three Months Ended
|
||||||||
|
June 30
|
||||||||
|
2023
|
2022
|
|||||||
|
Revenues from sales and provision of services
|
601
|
405
|
||||||
|
Cost of sales (without depreciation and amortization)
|
(470
|
)
|
(332
|
)
|
||||
|
Administrative and general expenses (without depreciation and
|
||||||||
|
amortization)
|
(55
|
)
|
(45
|
)
|
||||
|
Business development expenses
|
(15
|
)
|
(13
|
)
|
||||
|
Share in income (losses) of associated companies
|
15
|
(29
|
)
|
|||||
|
Consolidated EBITDA
|
76
|
(14
|
)
|
|||||
|
Elimination of the share of income (losses) of associated companies
|
(15
|
)
|
29
|
|||||
|
Addition of the Group’s share in proportionate EBITDA of associated
|
||||||||
|
companies (1)
|
94
|
38
|
||||||
|
EBITDA proportionate consolidation
|
155
|
53
|
||||||
|
Adjustments – see detail in Section E below
|
4
|
34
|
||||||
|
Adjusted EBITDA after proportionate consolidation
|
159
|
87
|
||||||
|
|
(1) |
Calculation of the Group’s share in proportionate EBITDA of associated companies (in millions of NIS):
|
|
For the
|
||||||||
|
Three Months Ended
|
||||||||
|
June 30
|
||||||||
|
2023
|
2022
|
|||||||
|
Revenues from availability payments
|
58
|
60
|
||||||
|
Revenues from sales of energy and other
|
187
|
437
|
||||||
|
Cost of sales – natural gas (without depreciation and amortization)
|
(78
|
)
|
(284
|
)
|
||||
|
Cost of sales – other expenses (without depreciation and
|
||||||||
|
amortization)
|
(70
|
)
|
(79
|
)
|
||||
|
Loss from realization of transactions hedging the electricity
|
||||||||
|
margins
|
(4
|
)
|
(58
|
)
|
||||
|
Changes in fair value of forward transactions in hedging plans
|
||||||||
|
of the electricity margins
|
7
|
(33
|
)
|
|||||
|
Administrative and general expenses (without depreciation and
|
||||||||
|
amortization)
|
(6
|
)
|
(5
|
)
|
||||
|
Group’s share of proportionate EBITDA of associated companies
|
94
|
38
|
||||||
|
Adjustments in respect of associated companies (see detail in
|
||||||||
|
Section E below)
|
(7
|
)
|
33
|
|||||
|
Group’s share of proportionate adjusted EBITDA of associated
|
||||||||
|
companies
|
87
|
71
|
||||||
| 24 |
For details regarding the definitions of the “EBITDA” indices, “FFO” and “cash flow after service of project debt” – see Section 4B above.
|
| 5. |
Results of operations for the three‑month period ended June 30, 2023 (in millions of NIS) (Cont.)
|
|
|
B. |
EBITDA and Adjusted EBITDA (Cont.)
|
|
|
(2) |
Set forth below is a breakdown of the adjusted EBITDA after proportionate consolidation data broken down by the subsidiaries (on a consolidated basis) and the associated companies (on a proportionate basis, based on the rate of the
holdings of the CPV Group therein):
|
|
Basis of
presentation
in the
Company’s
financial
statements
|
For the
Three Months Ended
June 30
|
||||||||
|
2023
|
2022
|
||||||||
|
Total operating projects (see Section 5B(3) below)
|
Consolidated
|
101
|
32
|
||||||
|
Business development costs, headquarters and others
|
Consolidated
|
(9
|
)
|
(6
|
)
|
||||
|
Total Israel
|
92
|
26
|
|||||||
|
Total operating projects (see Section 5B(3) below)
|
Associate
|
87
|
72
|
||||||
|
Total energy transition in the U.S.
|
87
|
72
|
|||||||
|
Total operating projects (see Section 5B(3) below)
|
Consolidated
|
20
|
18
|
||||||
|
Development costs of renewable energy and others
|
Consolidated
|
(8
|
)
|
(6
|
)
|
||||
|
Total renewable energy in the U.S.
|
12
|
12
|
|||||||
|
Total activities under other segments
|
Consolidated
|
(3
|
)
|
2
|
|||||
|
Headquarters in the United States25
|
Consolidated
|
(23
|
)
|
(19
|
)
|
||||
|
Total United States
|
73
|
67
|
|||||||
|
Company headquarters (not allocated to the segments)
|
Consolidated
|
(6
|
)
|
(6
|
)
|
||||
|
Adjusted EBITDA after proportionate consolidation
|
159
|
87
|
|||||||
| 5. |
Results of operations for the three‑month period ended June 30, 2023 (in millions of NIS) (Cont.)
|
|
|
B. |
EBITDA and Adjusted EBITDA (Cont.)
|
|
|
(3) |
Set forth below is additional information regarding the revenues, adjusted EBITDA, FFO and net cash flows after debt service of the Group’s active power plants broken down by the subsidiaries (on a consolidated basis) and the associated
companies (on a proportionate basis, based on the rate of the holdings of the CPV Group therein) (in NIS millions):
|
|
For the three months ended
|
For the three months ended
|
|||||||||||||||||||||||||||||||||
|
June 30, 2023
|
June 30, 2022
|
|||||||||||||||||||||||||||||||||
|
Net
|
Net
|
|||||||||||||||||||||||||||||||||
|
|
Basis of
|
Adjusted
|
cash
|
Adjusted
|
cash
|
|||||||||||||||||||||||||||||
|
|
presentation
|
EBITDA
|
flows
|
EBITDA
|
flows
|
|||||||||||||||||||||||||||||
|
|
in the
|
after
|
after
|
after
|
after
|
|||||||||||||||||||||||||||||
|
Main
|
Company’s
|
proportionate
|
service of
|
proportionate
|
service of
|
|||||||||||||||||||||||||||||
|
projects in
|
financial
|
consol-
|
project
|
consol-
|
project
|
|||||||||||||||||||||||||||||
|
operation
|
statements
|
Revenues
|
idation
|
FFO
|
debt
|
Revenues
|
idation
|
FFO
|
debt
|
|||||||||||||||||||||||||
|
Rotem26
|
Consolidated
|
277
|
73
|
22
|
22
|
229
|
31
|
(9
|
)
|
(9
|
)
|
|||||||||||||||||||||||
|
Hadera
|
Consolidated
|
82
|
16
|
6
|
(4
|
)
|
68
|
1
|
(22
|
)
|
(28
|
)
|
||||||||||||||||||||||
|
Zomet27
|
Consolidated
|
4
|
2
|
–
|
–
|
–
|
–
|
–
|
–
|
|||||||||||||||||||||||||
|
Gat28 29
|
Consolidated
|
46
|
10
|
(1
|
)
|
(1
|
)
|
–
|
–
|
–
|
–
|
|||||||||||||||||||||||
|
Total operating projects in Israel
|
409
|
101
|
27
|
17
|
297
|
32
|
(31
|
)
|
(37
|
)
|
||||||||||||||||||||||||
|
Fairview
|
Associated (25%)
|
58
|
34
|
38
|
9
|
61
|
17
|
11
|
–
|
|||||||||||||||||||||||||
|
Towantic
|
Associated (26%)
|
69
|
32
|
21
|
(2
|
)
|
78
|
14
|
5
|
(9
|
)
|
|||||||||||||||||||||||
|
Maryland30
|
Associated (25%)
|
39
|
11
|
(8
|
)
|
(5
|
)
|
48
|
11
|
10
|
1
|
|||||||||||||||||||||||
|
Shore31
|
Associated (37.53%)
|
28
|
1
|
(1
|
)
|
(1
|
)
|
65
|
14
|
(1
|
)
|
(1
|
)
|
|||||||||||||||||||||
|
Valley
|
Associated (50%)
|
57
|
9
|
–
|
(11
|
)
|
131
|
16
|
13
|
(1
|
)
|
|||||||||||||||||||||||
|
Total energy transition in the U.S.32
|
251
|
87
|
50
|
(10
|
)
|
383
|
72
|
38
|
(10
|
)
|
||||||||||||||||||||||||
|
Keenan
|
Consolidated
|
19
|
11
|
13
|
–
|
25
|
18
|
16
|
5
|
|||||||||||||||||||||||||
|
Mountain Wind28
|
Consolidated
|
17
|
9
|
15
|
11
|
–
|
–
|
–
|
–
|
|||||||||||||||||||||||||
|
Total renewable energy in the U.S.
|
36
|
20
|
28
|
11
|
25
|
18
|
16
|
5
|
||||||||||||||||||||||||||
| 5. |
Results of operations for the three‑month period ended June 30, 2023 (in millions of NIS) (Cont.)
|
|
|
C. |
Analysis of the change in adjusted EBITDA – segment in Israel
|
|
|
1. |
Energy margin – the increase in energy margin in the period of the report compared with the corresponding period last year stems mainly from an increase, in the amount of about NIS 15 million, as a result of an increase in the
generation tariff, and from an increase in sales of energy, in the amount of about NIS 4 million, due to an increase in customer consumption. In addition, there was a decrease in the natural gas prices, in the amount of about NIS 14 million,
due to entry of the Energean agreement into effect, starting from the end of the first quarter of 2023, while on the other hand there was an increase in the prices of natural gas due to the strengthening of the dollar against the shekel, in
the amount of about NIS 7 million.
|
|
|
2. |
Availability due to maintenance work – during the corresponding quarter last year, the Rotem and Hadera power plants were shut down for different periods of time for purposes of maintenance work, which had a negative impact on their
results in the second quarter of 2022. For additional details – see Section 4C(3) to the Report of the Board of Directors for 2022.
|
| 5. |
Results of operations for the three‑month period ended June 30, 2023 (in millions of NIS) (Cont.)
|
|
|
D. |
Analysis of the change in adjusted EBITDA after proportionate consolidation – in the activity segments in the U.S.
|
|
|
1. |
Energy margin and capacity payments – as stated in Section 3.3H above, in the second quarter of 2023 there was a decrease in the energy margins, compared with the corresponding quarter last year, and correspondingly there was a
decline, in the amount of about NIS 58 million, in the electricity margins of the CPV Group (on the assumption of full capacity). In addition, in this quarter there was a decrease, in the amount of about NIS 8 million, in the availability
payments compared with the corresponding quarter last year (for details regarding the availability tariffs – see Section 3.3H above).
|
|
|
2. |
Energy hedges – the said decrease in the electricity margins in some of the power plants was offset, in the amount of about NIS 60 million, compared with the corresponding quarter last year, due to hedges
made during 2021 that were realized at a loss in the corresponding quarter last year. For details regarding energy hedges for the balance of 2023 and 2024 – see Section 4E above.
|
|
|
3. |
Availability – most of the increase stems from planned maintenance work at the Towantic power plant that was performed in the corresponding quarter last year.
|
| 5. |
Results of operations for the three‑month period ended June 30, 2023 (in millions of NIS) (Cont.)
|
|
|
D. |
Analysis of the change in adjusted EBITDA after proportionate consolidation – in the activity segments in the U.S.. (Cont.)
|
| 5. |
Results of operations for the three‑month period ended June 30, 2023 (in millions of NIS) (Cont.)
|
|
|
E. |
Adjustments to EBITDA and net loss for the second quarter
|
|
For the three months ended
|
|||||||||
|
Section
|
June 30
|
Board’s explanations
|
|||||||
|
2023
|
2022
|
||||||||
|
Change in the fair value of derivative financial instruments (which are presented as part of the Company’s share of income of associated companies in the U.S.)
|
(7
|
)
|
33
|
Represents the change in the fair value of derivative financial instruments that are used in programs for hedging electricity margins of the natural gas
segment in the U.S., as determined in Section D above.
|
|||||
|
Change in net expenses, not in the ordinary course of business and/or of a non‑recurring natures
|
11
|
1
|
In the period of the report and in the corresponding quarter last year, represents activities in respect of a test run and the Company’s preparations
for the commercial operation of the Zomet Power Plant, which took place in June 2023.
|
||||||
|
Total adjustments to EBITDA
|
4
|
34
|
|||||||
|
Income from exchange rate differences in respect of intercompany loans (*)
|
–
|
(61
|
)
|
For details – see Section 5A(3) above.
|
|||||
|
Tax impact in respect of the adjustments
|
(1
|
)
|
10
|
||||||
|
Total adjustments to the loss for the period
|
3
|
(17
|
)
|
||||||
| (*) |
For purposes of improving the comparability between the periods with respect to the adjusted net income data, the Company made a reconciliation to the net income in the six months and three months ended on June 30, 2022 in respect of income
that is not cash flow income from exchange rate differences from revaluation of intercompany loans that occurred from October 1, 2022 that were classified as part of the Group’s net investment in the U.S. and exchange rate differences in
respect thereof are recorded, commencing from that date, to other comprehensive income as part of the translation reserve.
|
| 5. |
Results of operations for the three‑month period ended June 30, 2023 (in millions of NIS) (Cont.)
|
|
|
F. |
Detail generation (in millions of kilowatt/hours)
|
|
For the three months ended June 30, 2023
|
For the three months ended June 30, 2022
|
|||||||||||||||||||||||||||||||||||
|
Potential
|
Net
|
Actual
|
Actual
|
Potential
|
Net
|
Actual
|
Actual
|
|||||||||||||||||||||||||||||
|
electricity
|
electricity
|
generation
|
availability
|
electricity
|
electricity
|
generation
|
availability
|
|||||||||||||||||||||||||||||
|
Capacity
|
generation
|
generation
|
percentage
|
percentage
|
generation
|
generation
|
percentage
|
percentage
|
||||||||||||||||||||||||||||
|
(MW)
|
(GWh)(1)
|
(GWh)(2)
|
(%)(3)
|
(%)
|
(GWh)
|
(GWh)
|
(%)
|
(%)
|
||||||||||||||||||||||||||||
|
Rotem
|
466
|
936
|
838
|
89.6
|
%
|
96.1
|
%
|
930
|
652
|
70.1
|
%
|
69.8
|
%
|
|||||||||||||||||||||||
|
Hadera
|
144
|
251
|
232
|
92.8
|
%
|
94.0
|
%
|
251
|
145
|
57.9
|
%
|
55.4
|
%
|
|||||||||||||||||||||||
|
Gat
|
75
|
156
|
154
|
98.6
|
%
|
100.0
|
%
|
|||||||||||||||||||||||||||||
|
Zomet
|
396
|
67
|
8
|
11.9
|
%
|
94.0
|
%
|
|||||||||||||||||||||||||||||
|
For the three months ended June 30, 2023
|
For the three months ended June 30, 2022
|
|||||||||||||||||||||||||||||||||||
|
Potential
|
Net
|
Actual
|
Actual
|
Potential
|
Net
|
Actual
|
Actual
|
|||||||||||||||||||||||||||||
|
electricity
|
electricity
|
generation
|
availability
|
electricity
|
electricity
|
generation
|
availability
|
|||||||||||||||||||||||||||||
|
Capacity
|
generation
|
generation
|
percentage
|
percentage
|
generation
|
generation
|
percentage
|
percentage
|
||||||||||||||||||||||||||||
|
(MW)
|
(GWh)(1)
|
(GWh)(2)
|
(%)(3)
|
(%)
|
(GWh)
|
(GWh)
|
(%)
|
(%)
|
||||||||||||||||||||||||||||
|
Energy transition projects (natural gas)
|
||||||||||||||||||||||||||||||||||||
|
Fairview
|
1,050
|
2,157
|
1,979
|
90.0
|
%
|
91.5
|
%
|
1,993
|
1,730
|
78.7
|
%
|
81.8
|
%
|
|||||||||||||||||||||||
|
Towantic
|
805
|
1,592
|
1,438
|
81.3
|
%
|
89.7
|
%
|
993
|
894
|
50.8
|
%
|
56.3
|
%
|
|||||||||||||||||||||||
|
Maryland
|
745
|
1,373
|
975
|
61.2
|
%
|
83.6
|
%
|
1,373
|
989
|
61.5
|
%
|
83.3
|
%
|
|||||||||||||||||||||||
|
Shore
|
725
|
922
|
645
|
41.3
|
%
|
58.4
|
%
|
1,362
|
960
|
61.4
|
%
|
85.9
|
%
|
|||||||||||||||||||||||
|
Valley
|
720
|
1,412
|
868
|
58.4
|
%
|
63.3
|
%
|
1,330
|
1,048
|
70.4
|
%
|
78.8
|
%
|
|||||||||||||||||||||||
|
Renewable energy projects
|
||||||||||||||||||||||||||||||||||||
|
Keenan II
|
152
|
332
|
62
|
18.7
|
%
|
95.9
|
%
|
332
|
74
|
22.5
|
%
|
92.0
|
%
|
|||||||||||||||||||||||
|
Mountain
Wind
|
82
|
121
|
48
|
28.6
|
%
|
89.1
|
%
|
–
|
–
|
–
|
–
|
|||||||||||||||||||||||||
| (*) |
Regarding the planned maintenance – see Sections 5C(2) and 5D(3) and Section 8.8 of the Company’s Periodic Report for 2022.
|
| (1) |
The potential generation is the gross generation capability during the period after planned maintenance and less the electricity used for the power plant’s internal purposes.
|
| (2) |
The net generation of electricity is the gross generation during the period less the electricity used for the power plant’s internal purposes.
|
| (3) |
The actual generation percentage is the quantity of the net electricity generated in the facilities compared with the maximum quantity that can be generated in the period.
|
|
|
1. |
Main details with reference to construction projects in Israel (held at 100% ownership by OPC Israel, which is 80% held by the Company)33:
|
|
Total
|
||||||||||||||||
|
construction
|
||||||||||||||||
|
Power
|
Date/
|
Total
|
cost
|
|||||||||||||
|
plants/
|
expectation
|
expected
|
as at
|
|||||||||||||
|
facilities
|
of the start
|
construction
|
June 30,
|
|||||||||||||
|
for
|
of the
|
Main
|
cost
|
2023
|
||||||||||||
|
generation
|
Capacity
|
commercial
|
customer/
|
(NIS
|
(NIS
|
|||||||||||
|
of energy
|
Status
|
(megawatts)
|
Location
|
Technology
|
operation
|
consumer
|
millions)
|
millions)
|
||||||||
|
OPC Sorek 2 Ltd. (“Sorek 2”)
|
Under construction
|
≈ 87
|
On the premises of the Sorek B seawater desalination facility
|
Powered by natural gas, cogeneration
|
The first half of 202434
|
Yard consumers and the System Operator
|
≈ 200
|
≈ 120
|
| 33 |
That stated in connection with projects that have not yet reached operation (including generation facilities on the premises of the consumers)
including with reference to the expected operation date, the technologies and/or the anticipated cost of the investment, is “forward‑looking” information, as it is defined in the Securities Law, which is based on, among other things, the
Company’s estimates and assumptions as at the approval date of the report and regarding which there is no certainty it will be realized (in whole or in part). Completion of the said projects (or any one of them) may not occur or may occur in
a manner different than that stated above, among other things due to dependency on various factors, including those that are not under the Company’s control, including assurance of connection to the network and output of electricity from the
project sites and/or connection to the infrastructures (including gas infrastructures), receipt of permits, completion of planning processes and licensing, completion of construction work, final costs in respect of development, construction,
equipment and land, the proper functioning of the equipment and/or the terms of undertakings with main suppliers (including lenders), and there is no certainty they will be fulfilled, the manner of their fulfillment, the extent of their
impact or what their final terms will be. Ultimately technical, operational or other delays and/or breakdowns and/or an increase in expenses could be caused, this being as a result of, among other things, factors as stated above or as a
result of occurrence of one or more of the risk factors the Company is exposed to, including construction risks (including force majeure events), regulatory, licensing or planning risks,
macro‑economic changes, delays and increased costs due relating to the supply chain, transport and changes in raw‑material prices and etc. For additional details regarding risk factors – see Section 19 of Part A of the Periodic Report for
2022. It is further clarified that delays in completion of the above‑mentioned projects beyond the date originally planned for this could impact the ability of the Company and the Group companies to comply with their obligations to third
parties (including by force of guarantees provided), including authorities, conditions of permits, lenders, yard consumers, customers and others, in connection with the projects.
|
| 34 |
It is noted that a delay in the commercial operation beyond the projected contractual date, as detailed in Section 7.15.1.2 of Part A of the Periodic Report for 2022, which is not considered a justified delay as
defined in the project agreements, could trigger payment of monthly compensation at a limited graduated rate (taking into account the length of the delay, where a delay after full utilization of the compensation ceiling could give rise to a
cancellation right). It is clarified that in the initial delay period, the amount of the compensation for an unjustified delay is not material.
|
| 6. |
Initiation and Construction Projects (Cont.)
|
|
|
1. |
Main details with reference to construction projects in Israel (held at 100% ownership by OPC Israel, which is 80% held by the Company)31: (Cont.)
|
|
Total
|
||||||||||||||||
|
construction
|
||||||||||||||||
|
Power
|
Date/
|
Total
|
cost
|
|||||||||||||
|
plants/
|
expectation
|
expected
|
as at
|
|||||||||||||
|
facilities
|
of the start
|
construction
|
June 30,
|
|||||||||||||
|
for
|
of the
|
Main
|
cost
|
2023
|
||||||||||||
|
generation
|
Capacity
|
commercial
|
customer/
|
(NIS
|
(NIS
|
|||||||||||
|
of energy
|
Status
|
(megawatts)
|
Location
|
Technology
|
operation
|
consumer
|
millions)
|
millions)
|
||||||||
|
Facilities for generation of energy located on the consumer’s premises
|
In various stages of development / construction
|
Projects in operation: about 2, projects under construction: about 40, projects in advanced development: about 67. The Company intends to act to expand projects with a cumulative scope of at
least
12035
|
On the premises of consumers throughout Israel
|
Natural gas and renewable energy (solar, storage)
|
Regarding projects under construction, gradually starting from the second half of 2023 and up to 2024
|
Yard consumers and the System Operator.
|
An average of about NIS 4 per megawatt
|
≈ 138
|
| 6. |
Initiation and Construction Projects (Cont.)
|
| 2. |
Main details regarding construction projects in the area of renewable energy using solar technology in the U.S. (held 100% by the CPV Group)36
|
| 6. |
Initiation and Construction Projects (Cont.)
|
|
|
2. |
Main details regarding construction projects in the area of renewable energy using solar technology in the U.S. (held 100% by the CPV Group)36
|
|
Total
|
Total
|
|||||||||||||||||
|
expected
|
construction
|
|||||||||||||||||
|
construction
|
cost
|
|||||||||||||||||
|
Regulated
|
cost net37
|
as at
|
||||||||||||||||
|
Expected
|
market
|
for 100%
|
Tax
|
June 30,
|
||||||||||||||
|
commercial
|
after
|
of the project
|
equity
|
2023
|
||||||||||||||
|
Capacity
|
operation
|
Commercial
|
the PPA
|
(NIS
|
(NIS
|
(NIS
|
Expectation for a full calendar year
|
|||||||||||
|
Project
|
(megawatts)
|
Location
|
date
|
structure
|
period
|
billions)
|
millions)
|
billions)
|
in the period of the PPA agreements
|
|
Cash flows
|
||||||||||||||||||||||
|
after tax
|
||||||||||||||||||||||
|
Revenues
|
EBITDA
|
partner
|
||||||||||||||||||||
|
(NIS
|
(NIS
|
(NIS
|
||||||||||||||||||||
|
millions)
|
millions)
|
millions)
|
|
CPV Maple Hill Solar LLC (“Maple Hill”).
|
126 MWdc
|
Pennsyl-vania
|
Second half of 202338
|
Long-term PPA.
Green certificates39
|
PJM market PA + MAAC SRECs
|
≈ 0.67
(≈ $0.18 billion)
|
≈ 290
(≈ $78 million)
|
≈ 0.52
(≈ $0.14 billion)38
|
≈ 48
(≈ $13 million)
|
≈ 37
(≈ $10 million)
|
≈ 30
(≈ $8 million)
|
| 6. |
Initiation and Construction Projects (Cont.)
|
|
|
2. |
Main details regarding construction projects in the area of renewable energy using solar technology in the U.S. (held 100% by the CPV Group)36
|
|
Total
|
Total
|
|||||||||||||||||
|
expected
|
construction
|
|||||||||||||||||
|
construction
|
cost
|
|||||||||||||||||
|
Regulated
|
cost net37
|
as at
|
||||||||||||||||
|
Expected
|
market
|
for 100%
|
Tax
|
June 30,
|
||||||||||||||
|
commercial
|
after
|
of the project
|
equity
|
2023
|
||||||||||||||
|
Capacity
|
operation
|
Commercial
|
the PPA
|
(NIS
|
(NIS
|
(NIS
|
Expectation for a full calendar year
|
|||||||||||
|
Project
|
(megawatts)
|
Location
|
date
|
structure
|
period
|
billions)
|
millions)
|
billions)
|
in the period of the PPA agreements
|
|
Cash flows
|
||||||||||||||||||||||
|
after tax
|
||||||||||||||||||||||
|
Revenues
|
EBITDA
|
partner
|
||||||||||||||||||||
|
(NIS
|
(NIS
|
(NIS
|
||||||||||||||||||||
|
millions)
|
millions)
|
millions)
|
|
CPV Stagecoach Solar, LLC (“Stagecoach”).
|
100 MWdc
|
Georgia
|
First half of 2024
|
Long-term PPA (including
green certificates)41
|
SERC
|
≈ 0.40
(≈ $0.11 billion)
|
≈ 195
(≈ $53 million)42
|
≈ 0.21
(≈ $0.06 billion)
|
≈ 24
(≈ $7 million)
|
≈ 17
(≈ $5 million)
|
≈ 17
(≈ $5 million)
|
| 42 |
In the estimation of the CPV Group, the project is expected to sign an agreement with a tax partner in a PTC format, where the amount of about $43 million out of the amount stated is expected to be received on the commercial operation
date of the project and the balance over a period of 10 years. In projects that are entitled to tax benefits of the PTC type, the Company’s estimate regarding the scope of the investment of the tax partner is based on the provisions of the
IRA law and customary calculations in the agreements with the tax partner, a tax benefit for every KW/hr. of generation, and does not depend on the expected cost of the investment (and does not depend on the initiation fees and
reimbursement of pre‑construction development expenses). The estimate of the CPV Group regarding the expectation of contracting with a tax partner, including the PTC format for the undertaking, is
“forward‑looking” information within the meaning thereof in the Securities Law, which is based on data, estimates, assessments and plans of the Company proximate to the publication date of the report. The estimates might not materialize
or might change due to a range of circumstances, including changes in the provisions of the law or regulations and locating a tax partner that will wish to contract with the project, which are not dependent on the Company and there is no
certainty regarding their realization.
|
|
|
2. |
Main details regarding construction projects in the area of renewable energy using solar technology in the U.S. (held 100% by the CPV Group)36
|
|
Total
|
||||||||||||||||||
|
expected
|
Amount
|
|||||||||||||||||
|
construction
|
of the cost
|
|||||||||||||||||
|
cost net37
|
of the
|
|||||||||||||||||
|
Regulated
|
for 100%
|
investment
|
||||||||||||||||
|
Expected
|
market
|
of the
|
Tax
|
June 30,
|
||||||||||||||
|
commercial
|
after
|
project
|
equity
|
2023
|
||||||||||||||
|
Capacity
|
operation
|
Commercial
|
the PPA
|
(NIS
|
(NIS
|
(NIS
|
Expectation for a full calendar year
|
|||||||||||
|
Project
|
(megawatts)
|
Location
|
date
|
structure
|
period
|
billions)
|
millions)
|
billions)
|
in the period of the PPA agreements
|
|
Cash flows
|
||||||||||||||||||||||
|
after tax
|
||||||||||||||||||||||
|
Revenues
|
EBITDA
|
partner
|
||||||||||||||||||||
|
(NIS
|
(NIS
|
(NIS
|
||||||||||||||||||||
|
millions)
|
millions)
|
millions)
|
||||||||||||||||||||
|
CPV Backbone Solar, LLC (“Backbone”).
|
170 MWdc
|
Maryland
|
Second half of 2025
|
Long-term PPA43 (including green certificates)
|
PJM + MD SRECs
|
≈ 1.04
(≈ $0.28 billion)
|
≈ 460 million
(≈ 125 million)44
|
≈ 0.16
(≈ $0.05 billion)
|
≈ 66
(≈ $18 million)
|
≈ 45
(≈ $13 million)
|
≈ 35
(≈ $10 million)
|
| 6. |
Initiation and Construction Projects (Cont.)
|
|
Technology
|
Advanced46
|
Early stage
|
Total*
|
|||||||||
|
Solar47
|
1,600
|
1,050
|
2,650
|
|||||||||
|
Wind (1)
|
100
|
450
|
550
|
|||||||||
|
Total renewable energy
|
1,700
|
1,500
|
3,200
|
|||||||||
|
Carbon capture projects (natural gas
|
||||||||||||
|
with reduced emissions) (2)
|
1,300
|
2,600
|
3,900
|
|||||||||
|
Natural gas
|
650
|
–
|
650
|
|||||||||
|
|
* |
It is noted that out of the total of the development projects, as stated above, a scope of about 1,500 megawatts (of which about 950 megawatts is renewable energy) and about 2,700 megawatts (of which about 700 megawatts is renewable energy)
are in the PJM market in an advanced stage and in an initial stage, respectively.
|
|
|
(1) |
For additional details regarding the Rogue’s Wind project, with a capacity of 114 megawatts, in Pennsylvania, which signed a long‑term PPA agreement, which is in advanced development and the commencement date of its construction is
expected to be in the first half of 2024 – see Section 6A(3) of the Report of the Board of Directors for 2022 and Section 8.14.7 of Part A of the report for 2022. In the estimation of the CPV Group, the expected net cost of the investment in
the project is estimated at about NIS 1.1 billion (about $0.3 billion) and net of the investment of the tax partner about NIS 0.55 billion (about $0.15 billion). The EBITDA for a full calendar year in the period of the PPA agreement is
estimated at about NIS 48 million (about $13 million)48.
|
|
|
(2) |
For additional details regarding development of two power plants with reduced emissions in natural gas that are based on use of advanced technologies for carbon capture – see Section 6A(6) of the Report of the Board of Directors for
2022.
|
|
Category
|
6/30/2023
|
12/31/2022
|
Board’s Explanations
|
||||||
|
Current Assets
|
|||||||||
|
Cash and cash equivalents
|
818
|
849
|
For additional information – see the Company’s condensed consolidated statements of cash flows in the interim financial statements and Part 8 below.
|
||||||
|
Short-term deposits
|
–
|
125
|
The decrease stems from release of short-term deposits.
|
||||||
|
Short-term deposits and restricted cash
|
60
|
36
|
The increase derives mainly from provision of collaterals in favor of projects under construction in the U.S.
|
||||||
|
Trade receivables and accrued income
|
277
|
260
|
Most of the increase stems from an increase in accrued income in Israel, in the amount of about NIS 26 million, mainly as a result of the consolidation of Gat power
plant for the first time from March 30, 2023 (for details – see Note 6A(1) to the Interim Statements).
|
||||||
|
Receivables and debit balances
|
160
|
190
|
Most of the decrease stems from a decrease, in the amount of about NIS 70 million, in the balance of other receivables and debit balances in the U.S., mainly as a result of release of
collaterals in connection with transactions hedging electricity margins in Valley, offset by an increase, in the amount of about NIS 12 million, in the balance of VAT institutions, and an increase, in the amount of about NIS 18 million, in
respect of the balance of the debt of Energean (for additional details – see Note 8A(3) to the Interim Statements).
|
||||||
|
Inventory
|
9
|
7
|
|||||||
|
Short-term derivative financial instruments
|
14
|
10
|
|||||||
|
Total current assets
|
1,338
|
1,477
|
|||||||
| 7. |
Financial Position as at June 30, 2023 (in millions of NIS) (Cont.)
|
|
Category
|
6/30/2023
|
12/31/2022
|
Board’s Explanations
|
||||||
|
Non-Current Assets
|
|||||||||
|
Long-term deposits and restricted cash
|
58
|
53
|
|||||||
|
Long-term prepaid expenses and other receivable
|
300
|
179
|
Most of the increase stems from a loan granted to an associated company in the U.S., in the amount of about NIS 87 million, as detailed in Note 11 to the Interim Statements, and an increase in
the investment in infrastructures of Zomet, in the amount of about NIS 19 million.
|
||||||
|
Investments in associated companies
|
2,496
|
2,296
|
The increase stems mainly from equity earnings of the CPV Group and from an increase in the shekel/dollar exchange rate, in the amount of about NIS 118 million, offset by other comprehensive
loss, in the amount of about NIS 16 million. For additional details regarding investments in associated companies – see Sections 4D and 5D above.
|
||||||
|
Deferred tax assets
|
25
|
22
|
|||||||
|
Long-term derivative financial instruments
|
63
|
57
|
|||||||
|
Property, plant and equipment
|
6,135
|
4,324
|
Most of the increase, in the amounts of about NIS 870 million and about NIS 451 million, stems from the initial consolidation of the Gat power plant (for additional details – see Note 6A(1) to
the Interim Statements) and the Mountain Wind project (see Note 6B to the Interim Statements), respectively, an increase deriving from investments in Israel and the U.S. (mainly in construction and development projects), in the amount of about
NIS 230 million and about NIS 264 million, respectively, and an increase of about NIS 63 million, in property, plant and equipment in the U.S. due to an increase in the shekel/dollar exchange rate.
This increase was partly offset by depreciation expenses on property, plant and equipment.
|
||||||
|
Right-of use assets
|
488
|
347
|
The increase derives mainly from lease of land in the U.S. (the Backbone project).
|
||||||
|
Intangible assets
|
1,067
|
777
|
Most of the increase derives from recognition of goodwill, in the amounts of about NIS 85 million and about NIS 75 million, in respect of acquisition of the Gat power plant and the Mountain
Wind project, respectively, recognition of intangible assets in respect of agreements for sale of electricity in the Mountain Wind project, in the amount of about NIS 93 million, and an increase due to the increase in the shekel/dollar exchange
rate.
|
||||||
|
Total non-current assets
|
10,632
|
8,055
|
|||||||
|
Total assets
|
11,970
|
9,532
|
|||||||
| 7. |
Financial Position as at June 30, 2023 (in millions of NIS) (Cont.)
|
|
Category
|
6/30/2023
|
12/31/2022
|
Board’s Explanations
|
||||||
|
Current Liabilities
|
|||||||||
|
Current maturities of loans from banks and financial institutions
|
183
|
92
|
Most of the increase stems from update of the current maturities of the project credit in Israel and the U.S. based on the repayment schedules, in the amounts of about
NIS 93 million and about NIS 43 million, respectively.
On the other hand, there was a decrease stemming from repayment of project credit in Israel and the U.S. based on the repayment schedules, in the amount of about NIS 21
million and about NIS 25 million, respectively.
|
||||||
|
Current maturities of loans from holders of non-controlling interests
|
33
|
13
|
Most of the increase stems from update of the current maturities of the loans based on the Company’s expectation regarding the repayment schedule of the debt from holders
of non‑controlling interests in Rotem.
|
||||||
|
Current maturities of debentures
|
113
|
33
|
The increase stems from update of the current maturities of the debentures based on the repayment schedules.
|
||||||
|
Trade payables
|
377
|
335
|
Most of the increase is from investments in projects under construction in the U.S.
|
||||||
|
Payables and other credit balances
|
424
|
110
|
Most of the increase derives from deferred consideration in respect of acquisition of the Gat power plant, as detailed in Note 6A(1) to the Interim Statements, in the amount of about NIS 291
million, and reclassification of current maturities, in the amount of about NIS 20 million, in respect of a liability relating to a profit‑sharing plan for employees of the CPV Group.
|
||||||
|
Short-term derivative financial instruments
|
3
|
3
|
|||||||
|
Current maturities of lease liabilities
|
62
|
61
|
|||||||
|
Current tax liabilities
|
1
|
2
|
|||||||
|
Total current liabilities
|
1,196
|
649
|
|||||||
| 7. |
Financial Position as at June 30, 2023 (in millions of NIS) (Cont.)
|
|
Category
|
6/30/2023
|
12/31/2022
|
Board’s Explanations
|
||||||
|
Non-Current Liabilities
|
|||||||||
|
Long-term loans from banks and financial institutions
|
2,555
|
1,724
|
Most of the increase stems from long-term loans, in the amounts of about NIS 450 million and about NIS 270 million, for financing acquisition of the Gat power plant (for
additional details – see Notes 6A(1) and 7A(1) to the Interim Statements) and for financing acquisition of the Mountain Wind project (for additional details – see Notes 6B and 7A(2) to the Interim Statements), respectively, and withdrawals, in
the amount of about NIS 197 million, and accrual of interest on the principal, in the amount of about NIS 32 million, in the framework thereof.
The increase was partly offset by a decrease, in the amounts of about NIS 93 million and about NIS 43 million, as a result of update of the current maturities of the
project credit in Israel and in the U.S., respectively.
|
||||||
|
Long-term loans from holders of non-controlling interests
|
400
|
424
|
Most of the decrease stems from a decrease, in the amount of about NIS 94 million, in loans from the holders of non‑controlling interests in Rotem, this being as a result
of repayment and update of the current maturities of the loans. This decrease was partly offset by an increase deriving from an increase in the balance of the long‑term loans from the holders of non‑controlling interests in the CPV Group, where
an increase of about NIS 56 million is in respect of additional loans provided to the Group and accrual of interest to the principal in the period of the report, and an increase of about NIS 15 million due to an increase of the shekel/dollar
exchange rate.
|
||||||
|
Debentures
|
1,735
|
1,807
|
The decrease stems from update of the current maturities of the debentures (Series B and Series C), in the amount of about NIS 95 million.
On the other hand, there was an increase deriving from linkage differences in respect of the debentures (Series B), in the amount of about NIS 24 million.
|
||||||
|
Long-term lease liabilities
|
209
|
69
|
Most of the increase stems from lease of land in the Backbone project, in the amount of about NIS 122 million (against a right‑of‑use asset), and a lease agreement for offices in the U.S., in
the amount of about NIS 15 million, recognized against a right‑of‑use asset.
|
||||||
|
Other long-term liabilities
|
146
|
146
|
|||||||
|
Liabilities for deferred taxes
|
479
|
347
|
Most of the increase, in the amount of about NIS 110 million, stems from the initial consolidation of the Gat power plant (for additional details – see Note 6A(1) to the Interim Statements).
|
||||||
|
Total non-current liabilities
|
5,524
|
4,517
|
|||||||
|
Total liabilities
|
6,720
|
5,166
|
|||||||
|
For the
|
|||||||||
|
Six Months Ended
|
|||||||||
|
Category
|
6/30/2023
|
6/30/2022
|
Board’s Explanations
|
||||||
|
Cash flows provided by operating activities
|
160
|
96
|
Most of the increase in the cash flows provided by operating activities stems from an increase in cash‑basis income, in the amount of about NIS 39 million, and an increase
in the Group’s working capital, in the amount of about NIS 26 million.
|
||||||
|
Cash flows used in investing activities
|
(1,316
|
)
|
(537
|
)
|
During the period of the report, the Group acquired the Gat power plant, for a consideration of about NIS 268 million (for additional details – see Note 6A(1) of the
Interim Statements), and the Mountain Wind project, for a consideration of about NIS 625 million (for additional details – see Note 6 of the Interim Statements). In addition, the Company provided a loan to an associated company in the U.S.,
in the amount of about NIS 87 million. On the other hand, cash was provided to the Group, in the amounts of about NIS 125 million and about NIS 73 million, in respect of release of short‑term deposits and in respect of release of collaterals
relating to hedging electricity margins in the CPV Group, respectively.
|
||||
|
Cash flows provided by financing activities
|
1,089
|
194
|
Most of the increase in the cash flows provided by financing activities stems from a receipt in the period of the report, in the amount of about NIS 452 million, in respect of a swap of shares
of transaction and investment with Veridis (for additional details – see Note 6A(2) of the Interim Statements), long‑term loans, in the amounts of about NIS 450 million and about NIS 270 million, for purposes of financing a transaction for
acquisition of the Gat power plant and a transaction for acquisition of the Mountain Wind project, respectively, and an increase, in the amount of about NIS 193 million, in investments and loans from holders of non‑controlling interests (in the
CPV Group and Veridis). On the other hand, in the period of the report the Group repaid a loan to the prior holders of the rights in the Gat power plant, in the amount of about NIS 303 million (for additional details – see Note 6A(1) of the
Interim Statements), there was an increase, in the amount of about NIS 66 million, in repayments of Rotem to the holders of non‑controlling interests, and in addition there was a decrease, in the amount of about NIS 56 million, in respect of
withdrawals from Zomet’s financing agreement framework.
|
||||||
| 8. |
Liquidity and sources of financing (in NIS millions)
|
|
For the
|
|||||||||
|
Three Months Ended
|
|||||||||
|
Category
|
6/30/2023
|
6/30/2022
|
Board’s Explanations
|
||||||
|
Cash flows provided by operating activities
|
57
|
5
|
Most of the increase in the cash flows provided by operating activities stems from an increase in income on a cash basis, in the amount of about NIS 59 million, offset by a
decrease in the Group’s working capital, in the amount of about NIS 7 million.
|
||||||
|
Cash flows used in investing activities
|
(1,053
|
)
|
(259
|
)
|
Most of the increase in the cash flows used in investing activities stems from acquisition of the Mountain Wind project in the second quarter of 2023, for a consideration of about NIS 625
million (for additional details – see Note 6B to the Interim Statements) and provision of a loan to an associated company in the U.S., in the amount of about NIS 87 million. In addition, during the second quarter of 2023, the investments in
property, plant and equipment in the U.S. increased by about NIS 87 million.
|
||||
|
Cash flows provided by financing activities
|
310
|
71
|
Most of the increase in the cash flows provided by financing activities stems from withdrawal of financing, in the amount of about NIS 270 million, for purposes of financing the transaction for
acquisition of the Mountain Wind project (for additional details – see Note 7A(2) to the Interim Statements).
|
||||||
| 9. |
Adjusted financial debt, net
|
|
|
A. |
Compositions of the adjusted financial debt, net
|
|
Method of
presentation
in the
Company’s
financial
statements
|
Cash and cash
|
|||||||||||||||||||||
|
equivalents
|
||||||||||||||||||||||
|
and deposits
|
||||||||||||||||||||||
|
Gross debt
|
(including
|
|||||||||||||||||||||
|
Debt
|
Weighted-
|
Final
|
restricted
|
|||||||||||||||||||
|
(including
|
average
|
repayment
|
cash used
|
|||||||||||||||||||
|
interest
|
interest
|
date of
|
for debt
|
Net
|
||||||||||||||||||
|
Name of project
|
payable)
|
rate
|
the loan
|
service) (1)
|
debt
|
|||||||||||||||||
|
Rotem
|
Consolidated
|
–
|
–
|
–
|
28
|
(28
|
)
|
|||||||||||||||
|
Hadera
|
Consolidated
|
662
|
4.9
|
%
|
2037
|
62
|
600
|
|||||||||||||||
|
Zomet
|
Consolidated
|
1,058
|
7.2
|
%
|
2042
|
50
|
1,008
|
|||||||||||||||
|
Gat
|
Consolidated
|
446
|
6.9
|
%
|
2039
|
11
|
435
|
|||||||||||||||
|
Headquarters and others – Israel (2)
|
Consolidated
|
3
|
42
|
(39
|
)
|
|||||||||||||||||
|
Total Israel
|
2,169
|
6.4
|
%
|
193
|
1,976
|
|||||||||||||||||
|
Keenan
|
Consolidated
|
301
|
3.3
|
%
|
2030
|
4
|
297
|
|||||||||||||||
|
Mountain Wind
|
Consolidated
|
269
|
5.3
|
%
|
2028
|
15
|
254
|
|||||||||||||||
|
Total renewable energy
|
570
|
4.3
|
%
|
19
|
551
|
|||||||||||||||||
|
Fairview (Cash Sweep 100%)
|
Associate 25%
|
373
|
5.6
|
%
|
2025
|
6
|
367
|
|||||||||||||||
|
Towantic (Cash Sweep 100%)
|
Associate 26%
|
423
|
4.9
|
%
|
2025
|
8
|
415
|
|||||||||||||||
|
Maryland (3) (Cash Sweep 75%)
|
Associate 25%
|
312
|
7.0
|
%
|
2028
|
3
|
309
|
|||||||||||||||
|
Shore (3) (Cash Sweep 75%)
|
Associate 37.5%
|
637
|
6.8
|
%
|
2025
|
7
|
630
|
|||||||||||||||
|
Valley (4) (Cash Sweep 100%)
|
Associate 50%
|
841
|
8.9
|
%
|
2026
|
3
|
838
|
|||||||||||||||
|
Three Rivers
|
Associate 10%
|
303
|
5.2
|
%
|
2028
|
–
|
303
|
|||||||||||||||
|
Total energy transition50
|
2,889
|
6.8
|
%
|
27
|
2,862
|
|||||||||||||||||
|
Headquarters and others – U.S.
|
Consolidated
|
–
|
–
|
–
|
120
|
(120
|
)
|
|||||||||||||||
|
Total U.S.
|
3,459
|
166
|
3,293
|
|||||||||||||||||||
|
Total Energy headquarters (4)
|
1,861
|
2.5–2.75% (weighted-average
2.6%)51
|
537
|
1,324
|
||||||||||||||||||
|
Total
|
7,489
|
896
|
6,593
|
|||||||||||||||||||
| (1) |
Includes restricted cash (a debt service reserve in Hadera), in the amount of about NIS 51 million.
|
| (2) |
Includes mainly balances of cash and cash equivalents in OPC Israel Holdings and OPC Power Plants.
|
| (3) |
As part of the financial agreements, an historical debt‑service coverage ratio financial covenant of 1:1 during the last four quarters was determined for Shore and Maryland. As at the date of the financial statements, Maryland and Shore
are in compliance with the covenant (3.32 and 1.13, respectively).
|
| (4) |
For details regarding signing of an amendment and extension agreement with respect to the financing agreement of Valley on June 28, 2023 – see Note 11 to the Interim Statements.
|
| (5) |
Includes balances of debt and cash in the Company and cash in ICG Energy Inc. (available for use for all the Group’s needs).
|
| 9. |
Adjusted financial debt, net (Cont.)
|
|
Method of
presentation
in the
Company’s
financial
statements
|
Cash
|
||||||||||||
|
and cash
|
|||||||||||||
|
equivalents
|
|||||||||||||
|
and deposits
|
|||||||||||||
|
Debt
|
(including
|
||||||||||||
|
(including
|
restricted cash
|
||||||||||||
|
interest
|
used for
|
Net
|
|||||||||||
|
payable)
|
debt service)
|
debt
|
|||||||||||
|
Rotem
|
Consolidated
|
–
|
25
|
(25
|
)
|
||||||||
|
Hadera
|
Consolidated
|
670
|
58
|
612
|
|||||||||
|
Zomet
|
Consolidated
|
833
|
9
|
824
|
|||||||||
|
Headquarters and others in Israel
|
Consolidated
|
4
|
107
|
(103
|
)
|
||||||||
|
Total Israel
|
1,507
|
199
|
1,308
|
||||||||||
|
Keenan
|
Consolidated
|
310
|
3
|
307
|
|||||||||
|
Maple Hill
|
Consolidated
|
–
|
11
|
(11
|
)
|
||||||||
|
Total renewable energy
|
310
|
14
|
296
|
||||||||||
|
Fairview
|
Associate
|
442
|
1
|
441
|
|||||||||
|
Towantic
|
Associate
|
509
|
39
|
470
|
|||||||||
|
Maryland
|
Associate
|
300
|
6
|
294
|
|||||||||
|
Shore
|
Associate
|
607
|
16
|
591
|
|||||||||
|
Valley
|
Associate
|
895
|
2
|
893
|
|||||||||
|
Three Rivers
|
Associate
|
290
|
–
|
290
|
|||||||||
|
Total energy transition
|
3,043
|
64
|
2,979
|
||||||||||
|
Headquarters and others in the U.S.
|
Consolidated
|
–
|
226
|
(226
|
)
|
||||||||
|
Total U.S.
|
3,353
|
304
|
3,049
|
||||||||||
|
Total Energy headquarters
|
1,854
|
586
|
1,268
|
||||||||||
|
Total Company
|
6,714
|
1,089
|
5,625
|
||||||||||
|
|
A. |
Compositions of the adjusted financial debt, net (Cont.)
|
|
Method of
presentation
in the
Company’s
financial
statements
|
Cash
|
||||||||||||
|
and cash
|
|||||||||||||
|
equivalents
|
|||||||||||||
|
and deposits
|
|||||||||||||
|
Debt
|
(including
|
||||||||||||
|
(including
|
restricted cash
|
||||||||||||
|
interest
|
used for
|
Net
|
|||||||||||
|
payable)
|
debt service)
|
debt
|
|||||||||||
|
Rotem
|
Consolidated
|
–
|
19
|
(19
|
)
|
||||||||
|
Hadera
|
Consolidated
|
680
|
68
|
612
|
|||||||||
|
Zomet
|
Consolidated
|
781
|
68
|
713
|
|||||||||
|
Headquarters and others in Israel
|
Consolidated
|
4
|
107
|
(103
|
)
|
||||||||
|
Total Israel
|
1,465
|
262
|
1,203
|
||||||||||
|
Keenan
|
Consolidated
|
320
|
9
|
311
|
|||||||||
|
Maple Hill
|
Consolidated
|
–
|
9
|
(9
|
)
|
||||||||
|
Total renewable energy
|
320
|
18
|
302
|
||||||||||
|
Fairview
|
Associate
|
501
|
3
|
498
|
|||||||||
|
Towantic
|
Associate
|
539
|
8
|
531
|
|||||||||
|
Maryland
|
Associate
|
342
|
–
|
342
|
|||||||||
|
Shore
|
Associate
|
607
|
2
|
605
|
|||||||||
|
Valley
|
Associate
|
981
|
3
|
978
|
|||||||||
|
Three Rivers
|
Associate
|
285
|
1
|
284
|
|||||||||
|
Total energy transition
|
3,255
|
17
|
3,238
|
||||||||||
|
Headquarters and others in the U.S.
|
Consolidated
|
–
|
166
|
(166
|
)
|
||||||||
|
Total U.S.
|
3,575
|
201
|
3,374
|
||||||||||
|
Total Energy headquarters
|
Consolidated
|
1,845
|
110
|
1,735
|
|||||||||
|
Total Company
|
6,885
|
573
|
6,312
|
||||||||||
|
|
B. |
Interest and linkage bases
|
|
|
C. |
Financial covenants
|
| (*) |
Includes the amount of about NIS 51 million in respect of current payments and the amount of about NIS 540 million in respect of payments relating to construction projects.
|
| (**) |
In respect of translation of the net financial debt of the U.S. which is denominated in dollars into the Company’s functional currency.
|
| 10. |
Additional Events in the Company’s Areas of Activity in the Period of the Report and Thereafter
|
|
|
A. |
Win in a tender of Israel Lands Authority for construction of facilities for generation of electricity using renewable energy in Israel
|
| 53 |
That stated above regarding the characteristics and the capacity of the solar facilities and the storage capacity, the estimated cost of the projects, the feasibility for advancement of the project as a
single (combined) project and the resulting cost savings, the commencement date of the construction of the project/s, the regulation that will apply to the facilities, the Company’s activities in the renewable area, and obtaining of the
government’s consent include “forward‑looking” information, as it is defined in the Securities Law, 1968, which is based on the Company’s estimates and assumptions as at the date of the report, regarding which there is no certainty it will be
realized or the manner of its realization. As at the submission date of the report, construction of the facilities and advancement of the project/s depends on completion of the planning processes, construction, connection to the network
(grid), licensing, and regulatory conditions, approval of the plan (which is expected to include, among other things, examination of planning, environmental, security, planning of connection to the grid and transmission capability, including
examination of objections of various parties), contracting with relevant suppliers and assurance of financing for the construction, which as at the date of the report has not yet been completed and there is no certainty regarding the
completion thereof or the manner of the said completion (if completed). Ultimately, there could be administrative, planning, environmental, regulatory, infrastructure, operating delays / problems and/or cost increases – this being, among
other things, due to factors not under the Company’s control, or as a result of the occurrence of one or more of the risk factors to which the Company is exposed.
|
| 54 |
As at the approval date of the report, the authorization agreement for planning between Israel Lands Administration and the winner had not yet been received after being signed by Israel Lands Authority. If a new
plan is not approved in accordance with law within 3 years, Israel Lands Authority will be permitted to extend the development authorization for an additional year. An extension as stated involves additional consideration at the rate of 2.5%
of the amount of the winning bid, plus VAT, linked to the CPI.
|
| 10. |
Additional Events in the Company’s Areas of Activity (Cont.)
|
|
|
A. |
Win in a tender of Israel Lands Authority for construction of facilities for generation of electricity using renewable energy in Israel (Cont.)
|
|
|
B. |
Receipt of approval for commercial operation for the Zomet power plant – further to that stated in Section 7.1.2 of Part A of the Periodic Report for 2022, on June 22, 2023, the commercial operation of the Zomet power plant
commenced. Pursuant to the decision of the Electricity Authority published on June 21, 2023, the Electricity Authority decided to grant a permanent electricity generation license (“the License”) to the Zomet power plant using conventional
technology in an open cycle, with a capacity of about 396 megawatts. The License is for a period of 20 years (with a possibility for extension subject to the decision of the Electricity Authority). The total construction cost of Zomet
amounted about NIS 1.4 billion (without the amount of the assessment issued by Israel Lands Authority, in the amount of about NIS 200 million, as detailed in Note 11B to the financial statements for 2022). Pursuant to the generation license,
Zomet is entitled to receive an availability tariff from the System Operator, as at the date of the report of between 5.7 and 6.5 agurot per kilowatt hour56, subject to the number of ignitions. In addition, Zomet is entitled to an
electricity and gas tariff based on the generation and purchase cost and pursuant to the terms of the generation license and Regulation 914 of the Electricity Authority57.
|
| 10. |
Additional Events in the Company’s Areas of Activity (Cont.)
|
|
|
B. |
(Cont.)
|
|
|
C. |
Agreement for sale of electricity (PPA) with Bazan – further to that stated in Section 7.6.2 of the Company’s Periodic Report for 2022 regarding an agreement of Rotem for sale of electricity (PPA) to Bazan, in May 2023, new PPA
agreements were signed between Rotem and Bazan for supply of electricity to the consumption facilities of the Bazan Group (“the PPA Agreements” or “the Undertaking”) for a maximum scope of 125 megawatt/hour. Supply of the electricity is in
exchange for a payment equal to the TAOZ (load time) high‑voltage tariff determined from time to time by the Electricity Authority and less a discount on the generation component in accordance with the rates and arrangements detailed in the
agreement. The period of the agreement is ten years, commencing from July 2023 (upon conclusion of the present agreement as stated in above‑mentioned Periodic Report), subject to grounds for early termination59, along with
graduated exit points commencing after the passage of 5 years from the commencement date of the supply and pursuant to the provisions agreed to. As part of the Undertaking, additional provisions were included that are customary in PPA
agreements of this type, among other things, regarding consumption in excess of the maximum quantity, a commitment for availability of the power plant and supply of the electricity from different sources.
|
| 10. |
Additional Events in the Company’s Areas of Activity (Cont.)
|
|
|
D. |
Tender for sale of Eshkol as part of the reform of Israel Electric Company (IEC)62 – on May 22, 2023, the Group submitted, through a joint designated company held in equal shares by OPC Power Plants Ltd. (a subsidiary that
is held at the rate of 80% (indirectly) by the Company) and a company held by the Noy Fund (“OPC Eshkol”) a bid for acquisition of the Eshkol power plant, in the framework of a tender of Israel Electric Company. The tender includes acquisition
of a number of generation units that operate using conventional technology (natural gas) with a cumulative capacity of about 1,680 megawatts63, and the possibility to construct additional capacity of 600 megawatts to 850 megawatts64
based on regulations of the Electricity Authority, for the Eshkol site that is located in the Ashdod area. In order to secure the bid, the shareholders of OPC Eshkol (each one based on its proportionate share) provided a bank guarantee, in the
aggregate amount of NIS 100 million65.
|
| 62 |
For additional details – see Section 7.2.11.2 of Part A of the Periodic Report for 2022.
|
| 10. |
Additional Events in the Company’s Areas of Activity (Cont.)
|
|
|
D. |
(Cont.)
|
|
|
E. |
Hadera 2 – on May 28, 2023, a government decision was made not to approve National Infrastructure Plan 20B, relating to the Hadera 2 power plant, and to return it to the National Infrastructure Board for further deliberations. Further
to this, the Company submitted a petition for issuance to the Government of a conditional order to provide reasons for non‑approval of NIP 20B, which was summarily dismissed on July 19, 2023.
|
| 10. |
Additional Events in the Company’s Areas of Activity (Cont.)
|
|
|
F. |
Update of remuneration of Company directors – on May 11, 2023, the Company’s Board of Directors approved, after receiving the approval of the Remuneration Committee, update of the remuneration of presently serving directors, and as
they will serve in the Company from time to time, who are classified as experts such the updated annual remuneration to be paid to an expert director66 will be in accordance with the average of the amount provided and the maximum
annual amount for an external expert director, as detailed in the Second and Fourth Addendums to the Companies Regulations (Rules regarding Remuneration and Expenses to an External Director), 2000 (“the Remuneration Regulations”),
respectively, taking into account the Company’s grade; the updated participation remuneration that will be paid to an expert director will be in accordance with the average of the amount provided and the maximum amount for participation of an
expert external, director as detailed in the Third and Fourth Addendums to the Remuneration Regulations, respectively, taking into account the Company’s grade. Update of the remuneration, as stated, applies to the all the Company’s
directors, as they will be from time to time, including external directors, independent directors and directors that could be considered as being related to the Company’s controlling shareholder. It is clarified that update of the
remuneration with reference to all the Company’s presently serving directors, will be made subject their appointments and will apply from the commencement of the service of the external directors, that is July 1, 2023.
|
|
|
G. |
Appointment of independent director – on May 11, 2023, the Company’s Board of Directors approved the appointment of Harel Givon as an independent director of the Company – this being subject to approval of the General Meeting of the
Company’s shareholders of amendment of the Company’s Articles of Association, as detailed below, commencing from July 1, 2023.
|
|
|
H. |
Decisions of Extraordinary General Meeting of the Company’s shareholders – on June 19, 2023, the Extraordinary General Meeting of the Company’s shareholders decided:
|
|
|
1. |
To reappoint Mr. Yosef Tene as an external director of the Company for an additional period of service of three years, commencing from July 1, 2023, who will be entitled to the service conditions of the Company’s directors, including
directors’ fees in accordance with his classification as an expert director.
|
|
|
2. |
To appoint Ms. Shirly Mashkif as an external director of the Company for an initial period of service of three years, commencing from July 1, 2023, who will be entitled to the service conditions of the Company’s directors, in accordance
with her classification as an expert director.
|
|
|
3. |
To approve amendment of Regulation 89 of the Company’s Articles of Association, such that the number of directors the Company’s Board of Directors is permitted to appoint to the Board of Directors (the appointment of which will be up to
the next Annual General Meeting of the Company’s shareholders), will be in accordance with a limitation of 13 directors, as provided in Regulation 83 of the Articles of Association.
|
|
|
I. |
Conclusion of the service of an external director – on July 13, 2023, the service of Michal Merom Brickman as an external director of the Company was concluded.
|
| 10. |
Additional Events in the Company’s Areas of Activity (Cont.)
|
|
|
J. |
Proposed Clean Power Plan – in May 2023, the U.S. Environmental Protection Agency announced a proposal Clean Power Plan 2.0, the goal of which is to significantly limit emission of greenhouse gases from generation of energy through
fossils. Pursuant to the proposal, the regulation will require large electricity generation facilities operating using natural gas with an output coefficient of more than 50% to integrate burning of hydrogen with natural gas or,
alternatively, carbon capture technology – this being commencing from 2032 or 2035, respectively. As at the approval date of the report, the said proposal, is not final and will be subject to comments of the public and a thorough examination
process. In CPV’s estimation, the proposed plan could undergo significant changes before its potential application in 2024.
|
|
|
K. |
Receipt of approval for commercial operation of the Three Rivers power plant
|
| 11. |
Debentures (Series B) and (Series C)
|
| 12. |
Impacts of changes in the macro‑economic environment on the Group’s activities and its results
|
| 12. |
Impacts of changes in the macro‑economic environment on the Group’s activities and its results (Cont.)
|
| 13. |
Contributions policy
|
|
Amount of the
|
Relationship to the
|
|||||||
|
Recipient of the
|
Contribution
|
Recipient of the
|
||||||
|
Contribution
|
(NIS thousands)
|
Contribution
|
||||||
|
“Password for Every Student” Society
|
1,000
|
“Password for Every Student” also receives contributions from parties related indirectly to the Company’s controlling shareholder (including from the Israel Corporation
Group). The Company’s CEO is a representative of the project’s Steering Committee without compensation.
|
||||||
|
“Rahashay Lev” Society
|
145
|
For the sake of good order, it is noted that Ms. Michal Marom Brickman, who served as an external director of the Company, serves as a director and a member of the Investments Committee of the
Management Committee of the Tel‑Aviv Medical Center in the name of Sorosky (without pay). It is further noted that, as the Company was informed, commencing from November 2022, the daughter of Mr. Yosef Tena, an external director of the Company,
is employed by the Tel‑Aviv Medical Center in the name of Sorosky.
|
||||||
|
“Nirim” Society
|
150
|
–
|
||||||
|
“Technoda Hadera Givat Olga” Society
|
300
|
–
|
||||||
|
“Running to Give” Society
|
50
|
For the sake of good order, it is noted that a relative of the Company’s CEO serves as Chairman of the Society without compensation.
|
||||||
|
Total
|
1,645
|
|||||||
| 14. |
Significant valuations
|
|
Subject matter of the valuation
|
Determination of the fair value of the identified assets and liabilities of the Gat power plant and determination of the amount of
the goodwill and the method for allocation thereof to the cash‑generating units pursuant to the provisions of IFRS 3.
|
|
Date of the valuation
|
March 30, 2023.
|
|
Value of the identified assets and liabilities and the amount of the goodwill as at the valuation date
|
About NIS 555 million.
|
|
Identity of the appraiser and his characteristics
|
The valuation was performed by a team headed by Mr. Sagiv Mizrahi, CPA, a partner and team manager in the Corporate Finance Department of the Office of BDO (Ziv Haft).
Sagiv has a Bachelor’s degree in applied mathematics from Bar Ilan University and a Master’s degree in business administration (MBA), with honors, and a specialization in financial management from Tel‑Aviv University. Sagiv has more than
10 years of experience in the areas of business and economic consulting, valuations of companies and financial instruments and economic–accounting work of various types in accordance with International Financial Reporting Standards (IFRS) and
generally accepted accounting principles in the U.S. (U.S GAAP). In the past, Sagiv was a lecturer at Bar Ilan University regarding accounting and valuation matters.
|
| 14. |
Significant valuations (Cont.)
|
|
Valuation model
|
The fair value of the power plant was estimated using the revenues’ method, the multi‑period excess earnings method (MPEEM). The fundamental assumption of this method
is that the value of the asset being estimated equals the present value of the free cash flows allocable to the asset less the fair rate of return of the required assets (the contributing assets) for purposes of realization of these cash
flows.
|
|
|
The assumptions based on which the appraiser performed the valuation
|
– The nominal shekel weighted‑average cost of capital (WACC) rates ranges between 8% and 8.75%.
– Forecast years – represents the period between March 31, 2023 and up to December 31, 2059, and is based on an estimate of the
economic useful life of the power plant.
|
|
|
Subject matter of the valuation
|
Estimation of the fair value of certain assets and liabilities of a renewable energy project pursuant to the provisions of IFRS 3.
|
|
Date of the valuation
|
April 5, 2023.
|
|
Value of the identified assets and liabilities and the amount of the goodwill as at the valuation date
|
About NIS 625 million.
|
|
Identity of the appraiser and his characteristics
|
The valuation was performed by a team headed by Mr. Gil Mor, CPA, Partner, and Manager of the Economics Department in the Office of
Price Waterhouse Coopers Advisory Ltd. Mr. Mor holds a bachelor’s degree in accounting and economics and a master’s degree in business administration (with honors) from Tel‑Aviv University.
|
| 14. |
Significant valuations (Cont.)
|
|
Valuation model
|
The fair value was estimated using the DCF method by means of discounting the project’s future pre‑tax cash flows, at an after‑tax
weighted‑average cost of capital (WACC).
|
|
The assumptions based on which the appraiser performed the valuation
|
– The nominal dollar weighted‑average cost of capital (WACC) rates range between 5.75% and 6.25%.
– Prices – the prices in the forecast (electricity, availability of RECs, etc.) are based PPA agreements and market forecasts
received from external, independent information sources, taking into account the region and the relevant market for each project and the relevant regulation.
– Forecast years – between 20 and 29 years, and is based on an estimate of the economic useful life of the project’s power plant.
|
|
Yair Caspi
|
Giora Almogy
|
|
Chairman of the Board of Directors
|
CEO
|
|
OPC Energy Ltd.
Condensed Consolidated Interim
Financial Statements
As at June 30, 2023
(Unaudited)
|
|
Page
|
|
|
F - 3
|
|
|
F - 4
|
|
|
F - 6
|
|
|
F - 7
|
|
|
F - 8
|
|
|
F - 11
|
|
|
F - 13
|
|
June 30
|
June 30
|
December 31
|
||||||||||
|
2023
|
2022
|
2022
|
||||||||||
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||
|
NIS million
|
NIS million
|
NIS million
|
||||||||||
|
Current assets
|
||||||||||||
|
Cash and cash equivalents
|
818
|
506
|
849
|
|||||||||
|
Short term deposits
|
-
|
-
|
125
|
|||||||||
|
Short-term restricted deposits and cash
|
60
|
37
|
36
|
|||||||||
|
Trade receivables and accrued income
|
277
|
169
|
260
|
|||||||||
|
Other receivables and debit balances
|
160
|
119
|
190
|
|||||||||
|
Inventories
|
9
|
5
|
7
|
|||||||||
|
Short-term derivative financial instruments
|
14
|
12
|
10
|
|||||||||
|
Total current assets
|
1,338
|
848
|
1,477
|
|||||||||
|
Non‑current assets
|
||||||||||||
|
Long-term restricted deposits and cash
|
58
|
53
|
53
|
|||||||||
|
Prepaid expenses and other long-term receivables
|
300
|
193
|
179
|
|||||||||
|
Investments in associates
|
2,496
|
2,043
|
2,296
|
|||||||||
|
Deferred tax assets
|
25
|
36
|
22
|
|||||||||
|
Long-term derivative financial instruments
|
63
|
53
|
57
|
|||||||||
|
Property, plant & equipment
|
6,135
|
4,026
|
4,324
|
|||||||||
|
Right‑of‑use assets
|
488
|
326
|
347
|
|||||||||
|
Intangible assets
|
1,067
|
766
|
777
|
|||||||||
|
Total non‑current assets
|
10,632
|
7,496
|
8,055
|
|||||||||
|
Total assets
|
11,970
|
8,344
|
9,532
|
|||||||||
|
June 30
|
June 30
|
December 31
|
||||||||||
|
2023
|
2022
|
2022
|
||||||||||
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||
|
NIS million
|
NIS million
|
NIS million
|
||||||||||
|
Current liabilities
|
||||||||||||
|
Current maturities of long-term loans from banks and financial institutions
|
183
|
87
|
92
|
|||||||||
|
Current maturities of loans from non‑controlling interests
|
33
|
64
|
13
|
|||||||||
|
Current maturities of debentures
|
113
|
28
|
33
|
|||||||||
|
Trade payables
|
377
|
329
|
335
|
|||||||||
|
Payables and credit balances
|
424
|
73
|
110
|
|||||||||
|
Short-term derivative financial instruments
|
3
|
4
|
3
|
|||||||||
|
Current maturities of lease liabilities
|
62
|
60
|
61
|
|||||||||
|
Current tax liabilities
|
1
|
-
|
2
|
|||||||||
|
Total current liabilities
|
1,196
|
645
|
649
|
|||||||||
|
Non‑current liabilities
|
||||||||||||
|
Long-term loans from banking corporations and financial institutions
|
2,555
|
1,698
|
1,724
|
|||||||||
|
Long-term loans from non-controlling interests
|
400
|
410
|
424
|
|||||||||
|
Debentures
|
1,735
|
1,803
|
1,807
|
|||||||||
|
Long-term lease liabilities
|
209
|
73
|
69
|
|||||||||
|
Other long‑term liabilities
|
146
|
114
|
146
|
|||||||||
|
Deferred tax liabilities
|
479
|
322
|
347
|
|||||||||
|
Total non-current liabilities
|
5,524
|
4,420
|
4,517
|
|||||||||
|
Total liabilities
|
6,720
|
5,065
|
5,166
|
|||||||||
|
Equity
|
||||||||||||
|
Share capital
|
2
|
2
|
2
|
|||||||||
|
Share premium
|
3,210
|
2,392
|
3,209
|
|||||||||
|
Capital reserves
|
645
|
300
|
327
|
|||||||||
|
Retained earnings (loss)
|
8
|
(131
|
)
|
(31
|
)
|
|||||||
|
Total equity attributable to the Company’s shareholders
|
3,865
|
2,563
|
3,507
|
|||||||||
|
Non‑controlling interests
|
1,385
|
716
|
859
|
|||||||||
|
Total equity
|
5,250
|
3,279
|
4,366
|
|||||||||
|
Total liabilities and equity
|
11,970
|
8,344
|
9,532
|
|||||||||
|
Yair Caspi
|
Giora Almogy
|
Ana Berenshtein Shvartsman
|
||
|
Chairman of the Board of Directors
|
Chief Executive Officer
|
Chief Financial Officer
|
|
For the six-month period
ended June 30 |
For the three-month period
ended June 30
|
For the year ended December 31
|
||||||||||||||||||
|
2023
|
2022
|
2023
|
2022
|
2022
|
||||||||||||||||
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
||||||||||||||||
|
Revenues from sales and provision of services
|
1,120
|
873
|
601
|
405
|
1,927
|
|||||||||||||||
|
Cost of sales and services (excluding depreciation and amortization)
|
834
|
643
|
470
|
332
|
1,404
|
|||||||||||||||
|
Depreciation and amortization
|
110
|
86
|
62
|
44
|
191
|
|||||||||||||||
|
Gross profit
|
176
|
144
|
69
|
29
|
332
|
|||||||||||||||
|
General and administrative expenses
|
117
|
96
|
58
|
48
|
239
|
|||||||||||||||
|
Share in the profits (losses) of associates
|
100
|
66
|
15
|
(29
|
)
|
286
|
||||||||||||||
|
Business development expenses
|
30
|
23
|
15
|
13
|
50
|
|||||||||||||||
|
Other expenses, net
|
5
|
-
|
5
|
-
|
-
|
|||||||||||||||
|
Profit (loss) from operating activities
|
124
|
91
|
6
|
(61
|
)
|
329
|
||||||||||||||
|
Finance expenses
|
110
|
86
|
63
|
48
|
167
|
|||||||||||||||
|
Finance income
|
37
|
94
|
8
|
77
|
120
|
|||||||||||||||
|
Finance income (expenses), net
|
(73
|
)
|
8
|
(55
|
)
|
29
|
(47
|
)
|
||||||||||||
|
Profit (loss) before taxes on income
|
51
|
99
|
(49
|
)
|
(32
|
)
|
282
|
|||||||||||||
|
Income tax expenses (tax benefit)
|
12
|
27
|
(9
|
)
|
-
|
65
|
||||||||||||||
|
Profit (loss) for the period
|
39
|
72
|
(40
|
)
|
(32
|
)
|
217
|
|||||||||||||
|
Attributable to:
|
||||||||||||||||||||
|
The Company’s shareholders
|
39
|
67
|
(24
|
)
|
(11
|
)
|
167
|
|||||||||||||
|
Non‑controlling interests
|
-
|
5
|
(16
|
)
|
(21
|
)
|
50
|
|||||||||||||
|
Profit (loss) for the period
|
39
|
72
|
(40
|
)
|
(32
|
)
|
217
|
|||||||||||||
|
Earnings (loss) per share attributable to the Company’s owners
|
||||||||||||||||||||
|
Basic and diluted earnings (loss) per share (in NIS)
|
0.18
|
0.33
|
(0.10
|
)
|
(0.05
|
)
|
0.79
|
|||||||||||||
|
For the six-month period
ended June 30 |
For the three-month period
ended June 30 |
For the year ended December 31
|
||||||||||||||||||
|
2023
|
2022
|
2023
|
2022
|
2022
|
||||||||||||||||
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
||||||||||||||||
|
Profit (loss) for the period
|
39
|
72
|
(40
|
)
|
(32
|
)
|
217
|
|||||||||||||
|
Other comprehensive income items that, subsequent to initial recognition in comprehensive income, were or will be transferred to profit and loss
|
||||||||||||||||||||
|
Effective portion of the change in the fair value of cash flow hedges
|
17
|
39
|
13
|
15
|
50
|
|||||||||||||||
|
Net change in fair value of derivative financial instruments used to hedge cash flows recognized in the cost of the hedged item
|
(4
|
)
|
2
|
(1
|
)
|
(1
|
)
|
(4
|
)
|
|||||||||||
|
Net change in fair value of derivative financial instruments used to hedge cash flows transferred to profit and loss
|
(11
|
)
|
(7
|
)
|
(7
|
)
|
(5
|
)
|
(14
|
)
|
||||||||||
|
Share in other comprehensive income (loss) of associates, net of tax
|
(14
|
)
|
54
|
4
|
9
|
64
|
||||||||||||||
|
Foreign currency translation differences in respect of foreign operations
|
202
|
243
|
96
|
213
|
267
|
|||||||||||||||
|
Tax on other comprehensive income (loss) items
|
1
|
(9
|
)
|
-
|
(4
|
)
|
(9
|
)
|
||||||||||||
|
Other comprehensive income for the period, net of tax
|
191
|
322
|
105
|
227
|
354
|
|||||||||||||||
|
Total comprehensive income for the period
|
230
|
394
|
65
|
195
|
571
|
|||||||||||||||
|
Attributable to:
|
||||||||||||||||||||
|
The Company’s shareholders
|
190
|
292
|
56
|
148
|
412
|
|||||||||||||||
|
Non‑controlling interests
|
40
|
102
|
9
|
47
|
159
|
|||||||||||||||
|
Comprehensive income for the period
|
230
|
394
|
65
|
195
|
571
|
|||||||||||||||
|
Attributable to the Company’s shareholders
|
||||||||||||||||||||||||||||||||||||||||||||
|
Share capital
|
Share premium
|
Capital reserve from transactions with non-controlling interests and merger
|
Hedge fund
|
Foreign operations translation reserve
|
Capital reserve from transactions with shareholders
|
Capital reserve for share-based payment
|
Retained earnings (retained loss)
|
Total
|
Non‑controlling interests
|
Total equity
|
||||||||||||||||||||||||||||||||||
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
||||||||||||||||||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||||||||||||||||||||||||||||
|
For the six-month period ended June 30, 2023
|
||||||||||||||||||||||||||||||||||||||||||||
|
Balance as at January 1, 2023
|
2
|
3,209
|
(25
|
)
|
91
|
159
|
78
|
24
|
(31
|
)
|
3,507
|
859
|
4,366
|
|||||||||||||||||||||||||||||||
|
Investments by holders of non-controlling interests in equity of subsidiary
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
196
|
196
|
|||||||||||||||||||||||||||||||||
|
Share-based payment
|
-
|
-
|
(1
|
)
|
-
|
-
|
-
|
6
|
-
|
5
|
1
|
6
|
||||||||||||||||||||||||||||||||
|
Exercised options and RSUs
|
*-
|
1
|
-
|
-
|
-
|
-
|
(1
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||||||
|
Restructuring - share exchange and investment transaction with Veridis
|
-
|
-
|
163
|
-
|
-
|
-
|
-
|
-
|
163
|
289
|
452
|
|||||||||||||||||||||||||||||||||
|
Other comprehensive income (loss) for the period, net of tax
|
-
|
-
|
-
|
(8
|
)
|
159
|
-
|
-
|
-
|
151
|
40
|
191
|
||||||||||||||||||||||||||||||||
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
39
|
39
|
-
|
39
|
|||||||||||||||||||||||||||||||||
|
Balance on June 30, 2023
|
2
|
3,210
|
137
|
83
|
318
|
78
|
29
|
8
|
3,865
|
1,385
|
5,250
|
|||||||||||||||||||||||||||||||||
|
For the six-month period ended June 30, 2022
|
||||||||||||||||||||||||||||||||||||||||||||
|
Balance as at January 1 2022
|
2
|
2,392
|
(25
|
)
|
32
|
(27
|
)
|
78
|
10
|
(198
|
)
|
2,264
|
577
|
2,841
|
||||||||||||||||||||||||||||||
|
Investments by holders of non-controlling interests in equity of subsidiary
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
37
|
37
|
|||||||||||||||||||||||||||||||||
|
Share-based payment
|
-
|
-
|
-
|
-
|
-
|
-
|
7
|
-
|
7
|
-
|
7
|
|||||||||||||||||||||||||||||||||
|
Exercised options and RSUs
|
*-
|
*-
|
-
|
-
|
-
|
-
|
*-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||||||||||
|
Other comprehensive income for the period, net of tax
|
-
|
-
|
-
|
55
|
170
|
-
|
-
|
-
|
225
|
97
|
322
|
|||||||||||||||||||||||||||||||||
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
67
|
67
|
5
|
72
|
|||||||||||||||||||||||||||||||||
|
Balance on June 30, 2022
|
2
|
2,392
|
(25
|
)
|
87
|
143
|
78
|
17
|
(131
|
)
|
2,563
|
716
|
3,279
|
|||||||||||||||||||||||||||||||
|
Attributable to the Company’s shareholders
|
||||||||||||||||||||||||||||||||||||||||||||
|
Share capital
|
Share premium
|
Capital reserve from transactions with non-controlling interests and merger
|
Hedge fund
|
Foreign operations translation reserve
|
Capital reserve from transactions with shareholders
|
Capital reserve for share-based payment
|
Retained earnings (retained loss)
|
Total
|
Non‑controlling interests
|
Total equity
|
||||||||||||||||||||||||||||||||||
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
||||||||||||||||||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||||||||||||||||||||||||||||
|
For the three-month period ended June 30, 2023
|
||||||||||||||||||||||||||||||||||||||||||||
|
Balance as at April 1, 2023
|
2
|
3,209
|
138
|
78
|
243
|
78
|
28
|
32
|
3,808
|
1,341
|
5,149
|
|||||||||||||||||||||||||||||||||
|
Investments by holders of non-controlling interests in equity of subsidiary
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
34
|
34
|
|||||||||||||||||||||||||||||||||
|
Share-based payment
|
-
|
-
|
(1
|
)
|
-
|
-
|
-
|
2
|
-
|
1
|
1
|
2
|
||||||||||||||||||||||||||||||||
|
Exercised options and RSUs
|
*-
|
1
|
-
|
-
|
-
|
-
|
(1
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||||||
|
Other comprehensive income for the period, net of tax
|
-
|
-
|
-
|
5
|
75
|
-
|
-
|
-
|
80
|
25
|
105
|
|||||||||||||||||||||||||||||||||
|
Loss for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(24
|
)
|
(24
|
)
|
(16
|
)
|
(40
|
)
|
|||||||||||||||||||||||||||||
|
Balance on June 30, 2023
|
2
|
3,210
|
137
|
83
|
318
|
78
|
29
|
8
|
3,865
|
1,385
|
5,250
|
|||||||||||||||||||||||||||||||||
|
For the three-month period ended June 30, 2022
|
||||||||||||||||||||||||||||||||||||||||||||
|
Balance as at April 1 2022
|
2
|
2,392
|
(25
|
)
|
79
|
(8
|
)
|
78
|
13
|
(120
|
)
|
2,411
|
669
|
3,080
|
||||||||||||||||||||||||||||||
|
Share-based payment
|
-
|
-
|
-
|
-
|
-
|
-
|
4
|
-
|
4
|
-
|
4
|
|||||||||||||||||||||||||||||||||
|
Exercised options and RSUs
|
*-
|
*-
|
-
|
-
|
-
|
-
|
*-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||||||||||
|
Other comprehensive income for the period, net of tax
|
-
|
-
|
-
|
8
|
151
|
-
|
-
|
-
|
159
|
68
|
227
|
|||||||||||||||||||||||||||||||||
|
Loss for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(11
|
)
|
(11
|
)
|
(21
|
)
|
(32
|
)
|
|||||||||||||||||||||||||||||
|
Balance on June 30, 2022
|
2
|
2,392
|
(25
|
)
|
87
|
143
|
78
|
17
|
(131
|
)
|
2,563
|
716
|
3,279
|
|||||||||||||||||||||||||||||||
|
Attributable to the Company’s shareholders
|
||||||||||||||||||||||||||||||||||||||||||||
|
Share capital
|
Share premium
|
Capital reserve from transactions with non-controlling interests and merger
|
Hedge fund
|
Foreign operations translation reserve
|
Capital reserve from transactions with shareholders
|
Capital reserve for share-based payment
|
Retained loss
|
Total
|
Non‑controlling interests
|
Total equity
|
||||||||||||||||||||||||||||||||||
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
||||||||||||||||||||||||||||||||||
|
(Audited)
|
||||||||||||||||||||||||||||||||||||||||||||
|
For the year ended December 31, 2022
|
||||||||||||||||||||||||||||||||||||||||||||
|
Balance as at January 1 2022
|
2
|
2,392
|
(25
|
)
|
32
|
(27
|
)
|
78
|
10
|
(198
|
)
|
2,264
|
577
|
2,841
|
||||||||||||||||||||||||||||||
|
Issuance of shares (less issuance expenses)
|
*-
|
815
|
-
|
-
|
-
|
-
|
-
|
-
|
815
|
-
|
815
|
|||||||||||||||||||||||||||||||||
|
Investments by holders of non-controlling interests in equity of subsidiary
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
123
|
123
|
|||||||||||||||||||||||||||||||||
|
Share-based payment
|
-
|
-
|
-
|
-
|
-
|
-
|
16
|
-
|
16
|
-
|
16
|
|||||||||||||||||||||||||||||||||
|
Exercised options and RSUs
|
*-
|
2
|
-
|
-
|
-
|
-
|
(2
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||||||
|
Other comprehensive income for the year, net of tax
|
-
|
-
|
-
|
59
|
186
|
-
|
-
|
-
|
245
|
109
|
354
|
|||||||||||||||||||||||||||||||||
|
Profit for the year
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
167
|
167
|
50
|
217
|
|||||||||||||||||||||||||||||||||
|
Balance as at December 31, 2022
|
2
|
3,209
|
(25
|
)
|
91
|
159
|
78
|
24
|
(31
|
)
|
3,507
|
859
|
4,366
|
|||||||||||||||||||||||||||||||
|
For the six-month period
ended June 30
|
For the three-month period
ended June 30
|
|||||||||||||||||||
|
For the year ended December 31
|
||||||||||||||||||||
|
2023
|
2022
|
2023
|
2022
|
2022
|
||||||||||||||||
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
||||||||||||||||
|
Cash flows from operating activities
|
||||||||||||||||||||
|
Profit (loss) for the period
|
39
|
72
|
(40
|
)
|
(32
|
)
|
217
|
|||||||||||||
|
Adjustments:
|
||||||||||||||||||||
|
Depreciation, amortization and diesel fuel consumption
|
136
|
96
|
84
|
51
|
210
|
|||||||||||||||
|
Finance expenses (income), net
|
73
|
(8
|
)
|
55
|
(29
|
)
|
47
|
|||||||||||||
|
Income tax expenses (tax benefit)
|
12
|
27
|
(9
|
)
|
-
|
65
|
||||||||||||||
|
Share in losses (profits) of associates
|
(100
|
)
|
(66
|
)
|
(15
|
)
|
29
|
(286
|
)
|
|||||||||||
|
Share-based payment transactions (including cash-settled transactions)
|
17
|
17
|
8
|
5
|
62
|
|||||||||||||||
|
177
|
138
|
83
|
24
|
315
|
||||||||||||||||
|
Changes in inventory, trade and other receivables
|
17
|
(19
|
)
|
(75
|
)
|
(44
|
)
|
(84
|
)
|
|||||||||||
|
Changes in trade payables, service providers, other payables and long-term liabilities
|
(33
|
)
|
(23
|
)
|
49
|
25
|
(19
|
)
|
||||||||||||
|
(16
|
)
|
(42
|
)
|
(26
|
)
|
(19
|
)
|
(103
|
)
|
|||||||||||
|
Dividends received from associates
|
4
|
-
|
4
|
-
|
-
|
|||||||||||||||
|
Income tax paid
|
(5
|
)
|
-
|
(4
|
)
|
-
|
(5
|
)
|
||||||||||||
|
Net cash from operating activities
|
160
|
96
|
57
|
5
|
207
|
|||||||||||||||
|
Cash flows from investing activities
|
||||||||||||||||||||
|
Interest received
|
15
|
-
|
9
|
-
|
8
|
|||||||||||||||
|
Short-term restricted deposits and cash, net
|
(17
|
)
|
(34
|
)
|
(32
|
)
|
(21
|
)
|
(33
|
)
|
||||||||||
|
Short term deposits, net
|
125
|
-
|
-
|
-
|
(125
|
)
|
||||||||||||||
|
Provision of short-term collateral(1)
|
-
|
-
|
-
|
-
|
(79
|
)
|
||||||||||||||
|
Release of short-term collateral(1)
|
73
|
-
|
-
|
-
|
17
|
|||||||||||||||
|
Withdrawals from long-term restricted cash
|
-
|
44
|
-
|
29
|
44
|
|||||||||||||||
|
Deposits to long-term restricted cash
|
(1
|
)
|
(2
|
)
|
(1
|
)
|
(1
|
)
|
(2
|
)
|
||||||||||
|
Acquisition of Gat and Mountain Wind, net of cash acquired(2)
|
(893
|
)
|
-
|
(625
|
)
|
-
|
-
|
|||||||||||||
|
Investment in associates
|
(8
|
)
|
(3
|
)
|
(4
|
)
|
(2
|
)
|
(10
|
)
|
||||||||||
|
Subordinated long-term loans to Valley(3)
|
(87
|
)
|
-
|
(87
|
)
|
-
|
-
|
|||||||||||||
|
Proceeds for repayment of partnership capital from associates
|
8
|
9
|
1
|
1
|
15
|
|||||||||||||||
|
Purchase of property, plant, and equipment, intangible assets and long-term deferred expenses
|
(540
|
)
|
(552
|
)
|
(317
|
)
|
(268
|
)
|
(942
|
)
|
||||||||||
|
Proceeds for derivative financial instruments, net
|
9
|
1
|
3
|
3
|
5
|
|||||||||||||||
|
Net cash used in investing activities
|
(1,316
|
)
|
(537
|
)
|
(1,053
|
)
|
(259
|
)
|
(1,102
|
)
|
||||||||||
|
(1)
|
Included mainly a collateral provided to secure transactions to hedge energy margins in Valley (an associate of CPV Group) in 2022, and which was released in the reporting period.
|
| (2) |
For further information, see Notes 6A1, 6B, 7A1 and 7A2.
|
| (3) |
For further information, see Note 11.
|
|
For the six-month period
ended June 30 |
For the three-month period
ended June 30
|
|||||||||||||||||||
|
For the year ended December 31
|
||||||||||||||||||||
|
2023
|
2022
|
2023
|
2022
|
2022
|
||||||||||||||||
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
||||||||||||||||
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
NIS million
|
||||||||||||||||
|
Cash flows from financing activities
|
||||||||||||||||||||
|
Proceeds of share issuance, net of issuance costs
|
-
|
-
|
-
|
-
|
815
|
|||||||||||||||
|
Receipt of long-term loans from banking corporations and financial institutions(2)
|
913
|
253
|
366
|
97
|
291
|
|||||||||||||||
|
Receipt of long-term loans from non-controlling interests
|
45
|
20
|
10
|
9
|
46
|
|||||||||||||||
|
Investments by holders of non-controlling interests in equity of subsidiary
|
196
|
37
|
34
|
-
|
123
|
|||||||||||||||
|
Proceed in respect of restructuring - share exchange and investment transaction with Veridis(4)
|
452
|
-
|
-
|
-
|
-
|
|||||||||||||||
|
Interest paid
|
(59
|
)
|
(41
|
)
|
(25
|
)
|
(11
|
)
|
(86
|
)
|
||||||||||
|
Prepaid costs for loans taken
|
(18
|
)
|
(5
|
)
|
(15
|
)
|
(2
|
)
|
(9
|
)
|
||||||||||
|
Repayment of long-term loans from banking corporations and others
|
(46
|
)
|
(40
|
)
|
(22
|
)
|
(19
|
)
|
(74
|
)
|
||||||||||
|
Repayment of long-term loans as part of the acquisition of Gat (2)
|
(303
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||
|
Repayment of long-term loans from non-controlling interests
|
(74
|
)
|
(14
|
)
|
(38
|
)
|
-
|
(89
|
)
|
|||||||||||
|
Repayment of debentures
|
(16
|
)
|
(10
|
)
|
-
|
-
|
(20
|
)
|
||||||||||||
|
Proceeds (payment) for derivative financial instruments, net
|
3
|
(3
|
)
|
2
|
(1
|
)
|
(3
|
)
|
||||||||||||
|
Repayment of principal in respect of lease liabilities
|
(4
|
)
|
(3
|
)
|
(2
|
)
|
(2
|
)
|
(8
|
)
|
||||||||||
|
Net cash provided by financing activities
|
1,089
|
194
|
310
|
71
|
986
|
|||||||||||||||
|
Net increase (decrease) in cash and cash equivalents
|
(67
|
)
|
(247
|
)
|
(686
|
)
|
(183
|
)
|
91
|
|||||||||||
|
Balance of cash and cash equivalents at beginning of period
|
849
|
731
|
1,503
|
668
|
731
|
|||||||||||||||
|
Effect of exchange rate fluctuations on cash and cash equivalent balances
|
36
|
22
|
1
|
21
|
27
|
|||||||||||||||
|
Balance of cash and cash equivalents at end of period
|
818
|
506
|
818
|
|
506
|
849
|
||||||||||||||
| (4) |
For further information, see Note 6A2.
|
|
|
A. |
Statement of compliance with International Financial Reporting Standards (IFRS)
|
|
|
B. |
Functional and presentation currency
|
|
|
C. |
Use of estimates and judgments
|
|
|
D. |
Reclassification
|
|
|
E. |
Seasonality
|
|
|
A. |
Further to what is stated in Note 27 to the annual financial statements, during the reporting period there were no changes in the composition of the Group’s reportable segments, or in the manner of measuring the results of the segments
by the chief operating decision maker.
|
|
|
B. |
As to changes in the composition of the segments as from December 31, 2022, see Note 27 to the annual financial statements.
|
|
For the six-month period ended June 30, 2023
|
||||||||||||||||||||||||
|
Israel
|
Energy transition in the USA
|
Renewable energies in the USA
|
Other activities in the USA
|
Adjustments to consolidated
|
Consolidated - total
|
|||||||||||||||||||
|
In NIS million
|
(Unaudited)
|
|||||||||||||||||||||||
|
Revenues from sales and provision of services
|
998
|
748
|
67
|
55
|
(748
|
)
|
1,120
|
|||||||||||||||||
|
Adjusted EBITDA after proportional consolidation for the period1
|
210
|
268
|
19
|
(3
|
)
|
(270
|
)
|
224
|
||||||||||||||||
|
Adjustments:
|
||||||||||||||||||||||||
|
Share in profits of associates
|
100
|
|||||||||||||||||||||||
|
Net pre-commissioning expenses in the Zomet Power Plant
|
(18
|
)
|
||||||||||||||||||||||
|
General and administrative expenses at the US headquarters (not allocated to segments)
|
(47
|
)
|
||||||||||||||||||||||
|
General and administrative expenses at the Company’s headquarters (not allocated to segments)
|
(13
|
)
|
||||||||||||||||||||||
|
Total EBITDA for the period
|
246
|
|||||||||||||||||||||||
|
Depreciation and amortization
|
(117
|
)
|
||||||||||||||||||||||
|
Finance expenses, net
|
(73
|
)
|
||||||||||||||||||||||
|
Other expenses, net
|
(5
|
)
|
||||||||||||||||||||||
|
(195
|
)
|
|||||||||||||||||||||||
|
Profit before taxes on income
|
51
|
|||||||||||||||||||||||
|
Expenses for income tax
|
12
|
|||||||||||||||||||||||
|
Profit for the period
|
39
|
|||||||||||||||||||||||
|
For the six-month period ended June 30, 2022 (*)
|
||||||||||||||||||||||||
|
Israel
|
Energy transition in the USA
|
Renewable energies in the USA
|
Other activities in the USA
|
Adjustments to consolidated
|
Consolidated - total
|
|||||||||||||||||||
|
In NIS million
|
(Unaudited)
|
|||||||||||||||||||||||
|
Revenues from sales and provision of services
|
781
|
857
|
52
|
40
|
(857
|
)
|
873
|
|||||||||||||||||
|
Adjusted EBITDA after proportional consolidation for the period
|
146
|
208
|
20
|
1
|
(208
|
)
|
167
|
|||||||||||||||||
|
Adjustments:
|
||||||||||||||||||||||||
|
Share in profits of associates
|
66
|
|||||||||||||||||||||||
|
Net pre-commissioning expenses in the Zomet Power Plant
|
(1
|
)
|
||||||||||||||||||||||
|
General and administrative expenses at the US headquarters (not allocated to segments)
|
(39
|
)
|
||||||||||||||||||||||
|
General and administrative expenses at the Company’s headquarters (not allocated to segments)
|
(11
|
)
|
||||||||||||||||||||||
|
Total EBITDA for the period
|
182
|
|||||||||||||||||||||||
|
Depreciation and amortization
|
(91
|
)
|
||||||||||||||||||||||
|
Finance income, net
|
8
|
|||||||||||||||||||||||
|
(83
|
)
|
|||||||||||||||||||||||
|
Profit before taxes on income
|
99
|
|||||||||||||||||||||||
|
Expenses for income tax
|
27
|
|||||||||||||||||||||||
|
Profit for the period
|
72
|
|||||||||||||||||||||||
| 1 |
For a definition of adjusted EBITDA, please see Note 27 to the annual financial statements.
|
|
For the three-month period ended June 30, 2023
|
||||||||||||||||||||||||
|
Israel
|
Energy transition in the USA
|
Renewable energies in the USA
|
Other activities in the USA
|
Adjustments to consolidated
|
Consolidated - total
|
|||||||||||||||||||
|
In NIS million
|
(Unaudited)
|
|||||||||||||||||||||||
|
Revenues from sales and provision of services
|
534
|
251
|
40
|
27
|
(251
|
)
|
601
|
|||||||||||||||||
|
Adjusted EBITDA after proportional consolidation for the period
|
92
|
87
|
12
|
(3
|
)
|
(87
|
)
|
101
|
||||||||||||||||
|
Adjustments:
|
||||||||||||||||||||||||
|
Share in profits of associates
|
15
|
|||||||||||||||||||||||
|
Net pre-commissioning expenses in the Zomet Power Plant
|
(11
|
)
|
||||||||||||||||||||||
|
General and administrative expenses at the US headquarters (not allocated to segments)
|
(23
|
)
|
||||||||||||||||||||||
|
General and administrative expenses at the Company’s headquarters (not allocated to segments)
|
(6
|
)
|
||||||||||||||||||||||
|
Total EBITDA for the period
|
76
|
|||||||||||||||||||||||
|
Depreciation and amortization
|
(65
|
)
|
||||||||||||||||||||||
|
Finance expenses, net
|
(55
|
)
|
||||||||||||||||||||||
|
Other expenses, net
|
(5
|
)
|
||||||||||||||||||||||
|
(125
|
)
|
|||||||||||||||||||||||
|
Loss before income taxes
|
(49
|
)
|
||||||||||||||||||||||
|
Tax benefit
|
(9
|
)
|
||||||||||||||||||||||
|
Loss for the period
|
(40
|
)
|
||||||||||||||||||||||
|
For the three-month period ended June 30, 2022 (*)
|
||||||||||||||||||||||||
|
Israel
|
Energy transition in the USA
|
Renewable energies in the USA
|
Other activities in the USA
|
Adjustments to consolidated
|
Consolidated - total
|
|||||||||||||||||||
|
In NIS million
|
(Unaudited)
|
|||||||||||||||||||||||
|
Revenues from sales and provision of services
|
353
|
384
|
30
|
22
|
(384
|
)
|
405
|
|||||||||||||||||
|
Adjusted EBITDA after proportional consolidation for the period
|
26
|
72
|
12
|
2
|
(71
|
)
|
41
|
|||||||||||||||||
|
Adjustments:
|
||||||||||||||||||||||||
|
Share in losses of associates
|
(29
|
)
|
||||||||||||||||||||||
|
Net pre-commissioning expenses in the Zomet Power Plant
|
(1
|
)
|
||||||||||||||||||||||
|
General and administrative expenses at the US headquarters (not allocated to segments)
|
(19
|
)
|
||||||||||||||||||||||
|
General and administrative expenses at the Company’s headquarters (not allocated to segments)
|
(6
|
)
|
||||||||||||||||||||||
|
Total EBITDA for the period
|
(14
|
)
|
||||||||||||||||||||||
|
Depreciation and amortization
|
(47
|
)
|
||||||||||||||||||||||
|
Finance income, net
|
29
|
|||||||||||||||||||||||
|
(18
|
)
|
|||||||||||||||||||||||
|
Loss before income taxes
|
(32
|
)
|
||||||||||||||||||||||
|
Loss for the period
|
(32
|
)
|
||||||||||||||||||||||
|
For the year ended December 31, 2022
|
||||||||||||||||||||||||
|
Israel
|
Energy transition in the USA
|
Renewable energies in the USA
|
Other activities in the USA
|
Adjustments to consolidated
|
Consolidated - total
|
|||||||||||||||||||
|
In NIS million
|
(Audited)
|
|||||||||||||||||||||||
|
Revenues from sales and provision of services
|
1,735
|
1,967
|
95
|
97
|
(1,967
|
)
|
1,927
|
|||||||||||||||||
|
Annualized adjusted EBITDA after proportional consolidation
|
367
|
562
|
26
|
-
|
(564
|
)
|
391
|
|||||||||||||||||
|
Adjustments:
|
||||||||||||||||||||||||
|
Share in profits of associates
|
286
|
|||||||||||||||||||||||
|
Net pre-commissioning expenses in the Zomet Power Plant
|
(10
|
)
|
||||||||||||||||||||||
|
General and administrative expenses at the US headquarters (not allocated to segments)
|
(111
|
)
|
||||||||||||||||||||||
|
General and administrative expenses at the Company’s headquarters (not allocated to segments)
|
(26
|
)
|
||||||||||||||||||||||
|
Total EBITDA for the year
|
530
|
|||||||||||||||||||||||
|
Depreciation and amortization
|
(201
|
)
|
||||||||||||||||||||||
|
Finance expenses, net
|
(47
|
)
|
||||||||||||||||||||||
|
(248
|
)
|
|||||||||||||||||||||||
|
Profit before taxes on income
|
282
|
|||||||||||||||||||||||
|
Expenses for income tax
|
65
|
|||||||||||||||||||||||
|
Profit for the year
|
217
|
|||||||||||||||||||||||
|
For the six-month period
ended June 30
|
For the three-month period
ended June 30
|
|||||||||||||||||||
|
For the year ended December 31
|
||||||||||||||||||||
|
2023
|
2022
|
2023
|
2022
|
2022
|
||||||||||||||||
|
In NIS million
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|||||||||||||||||
|
Revenues from sale of electricity in Israel:
|
||||||||||||||||||||
|
Revenues from the sale of energy to private customers
|
624
|
536
|
324
|
245
|
1,212
|
|||||||||||||||
|
Revenues from energy sales to the System Operator and other suppliers
|
65
|
57
|
42
|
17
|
107
|
|||||||||||||||
|
Revenues from sale of steam in Israel
|
31
|
30
|
14
|
16
|
62
|
|||||||||||||||
|
Other income in Israel
|
43
|
14
|
35
|
6
|
39
|
|||||||||||||||
|
Total revenues from sale of energy and others in Israel (excluding infrastructure services)
|
763
|
637
|
415
|
284
|
1,420
|
|||||||||||||||
|
Revenues from private customers for infrastructure services
|
235
|
144
|
119
|
69
|
315
|
|||||||||||||||
|
Total income in Israel
|
998
|
781
|
534
|
353
|
1,735
|
|||||||||||||||
|
Revenues from the sale of electricity from renewable energy in the USA
|
60
|
47
|
36
|
25
|
87
|
|||||||||||||||
|
Revenues from provision of services in the US
|
62
|
45
|
31
|
27
|
105
|
|||||||||||||||
|
Total revenues in the USA
|
122
|
92
|
67
|
52
|
192
|
|||||||||||||||
|
Total income
|
1,120
|
873
|
601
|
405
|
1,927
|
|||||||||||||||
|
|
A. |
Israel
|
|
|
1. |
Business combination that took place in the reporting period - acquisition of the Gat Power Plant
|
|
|
A. |
Israel (cont.)
|
|
|
1. |
Business combination that took place in the reporting period - acquisition of the Gat Power Plant (cont.)
|
|
In NIS million
|
||||
|
Cash and cash equivalents
|
2
|
|||
|
Trade and other receivables
|
24
|
|||
|
Property, plant, and equipment and right-of-use assets - facilities and electricity generation and supply license (1)
|
795
|
|||
|
Property, plant, and equipment - land owned by the Gat Partnership (2)
|
84
|
|||
|
Trade and other payables
|
(23
|
)
|
||
|
Loans from former right holders (3)
|
(303
|
)
|
||
|
Deferred tax liability
|
(109
|
)
|
||
|
Identifiable assets, net
|
470
|
|||
|
Goodwill (4)
|
85
|
|||
|
Total consideration (5)
|
555
|
|||
|
|
(1) |
The Group opted to implement the expedient as per IFRS 3, and allocate the fair value of the facilities and the electricity supply license to a single asset. The fair value was estimated using the MultiPeriod Excess Earning Method
(MPEEM). The valuation methodology included a number of key assumptions that constituted the basis for cash flow forecasts, including, among other things, electricity and gas prices, and nominal post-tax discount rate of 8%-8.75%. The
said assets are amortized over approx. 27 years from the acquisition date, taking into account the expected residual value at the end of the assets’ useful life.
|
|
|
(2) |
The fair value of the land was determined by an external and independent land appraiser using the discounted cash flow technique, , at a rate of 8%.
|
|
|
(3) |
As stated above, the loans were repaid immediately after the acquisition date.
|
|
|
(4) |
The goodwill arising as part of the business combination reflects the synergy between the activity of the Gat Power Plant and the Rotem Power Plant.
|
|
|
(5) |
The consideration includes a cash payment of NIS 270 million plus deferred consideration, whose present value is estimated at NIS 285 million as of the Transaction Completion Date.
|
|
In NIS million
|
||||
|
The aggregate cash flows that were used by the Group for the acquisition transaction:
|
||||
|
Cash and cash equivalents paid
|
270
|
|||
|
Cash and cash equivalents acquired
|
(2
|
)
|
||
|
268
|
||||
|
|
A. |
Israel (cont.)
|
|
|
2. |
Restructuring and investment transaction - Veridis transaction
|
|
|
B. |
USA - Renewable energies segment
|
|
in NIS million (based on
the USD exchange rate at the acquisition date) |
In USD millions
|
|||||||
|
Trade and other receivables
|
14
|
4
|
||||||
|
Property, plant & equipment (1)
|
451
|
127
|
||||||
|
Intangible assets (1)
|
93
|
26
|
||||||
|
Trade and other payables
|
(3
|
)
|
(1
|
)
|
||||
|
Liabilities in respect of evacuation and removal
|
(5
|
)
|
(2
|
)
|
||||
|
Identifiable assets, net
|
550
|
154
|
||||||
|
Goodwill (2)
|
75
|
21
|
||||||
|
Total consideration
|
625
|
175
|
||||||
|
|
(1) |
The fair value was estimated using the discounted cash flow method. The valuation methodology included several key assumptions that constituted the basis for cash flow forecasts, including, among other things, electricity and gas prices,
and nominal post-tax discount rate of 5.75%-6.25%. Intangible assets are amortized over 13 to 17 years, and property, plant, and equipment items are depreciated over 20 to 29 years.
|
|
|
(2) |
The goodwill in the transaction reflects the business potential of the Group’s entry into the renewable energies market in New England, USA. CPV Group expects that the entire amount of the goodwill will be deductible for tax purposes.
|
|
|
A. |
Significant events during and subsequent to the reporting period
|
|
|
1. |
Gat Financing Agreement:
|
|
Loan principal
|
NIS 450 million, repayable in quarterly installments, starting from September 25, 2023, with the final repayment date being May 10, 2039 (subject to the stipulated early repayment
provisions in the agreement)
|
|
Interest on the loan
|
• Prime interest + a spread ranging from 0.4% to 0.9% per annum.
• Conversion from a variable interest to fixed, unlinked interest, in accordance with the conversion mechanism (unlinked interest payable on
government bonds as defined in the agreement + a spread ranging from 2.05% to 2.55%), according to the earliest of: four years from the date of the first withdrawal or at the Gat Partnership’s discretion, or at the Bank’s discretion, in
accordance with the forced conversion mechanism, as stipulated in the agreement.
• Repayment in quarterly installments, starting on June 25, 2023.
|
|
Collateral and pledges
|
• Collateral were provided on all of the Gat Partnership’s assets and rights in it, including the real estate, bank accounts, insurances, the Gat
Partnership’s assets and rights in connection with the Project Agreements (as defined in the agreement).
• A lien was placed on the rights of the entities holding the Gat Partnership.
• Guarantees were provided by the Company and Veridis Power Plants, each in accordance with its proportionate share in the Gat Partnership, as
well as OPC Power Plants, to pay all principal and accrued interest payments, in connection with the completion of the registration of the collateral and the payment of the Deferred Consideration balance under the circumstances and subject
to the terms set in the letter of guarantee.
|
|
Liabilities
|
The agreement prescribes certain restrictions and liabilities as is generally accepted in agreements of this type, including:
• Prohibition on pledging assets, and restrictions on the sale and transfer of assets;
• Restrictions on assuming financial debts and providing guarantees;
• requirement to obtain Bank Leumi’s approval for engagement in material agreements and other material actions;
• Undertaking in connection with holding certain reserve deposits for maintenance and debt service;
• Bank Leumi was granted veto rights and other rights in connection with certain decisions as is generally accepted in agreements of this type;
• Undertaking to obtain rating for the project under certain circumstances.
|
|
|
A. |
Significant events during and subsequent to the reporting period (cont.)
|
|
|
1. |
Gat Financing Agreement: (cont.)
|
|
Financial covenants and default events
|
The agreement prescribes standard default events as is generally accepted in agreements of this type, including:
• Various default events;
• Shutdown of the Gat Power Plant;
• Payment default;
• Events that have a material adverse
effect;
• Cross-default events by parties to
certain project agreements;
• certain events relating to the
project (as defined in the agreement);
• Certain changes in ownership/control;
• Certain force majeure events;
• Events associated with insurance
coverage of activity of the Gat Power Plant;
• Non‑compliance with the financial
ratios as set out in Note 7C and OPC Power Plants and certain other Group entities’ non-compliance with certain financial covenants;
• Certain legal proceedings in
connection with the Gat Partnership.
|
|
Conditions for distribution
|
Distributions by the Gat Partnership (as defined in the Gat Financing Agreement, including a repayment of shareholders’ loans) is subject to a
number of terms and conditions outlined in the agreement, including, among other things:
• Compliance with the following
financial covenants: Historic DSCR, Average Projected DSCR and LLCR at a minimal rate of 1.15;
• A first quarterly principal and
interest payment was made;
• The provisions of the agreement were
complied with;
• no more than four distributions will
be carried out in a 12-month period.
|
|
|
A. |
Significant events during and subsequent to the reporting period (cont.)
|
|
|
1. |
Gat Financing Agreement: (cont.)
|
|
|
2. |
Mountain Wind financing agreement
|
|
|
A. |
Significant events during and subsequent to the reporting period (cont.)
|
|
|
3. |
Tax equity partner agreement in Maple Hill
|
|
|
4. |
During the reporting period, the Company published a shelf prospectus that will be in effect through May 31, 2026.
|
|
|
5. |
On August 1, 2023, Maalot (S&P) reiterated the rating of the Company and its debentures at ‘ilA-’, and updated the outlook to negative.
|
|
|
A. |
Significant events during and subsequent to the reporting period (cont.)
|
|
|
6. |
Further to what is stated in Note 16B3 to the annual financial statements, in June 2023 the Company signed an agreement with a banking corporation whereunder the binding credit facility was increased by NIS 50 million, and a credit
facility of up to NIS 75 million was added for the purpose of providing non-financial guarantees. The term of the credit facility was extended to June 28, 2024.
|
|
|
B. |
Changes in the Group’s material guarantees:
|
|
As at June 30, 2023
|
As at December 31, 2022
|
|||||||
|
For operating projects in Israel (Rotem, Hadera and the Gat Power Plant) (1)
|
144
|
111
|
||||||
|
For Zomet (2)
|
100
|
74
|
||||||
|
For projects under construction and development in Israel (Sorek and consumers’ premises)
|
45
|
54
|
||||||
|
For virtual supply activity in Israel
|
53
|
62
|
||||||
|
In respect of the Eshkol tender
|
50
|
-
|
||||||
|
For operating projects in the USA (Keenan)
|
48
|
50
|
||||||
|
In respect of projects under construction and development in the USA (Group 3) (CPV)
|
226
|
90
|
||||||
|
Total
|
666
|
441
|
||||||
|
|
(1) |
The increase arises mainly from an increase in bank guarantees provided by the companies in favor of the System Operator in the ordinary course of business.
|
|
|
(2) |
The increase in the balance of guarantees stems mainly from an increase in bank guarantees provided by the Company in the name of Zomet in favor of the Israeli Electricity Authority in respect of the permanent generation license, and in
favor of Zomet’s lenders as part of the Equity Subscription Agreement (as described in Note 16B2 to the annual financial statements).
|
|
|
(3) |
The increase stems mainly from an increase in bank guarantees provided to various third parties in connection with a renewable energies project under advanced development.
|
|
|
C. |
Financial covenants:
|
|
Ratio
|
Required value Series B
|
Required value Series C
|
Actual value
|
||||
|
Net financial debt (1) to adjusted EBITDA (2)
|
will not exceed 13 ((for distribution purposes - 11)
|
will not exceed 13 ((for distribution purposes - 11)
|
6.1
|
||||
|
The Company shareholders’ equity (separate)
|
will not fall below NIS 250 million (for distribution purposes - NIS 350 million)
|
will not fall below NIS 1 billion (for distribution purposes - NIS 1.4 billion)
|
NIS 3,865 million
|
||||
|
The Company’s equity to asset ratio (separate)
|
will not fall below 17% (for distribution purposes - 27%)
|
will not fall below 20% (for distribution purposes - 30%)
|
67%
|
||||
|
The Company’s equity to asset ratio (consolidated)
|
--
|
will not fall below 17%
|
44%
|
|
|
C. |
Financial covenants: (cont.)
|
|
Financial covenants
|
Breach ratio
|
Actual value
|
|||
|
Covenants applicable to Hadera in connection with the Hadera Financing Agreement
|
|||||
|
Minimum projected DSCR
|
1.10
|
1.19
|
|||
|
Average projected DSCR
|
1.10
|
1.56
|
|||
|
LLCR
|
1.10
|
1.68
|
|||
|
Covenants applicable to the Company in connection with the Hadera Equity Subscription Agreement
|
|||||
|
Company’s shareholders equity (separate) (through the end of the construction contractor’s warranty period)
|
will not fall below NIS 250 million
|
NIS 3,865 million
|
|||
|
The Company’s equity to asset ratio (separate)
|
will not fall below 20%
|
67%
|
|||
|
Minimum cash balance or bank guarantee from Hadera’s commercial operation date through the end of the construction contractor’s warranty period
|
will not fall below NIS 50 million
|
NIS 275 million
|
|||
|
Covenants applicable to Zomet in connection with the Zomet Financing Agreement (1)
|
|||||
|
Expected ADSCR
|
1.05
|
1.37
|
|||
|
Historic ADSCR
|
1.05
|
N/A
|
|||
|
LLCR
|
1.05
|
1.42
|
|||
|
Covenants applicable to the Gat Partnership in connection with the Gat Financing Agreement
|
|||||
|
Minimum projected DSCR
|
1.05
|
1.35
|
|||
|
Average projected DSCR
|
1.05
|
1.35
|
|||
|
LLCR
|
1.05
|
1.36
|
|||
|
Covenants applicable to OPC Power Plants in connection with the Gat Equity Subscription Agreement
|
|||||
|
OPC Power Plants’ total assets balance
|
will not fall below NIS 2,500 million
|
NIS 5,523 million
|
|||
|
OPC Power Plant’s equity to asset ratio
|
will not fall below 15%
|
31%
|
|||
|
Ratio of net debt to adjusted EBITDA of OPC Power Plants
|
will not exceed 12
|
3.6
|
|||
|
OPC Power Plants’ minimum cash balance
|
will not fall below NIS 30 million
|
NIS 173 million
|
|||
|
OPC Power Plants’ minimum cash balance (”separate”)
|
will not fall below NIS 20 million
|
NIS 21 million
|
|||
|
Covenants applicable to the Company in connection with the Harel credit facility
|
|||||
|
The Company shareholders’ equity (separate)
|
will not fall below NIS 550 million
|
NIS 3,865 million
|
|||
|
The Company’s equity to asset ratio (separate)
|
will not fall below 20%
|
67%
|
|||
|
The Company’s net debt to adjusted EBITDA ratio
|
will not exceed 12
|
6.1
|
|||
|
The LTV of the pledged rights
|
will be less than 50%
|
N/A
|
|||
|
Covenants applicable to the Company in connection with the Discount credit facility
|
|||||
|
The Company shareholders’ equity (separate)
|
will not fall below NIS 1,000 million
|
NIS 3,865 million
|
|||
|
The Company’s equity to asset ratio (separate)
|
will not fall below 20%
|
67%
|
|||
|
Covenants applicable to the Company in connection with the Mizrahi credit facility
|
|||||
|
The Company shareholders’ equity (separate)
|
will not fall below NIS 550 million
|
NIS 3,865 million
|
|||
|
The Company’s equity to asset ratio (separate)
|
will not fall below 20%
|
67%
|
|||
|
Covenants applicable to the Company in connection with Hapoalim credit facility
|
|||||
|
The Company’s shareholders’ equity (separate)
|
will not at any time fall below NIS 1,200 million
|
NIS 3,865 million
|
|||
|
The Company’s equity to asset ratio
|
will not at any time fall below 40%
|
44%
|
|||
|
The ratio between the net financial debt less the financial debt designated for construction of the projects that have not yet started to generate EBITDA, and the adjusted EBITDA
|
will not exceed 12
|
6.1
|
|||
|
|
(1) |
It should be noted that according to the Zomet Financing Agreement the historical ADSCR financial covenant shall be assessed for the first time after the first repayment date of the loans principal.
|
|
|
D. |
Issuance of shares in respect of share-based payment and exercise of options
|
|
|
1. |
Options – during the reporting period, the Company issued additional 7,975 ordinary shares of the Company of NIS 0.01 par value each to Group officers
following announcements of net exercise of 22,786 options.
|
|
|
2. |
RSUs – during the reporting period, the Company issued a total of 14,017 ordinary shares of the Company of NIS 0.01 par value each to Group officers in view
of the vesting of some of the RSUs awarded to them as part of an equity compensation plan to Company’s employees as described in Note 18B to the Annual Financial Statements.
|
|
|
A. |
Commitments
|
|
|
1. |
In June 2023, CPV Group entered into an EPC agreement with a construction contractor in respect of the construction of a solar-powered project with a capacity of 170 MWdc located in Maryland, United States (hereinafter - the “Backbone
Project”). In accordance with the agreement, the contractor is required to plan, purchase, install, build, test, and operate the solar project in full, on a turnkey basis. As of the approval date of the financial statements, the total
consideration in the EPC agreement was set at a fixed amount of NIS 650 million (approx. USD 175 million), which will be paid in accordance with the milestones set in the EPC agreement.
|
|
|
2. |
In the reporting period, an agreement for the lease of land for the Backbone project entered into force in CPV Group. The term of the agreement is 37 years, with an option to extend the term by five further periods of seven years each.
During the reporting period, a lease liability and a right-of-use asset in the amount of NIS 122 million (approx. USD 33 million) were recognized.
|
|
|
3. |
Further to what is stated in Note 28C3 to the annual financial statements regarding Rotem and Hadera’s natural gas purchase agreements with Energean Israel Limited (hereinafter – “Energean”), in the reporting period Energean issued
Hadera with a notice regarding the completion of the commissioning for the purpose of the Hadera agreement on February 28, 2023; Energean also issued Rotem with a notice regarding the completion of the commissioning for the purpose of the
Rotem agreement on March 25, 2023, and a notice regarding commercial operation on March 26, 2023.
Furthermore, in the first quarter of 2023, Rotem and Hadera recognized a NIS 18 million (approx. USD 5 million) contractual financial amount, which was recognized in the cost of sales
line item and is expected to be received in early 2024.
|
|
|
4. |
Further to what is stated in Note 11B1(e) to the annual financial statements regarding the filing of the appraisal appeal by the joint corporation in respect of the assessment that was issued by the Israel Lands Authority
(hereinafter – “ILA”) in respect of the land of the Zomet Power Plant, in January 2023, a decision was made regarding the initial appeal, whereby the amount of the final assessment was reduced to NIS 154 million (excluding VAT). In May
2023, Zomet appealed against the decision regarding the appeal.
|
|
|
B. |
Claims and other liabilities
|
|
|
1. |
Further to what is stated in Note 28A1 to the annual financial statements regarding a motion for certification of a derivative lawsuit regarding the power purchase transaction, in February 2023 the court handed down a judgment that
approved the settlement agreement, and during the reporting period, Rotem paid a total of NIS 2 million, which reflects its share as set out in the settlement agreement.
|
|
|
2. |
Further to what is stated in Note 28A4 to the annual financial statements, regarding the arbitration proceeding conducted with the Hadera construction contractor, the latter’s request to amend its pleadings was allowed, such that the
contractor may add a claim for receipt of a final acceptance certificate of the power plant under the construction agreement; the amended pleadings were subsequently filed. In April 2023, the Company filed its response to the amended
pleadings and a counter-claim. As of the approval date of the report, evidentiary hearings in the proceeding were scheduled for June 2024.
|
|
|
A. |
Financial instruments measured at fair value for disclosure purposes only
|
|
As at June 30, 2023
|
||||||||
|
Carrying amount (*)
|
Fair value
|
|||||||
|
(Unaudited)
|
(Unaudited)
|
|||||||
|
NIS million
|
NIS million
|
|||||||
|
Loans from banks and financial institutions (Level 2)
|
2,740
|
2,740
|
||||||
|
Loans from non‑controlling interests (Level 2)
|
433
|
403
|
||||||
|
Debentures (Level 1)
|
1,861
|
1,720
|
||||||
|
5,034
|
4,863
|
|||||||
|
As at June 30, 2022
|
||||||||
|
Carrying amount (*)
|
Fair value
|
|||||||
|
(Unaudited)
|
(Unaudited)
|
|||||||
|
NIS million
|
NIS million
|
|||||||
|
Loans from banks and financial institutions (Level 2)
|
1,785
|
1,872
|
||||||
|
Loans from non‑controlling interests (Level 2)
|
474
|
429
|
||||||
|
Debentures (Level 1)
|
1,845
|
1,791
|
||||||
|
4,104
|
4,092
|
|||||||
|
As at December 31, 2022
|
||||||||
|
Carrying amount (*)
|
Fair value
|
|||||||
|
(Audited)
|
(Audited)
|
|||||||
|
NIS million
|
NIS million
|
|||||||
|
Loans from banks and financial institutions (Level 2)
|
1,817
|
1,859
|
||||||
|
Loans from non‑controlling interests (Level 2)
|
437
|
400
|
||||||
|
Debentures (Level 1)
|
1,854
|
1,734
|
||||||
|
4,108
|
3,993
|
|||||||
|
|
B. |
Fair value hierarchy of financial instruments measured at fair value
|
|
As at June 30
|
As at December 31
|
|||||||||||
|
2023
|
2022
|
2022
|
||||||||||
|
(Unaudited)
|
(Audited)
|
|||||||||||
|
In NIS million
|
||||||||||||
|
Financial assets
|
||||||||||||
|
Derivatives used for hedge accounting
|
||||||||||||
|
CPI swap contracts (Level 2)
|
38
|
30
|
(*) 33
|
|
||||||||
|
Interest rate swaps (USA) (Level 2)
|
29
|
18
|
24
|
|||||||||
|
Forwards on exchange rates (Level 2)
|
1
|
7
|
2
|
|||||||||
|
Total
|
68
|
55
|
59
|
|||||||||
|
|
A. |
In the six‑month periods ended June 30, 2023 and 2022 the Group purchased property, plant and equipment for a total of approx. NIS 1,820 million and approx. NIS 405 million, respectively, including property, plant and equipment
purchased under a business combination during the six-month period ended June 30, 2023, for a total of approx. NIS 1,321 million, as detailed in Notes 6A1 and 6B.
|
|
|
B. |
The commercial operation period of the Zomet Power Plant commenced on June 22, 2023. The commercial operation period of the Three Rivers power plant commenced subsequent to the reporting date (CPV Group’s share - 10%).
|
|
|
C. |
Further to what is stated in Note 18C to the annual financial statements regarding a profit-sharing plan for CPV Group employees, the Plan’s fair value as of the report date amounted to approx. NIS 155 million (approx. USD 42 million);
this value was estimated using the option pricing model (OPM), based on a standard deviation of 28%, risk-free interest of 4.6%, and expected remaining useful life until exercise of 2.5 years. In the reporting period, NIS 11 million in
expenses were recognized (approx. NIS 10 million in the corresponding period last year).
|
|
|
D. |
Further to what is stated in Note 25A2 to the annual financial statements, in the reporting period, the Company and non-controlling interests made equity investments in the partnership OPC Power Ventures LP (both directly and
indirectly) a total of approx. NIS 487 million (approx. USD 134 million), and extended approx. NIS 151 million (approx. USD 41 million) in loans, based on their stake in the partnership. Subsequent to the reporting date, further equity
investments and shareholders’ loans totaling NIS 54 million (approx. USD 15 million) and NIS 17 million (approx. USD 5 million), respectively, were advanced. As of the approval date of the financial statements, there are no remaining
investment commitments or outstanding shareholders’ loans. The Company acts in collaboration with the non-controlling interests to increase the liabilities balance by approx. USD 100 million during the third quarter of 2023. As of the
report’s approval date, there is no certainty regarding the increase of the credit facility and supplementation date.
|
|
|
E. |
For more information regarding developments in credit from banking corporations and others, debentures, guarantees and equity in the reporting period and thereafter, see Note 7.
|
|
|
F. |
For more information regarding developments in commitments, legal claims and other liabilities in the reporting period and thereafter, see note 8.
|
|
|
G. |
On May 10, 2023, it was announced that the Group through OPC Power Plants (hereinafter - the “Winner”) won the tender issued by ILA for planning and an option to purchase leasehold rights in land for the construction of renewable
energy electricity generation facilities using photovoltaic technology in combination with storage in relation to three compounds in the Neot Hovav Industrial Local Council, with a total area of approx. 227 hectares. The Group’s bids in
this Tender total NIS 484 million, in the aggregate, for all three Tender Compounds.
|
| A. |
The annual repayments of the loan principal until a Title V permit is received (if it is, indeed, received) and reaching a certain leveraging ratio as set in the amendment and extension agreement shall amount to the entire free cash flow
amount of Valley (100% cash sweep). After receiving the Title V permit and complying with the coverage ratio that was set, the annual repayment amount shall vary, and will be calculated based of a combination of a fixed predetermined
amortization schedule and a 50% cash sweep mechanism, such that the entire free cash flow in excess of the said amount will be available to Valley, and will be used to cover operating costs, service the debt, and other liquidity needs.
|
| B. |
On the signing date of the Amendment and Extension Agreement, Valley repaid NIS 200 million (approx. USD 55 million; CPV Group’s share - 50%) by advancing subordinated shareholders’ loans to Valley (the Company’s share in the said
shareholders’ loans is NIS 61 million, approx. USD 17 million).
|
| C. |
The base interest was revised to SOFR-based interest plus a weighted average interest margin of 5.75% for the project.
|
|
As at June 30, 2023
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Cash and cash equivalents
|
93
|
1,498
|
1,591
|
|||||||||||||
|
Restricted cash
|
1,498
|
(1,498
|
)
|
-
|
||||||||||||
|
Property, plant & equipment
|
A, C, D
|
775,365
|
(159,747
|
)
|
615,618
|
|||||||||||
|
Intangible assets
|
D
|
20,269
|
(20,269
|
)
|
-
|
|||||||||||
|
Other assets
|
57,986
|
-
|
57,986
|
|||||||||||||
|
Total assets
|
855,211
|
(180,016
|
)
|
675,195
|
||||||||||||
|
Accounts payable and deferred expenses
|
A
|
12,647
|
(1,093
|
)
|
11,554
|
|||||||||||
|
Other liabilities
|
458,554
|
(3,109
|
)
|
455,445
|
||||||||||||
|
Total liabilities
|
471,201
|
(4,202
|
)
|
466,999
|
||||||||||||
|
Partners’ equity
|
A, C
|
384,010
|
(175,814
|
)
|
208,196
|
|||||||||||
|
Total liabilities and equity
|
855,211
|
(180,016
|
)
|
675,195
|
||||||||||||
|
As at June 30, 2022
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Cash and cash equivalents
|
99
|
1,710
|
1,809
|
|||||||||||||
|
Restricted cash
|
|
5,266
|
(1,710
|
)
|
3,556
|
|||||||||||
|
Property, plant & equipment
|
A, C, D
|
798,906
|
(177,853
|
)
|
621,053
|
|||||||||||
|
Intangible assets
|
D
|
14,411
|
(14,411
|
)
|
-
|
|||||||||||
|
Other assets
|
117,590
|
-
|
117,590
|
|||||||||||||
|
Total assets
|
936,272
|
(192,264
|
)
|
744,008
|
||||||||||||
|
Accounts payable and deferred expenses
|
A
|
31,358
|
(1,242
|
)
|
30,116
|
|||||||||||
|
Other liabilities
|
566,082
|
-
|
566,082
|
|||||||||||||
|
Total liabilities
|
597,440
|
(1,242
|
)
|
596,198
|
||||||||||||
|
Partners’ equity
|
A, C
|
338,832
|
(191,022
|
)
|
147,810
|
|||||||||||
|
Total liabilities and equity
|
936,272
|
(192,264
|
)
|
744,008
|
||||||||||||
|
As at December 31, 2022
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Cash and cash equivalents
|
145
|
1,041
|
1,186
|
|||||||||||||
|
Restricted cash
|
4,630
|
(1,041
|
)
|
3,589
|
||||||||||||
|
Property, plant & equipment
|
A, C, D
|
786,365
|
(165,597
|
)
|
620,768
|
|||||||||||
|
Intangible assets
|
D
|
20,604
|
(20,604
|
)
|
-
|
|||||||||||
|
Other assets
|
112,188
|
-
|
112,188
|
|||||||||||||
|
Total assets
|
923,932
|
(186,201
|
)
|
737,731
|
||||||||||||
|
Accounts payable and deferred expenses
|
A
|
31,775
|
(1,409
|
)
|
30,366
|
|||||||||||
|
Other liabilities
|
518,259
|
-
|
518,259
|
|||||||||||||
|
Total liabilities
|
550,034
|
(1,409
|
)
|
548,625
|
||||||||||||
|
Partners’ equity
|
A, C
|
373,898
|
(184,792
|
)
|
189,106
|
|||||||||||
|
Total liabilities and equity
|
923,932
|
(186,201
|
)
|
737,731
|
||||||||||||
|
For the six-month period ended June 30, 2023
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Revenues
|
107,951
|
-
|
107,951
|
|||||||||||||
|
Operating expenses
|
A
|
63,235
|
(2,515
|
)
|
60,720
|
|||||||||||
|
Depreciation and amortization
|
C
|
13,030
|
(3,355
|
)
|
9,675
|
|||||||||||
|
Operating profit
|
31,686
|
5,870
|
37,556
|
|||||||||||||
|
Finance expenses
|
B
|
21,224
|
(5,202
|
)
|
16,022
|
|||||||||||
|
Profit for the period
|
10,462
|
11,072
|
21,534
|
|||||||||||||
|
Other comprehensive loss - derivative financial instruments
|
B
|
(350
|
)
|
(2,094
|
)
|
(2,444
|
)
|
|||||||||
|
Comprehensive income for the period
|
10,112
|
8,978
|
19,090
|
|||||||||||||
|
For the six-month period ended June 30, 2022
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Revenues
|
189,661
|
-
|
189,661
|
|||||||||||||
|
Operating expenses
|
A
|
143,297
|
(2,729
|
)
|
140,568
|
|||||||||||
|
Depreciation and amortization
|
C
|
12,892
|
(3,355
|
)
|
9,537
|
|||||||||||
|
Operating profit
|
33,472
|
6,084
|
39,556
|
|||||||||||||
|
Finance expenses
|
B
|
15,614
|
(3,458
|
)
|
12,156
|
|||||||||||
|
Profit for the period
|
17,858
|
9,542
|
27,400
|
|||||||||||||
|
Other comprehensive income - derivative financial instruments
|
B
|
5,076
|
(3,458
|
)
|
1,618
|
|||||||||||
|
Comprehensive income for the period
|
22,934
|
6,084
|
29,018
|
|||||||||||||
|
For the three-month period ended June 30, 2023
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Revenues
|
30,033
|
-
|
30,033
|
|||||||||||||
|
Operating expenses
|
A
|
26,687
|
(1,092
|
)
|
25,595
|
|||||||||||
|
Depreciation and amortization
|
C
|
6,515
|
(1,678
|
)
|
4,837
|
|||||||||||
|
Operating profit
|
(3,169
|
)
|
2,770
|
(399
|
)
|
|||||||||||
|
Finance expenses
|
B
|
12,097
|
(3,668
|
)
|
8,429
|
|||||||||||
|
Loss for the period
|
(15,266
|
)
|
6,438
|
(8,828
|
)
|
|||||||||||
|
Other comprehensive loss - derivative financial instruments
|
B
|
(1,101
|
)
|
(560
|
)
|
(1,661
|
)
|
|||||||||
|
Comprehensive loss for the period
|
(16,367
|
)
|
5,878
|
(10,489
|
)
|
|||||||||||
|
For the three-month period ended June 30, 2022
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Revenues
|
73,900
|
-
|
73,900
|
|||||||||||||
|
Operating expenses
|
A
|
69,542
|
(1,242
|
)
|
68,300
|
|||||||||||
|
Depreciation and amortization
|
C
|
6,457
|
(1,678
|
)
|
4,779
|
|||||||||||
|
Operating profit (loss)
|
(2,099
|
)
|
2,920
|
821
|
||||||||||||
|
Finance expenses
|
B
|
7,779
|
(1,709
|
)
|
6,070
|
|||||||||||
|
Loss for the period
|
(9,878
|
)
|
4,629
|
(5,249
|
)
|
|||||||||||
|
Other comprehensive loss - derivative financial instruments
|
B
|
(31
|
)
|
(1,709
|
)
|
(1,740
|
)
|
|||||||||
|
Comprehensive loss for the period
|
(9,909
|
)
|
2,920
|
(6,989
|
)
|
|||||||||||
|
For the year ended December 31, 2022
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Revenues
|
405,548
|
-
|
405,548
|
|||||||||||||
|
Operating expenses
|
A
|
296,645
|
(5,603
|
)
|
291,042
|
|||||||||||
|
Depreciation and amortization
|
C
|
25,714
|
(6,709
|
)
|
19,005
|
|||||||||||
|
Operating profit
|
83,189
|
12,312
|
95,501
|
|||||||||||||
|
Finance expenses
|
B
|
32,913
|
(6,546
|
)
|
26,367
|
|||||||||||
|
Profit for the year
|
50,276
|
18,858
|
69,134
|
|||||||||||||
|
Other comprehensive income (loss) - derivative financial instruments
|
B
|
7,724
|
(6,546
|
)
|
1,178
|
|||||||||||
|
Comprehensive income for the year
|
58,000
|
12,312
|
70,312
|
|||||||||||||
|
For the six-month period ended June 30, 2023
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Profit for the period
|
A, B, C
|
10,462
|
11,072
|
21,534
|
||||||||||||
|
Net cash from operating activities
|
36,835
|
-
|
36,835
|
|||||||||||||
|
Net cash provided by (used in) investing activities
|
E
|
(1,426
|
)
|
18,630
|
17,204
|
|||||||||||
|
Net cash used in financing activities
|
(53,635
|
)
|
-
|
(53,635
|
)
|
|||||||||||
|
Net increase (decrease) in cash and cash equivalents
|
(18,226
|
)
|
18,630
|
404
|
||||||||||||
|
Balance of cash and cash equivalents at beginning of period
|
E
|
145
|
1,042
|
1,187
|
||||||||||||
|
|
||||||||||||||||
|
Restricted cash balance at beginning of period
|
E
|
57,680
|
(57,680
|
)
|
-
|
|||||||||||
|
Balance of cash and cash equivalents at end of period
|
E
|
93
|
1,498
|
1,591
|
||||||||||||
|
|
||||||||||||||||
|
Restricted cash balance at end of period
|
E
|
39,506
|
(39,506
|
)
|
-
|
|||||||||||
|
For the six-month period ended June 30, 2022
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Profit for the period
|
A, B, C
|
17,858
|
9,542
|
27,400
|
||||||||||||
|
Net cash from operating activities
|
31,292
|
-
|
31,292
|
|||||||||||||
|
Net cash used in investing activities
|
E
|
(4,585
|
)
|
(8,062
|
)
|
(12,647
|
)
|
|||||||||
|
Net cash used in financing activities
|
(17,115
|
)
|
-
|
(17,115
|
)
|
|||||||||||
|
Net increase (decrease) in cash and cash equivalents
|
9,592
|
(8,062
|
)
|
1,530
|
||||||||||||
|
Balance of cash and cash equivalents at beginning of period
|
E
|
98
|
181
|
279
|
||||||||||||
|
Restricted cash balance at beginning of period
|
E
|
76,390
|
(76,390
|
)
|
-
|
|||||||||||
|
Balance of cash and cash equivalents at end of period
|
E
|
99
|
1,710
|
1,809
|
||||||||||||
|
Restricted cash balance at end of period
|
E
|
85,981
|
(85,981
|
)
|
-
|
|||||||||||
|
For the three-month period ended June 30, 2023
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Loss for the period
|
A, B, C
|
(15,266
|
)
|
6,438
|
(8,828
|
)
|
||||||||||
|
Net cash from operating activities
|
851
|
-
|
851
|
|||||||||||||
|
Net cash used in investing activities
|
E
|
(1,200
|
)
|
(1,359
|
)
|
(2,559
|
)
|
|||||||||
|
Net cash used in financing activities
|
(8,915
|
)
|
-
|
(8,915
|
)
|
|||||||||||
|
Net decrease in cash and cash equivalents
|
(9,264
|
)
|
(1,359
|
)
|
(10,623
|
)
|
||||||||||
|
Balance of cash and cash equivalents at beginning of period
|
E
|
92
|
12,122
|
12,214
|
||||||||||||
|
Restricted cash balance at beginning of period
|
E
|
48,771
|
(48,771
|
)
|
-
|
|||||||||||
|
Balance of cash and cash equivalents at end of period
|
E
|
93
|
1,498
|
1,591
|
||||||||||||
|
Restricted cash balance at end of period
|
E
|
39,506
|
(39,506
|
)
|
-
|
|||||||||||
|
For the three-month period ended June 30, 2022
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Loss for the period
|
A, B, C
|
(9,878
|
)
|
4,629
|
(5,249
|
)
|
||||||||||
|
Net cash from operating activities
|
8,112
|
-
|
8,112
|
|||||||||||||
|
Net cash used in investing activities
|
E
|
(243
|
)
|
5,321
|
5,078
|
|||||||||||
|
Net cash used in financing activities
|
(14,022
|
)
|
-
|
(14,022
|
)
|
|||||||||||
|
Net increase (decrease) in cash and cash equivalents
|
(6,153
|
)
|
5,321
|
(832
|
)
|
|||||||||||
|
|
||||||||||||||||
|
Balance of cash and cash equivalents at beginning of period
|
E
|
98
|
2,543
|
2,641
|
||||||||||||
|
Restricted cash balance at beginning of period
|
E
|
92,135
|
(92,135
|
)
|
-
|
|||||||||||
|
Balance of cash and cash equivalents at end of period
|
E
|
99
|
1,710
|
1,809
|
||||||||||||
|
Restricted cash balance at end of period
|
E
|
85,981
|
(85,981
|
)
|
-
|
|||||||||||
|
For the year ended December 31, 2022
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Profit for the year
|
A, B, C
|
50,276
|
18,858
|
69,134
|
||||||||||||
|
Net cash from operating activities
|
62,497
|
-
|
62,497
|
|||||||||||||
|
Net cash provided by (used in) investing activities
|
E
|
(11,226
|
)
|
19,571
|
8,345
|
|||||||||||
|
Net cash used in financing activities
|
(69,934
|
)
|
-
|
(69,934
|
)
|
|||||||||||
|
Net increase (decrease) in cash and cash equivalents
|
(18,663
|
)
|
19,571
|
908
|
||||||||||||
|
Balance of cash and cash equivalents at beginning of year
|
E
|
98
|
180
|
278
|
||||||||||||
|
Restricted cash balance at beginning of year
|
E
|
76,390
|
(76,390
|
)
|
-
|
|||||||||||
|
|
||||||||||||||||
|
Balance of cash and cash equivalents at end of year
|
E
|
145
|
1,041
|
1,186
|
||||||||||||
|
Restricted cash balance at end of year
|
E
|
57,680
|
(57,680
|
)
|
-
|
|||||||||||
|
As at June 30, 2023
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Cash and cash equivalents
|
65
|
6,823
|
6,888
|
|||||||||||||
|
Restricted cash
|
|
9,205
|
(6,823
|
)
|
2,382
|
|||||||||||
|
Property, plant & equipment
|
A, D
|
827,155
|
47,242
|
874,397
|
||||||||||||
|
Intangible assets
|
D
|
27,189
|
(27,189
|
)
|
-
|
|||||||||||
|
Other assets
|
74,925
|
-
|
74,925
|
|||||||||||||
|
Total assets
|
938,539
|
20,053
|
958,592
|
|||||||||||||
|
Accounts payable and deferred expenses
|
A
|
15,468
|
(8,790
|
)
|
6,678
|
|||||||||||
|
Other liabilities
|
420,505
|
560
|
421,065
|
|||||||||||||
|
Total liabilities
|
435,973
|
(8,230
|
)
|
427,743
|
||||||||||||
|
Partners’ equity
|
A
|
502,566
|
28,283
|
530,849
|
||||||||||||
|
Total liabilities and equity
|
938,539
|
20,053
|
958,592
|
|||||||||||||
|
As at June 30, 2022
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Cash and cash equivalents
|
65
|
3,880
|
3,945
|
|||||||||||||
|
Restricted cash
|
4,685
|
(3,880
|
)
|
805
|
||||||||||||
|
Property, plant & equipment
|
A, D
|
851,705
|
39,890
|
891,595
|
||||||||||||
|
Intangible assets
|
D |
|
28,059
|
(28,059
|
)
|
-
|
||||||||||
|
Other assets
|
178,618
|
-
|
178,618
|
|||||||||||||
|
Total assets
|
1,063,132
|
11,831
|
1,074,963
|
|||||||||||||
|
Accounts payable and deferred expenses
|
A
|
42,605
|
(8,492
|
)
|
34,113
|
|||||||||||
|
Other liabilities
|
641,026
|
840
|
641,866
|
|||||||||||||
|
Total liabilities
|
683,631
|
(7,652
|
)
|
675,979
|
||||||||||||
|
Partners’ equity
|
A
|
379,501
|
19,483
|
398,984
|
||||||||||||
|
Total liabilities and equity
|
1,063,132
|
11,831
|
1,074,963
|
|||||||||||||
|
As at December 31, 2022
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Cash and cash equivalents
|
89
|
1,370
|
1,459
|
|||||||||||||
|
Restricted cash
|
10,098
|
(1,370
|
)
|
8,728
|
||||||||||||
|
Property, plant & equipment
|
A, D
|
839,665
|
45,684
|
885,349
|
||||||||||||
|
Intangible assets
|
D
|
27,624
|
(27,624
|
)
|
-
|
|||||||||||
|
Other assets
|
142,274
|
-
|
142,274
|
|||||||||||||
|
Total assets
|
1,019,750
|
18,060
|
1,037,810
|
|||||||||||||
|
Accounts payable and deferred expenses
|
A
|
38,800
|
(6,354
|
)
|
32,446
|
|||||||||||
|
Other liabilities
|
533,630
|
700
|
534,330
|
|||||||||||||
|
Total liabilities
|
572,430
|
(5,654
|
)
|
566,776
|
||||||||||||
|
Partners’ equity
|
A
|
447,320
|
23,714
|
471,034
|
||||||||||||
|
Total liabilities and equity
|
1,019,750
|
18,060
|
1,037,810
|
|||||||||||||
|
For the six-month period ended June 30, 2023
|
||||||||||||||||||||
|
US GAAP
|
IFRS adjustments
|
Adjustments to the Group’s accounting policies*
|
IFRS - according to the Group’s accounting policies
|
|||||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
|||||||||||||||||
|
Revenues
|
150,875
|
-
|
9,389
|
160,264
|
||||||||||||||||
|
Operating expenses
|
A
|
82,293
|
(4,430
|
)
|
9,389
|
87,252
|
||||||||||||||
|
Operating profit
|
68,582
|
4,430
|
-
|
73,012
|
||||||||||||||||
|
Finance expenses
|
B
|
13,350
|
(2,768
|
)
|
-
|
10,582
|
||||||||||||||
|
Profit for the period
|
55,232
|
7,198
|
-
|
62,430
|
||||||||||||||||
|
Other comprehensive income - interest rate swaps
|
B
|
4,014
|
(2,627
|
)
|
-
|
1,387
|
||||||||||||||
|
Comprehensive income for the period
|
59,246
|
4,571
|
-
|
63,817
|
||||||||||||||||
|
For the six-month period ended June 30, 2022
|
||||||||||||||||||||
|
US GAAP
|
IFRS adjustments
|
Adjustments to the Group’s accounting policies*
|
IFRS - according to the Group’s accounting policies
|
|||||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
|||||||||||||||||
|
Revenues
|
195,522
|
-
|
(41,890
|
)
|
153,632
|
|||||||||||||||
|
Operating expenses
|
A
|
163,698
|
(4,160
|
)
|
(41,890
|
)
|
117,648
|
|||||||||||||
|
Operating profit
|
31,824
|
4,160
|
-
|
35,984
|
||||||||||||||||
|
Finance expenses
|
B
|
14,589
|
(3,046
|
)
|
-
|
11,543
|
||||||||||||||
|
Profit for the period
|
17,235
|
7,206
|
-
|
24,441
|
||||||||||||||||
|
Other comprehensive income - interest rate swaps
|
B
|
21,051
|
(2,906
|
)
|
-
|
18,145
|
||||||||||||||
|
Comprehensive income for the period
|
38,286
|
4,300
|
-
|
42,586
|
||||||||||||||||
|
For the three-month period ended June 30, 2023
|
||||||||||||||||||||
|
US GAAP
|
IFRS adjustments
|
Adjustments to the Group’s accounting policies*
|
IFRS - according to the Group’s accounting policies
|
|||||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
|||||||||||||||||
|
Revenues
|
61,780
|
-
|
1,336
|
63,116
|
||||||||||||||||
|
Operating expenses
|
A
|
34,068
|
(2,179
|
)
|
1,336
|
33,225
|
||||||||||||||
|
Operating profit
|
27,712
|
2,179
|
-
|
29,891
|
||||||||||||||||
|
Finance expenses
|
B
|
5,960
|
(1,389
|
)
|
-
|
4,571
|
||||||||||||||
|
Profit for the period
|
21,752
|
3,568
|
-
|
25,320
|
||||||||||||||||
|
Other comprehensive income - interest rate swaps
|
B
|
7,360
|
(1,318
|
)
|
-
|
6,042
|
||||||||||||||
|
Comprehensive income for the period
|
29,112
|
2,250
|
-
|
31,362
|
||||||||||||||||
|
For the three-month period ended June 30, 2022
|
||||||||||||||||||||
|
US GAAP
|
IFRS adjustments
|
Adjustments to the Group’s accounting policies*
|
IFRS - according to the Group’s accounting policies
|
|||||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
|||||||||||||||||
|
Revenues
|
85,682
|
-
|
(29,622
|
)
|
56,060
|
|||||||||||||||
|
Operating expenses
|
A
|
91,159
|
(1,917
|
)
|
(29,622
|
)
|
59,620
|
|||||||||||||
|
Operating loss
|
(5,477
|
)
|
1,917
|
-
|
(3,560
|
)
|
||||||||||||||
|
Finance expenses
|
B
|
7,227
|
(1,558
|
)
|
-
|
5,669
|
||||||||||||||
|
Profit for the period
|
(12,704
|
)
|
3,475
|
-
|
(9,229
|
)
|
||||||||||||||
|
Other comprehensive income - interest rate swaps
|
B
|
4,947
|
(1,488
|
)
|
-
|
3,459
|
||||||||||||||
|
Comprehensive loss for the period
|
(7,757
|
)
|
1,987
|
-
|
(5,770
|
)
|
||||||||||||||
|
For the year ended December 31, 2022
|
||||||||||||||||||||
|
US GAAP
|
IFRS adjustments
|
Adjustments to the Group’s accounting policies*
|
IFRS - according to the Group’s accounting policies
|
|||||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
|||||||||||||||||
|
Revenues
|
450,906
|
-
|
(76,939
|
)
|
373,967
|
|||||||||||||||
|
Operating expenses
|
A
|
345,546
|
(8,251
|
)
|
(76,939
|
)
|
260,356
|
|||||||||||||
|
Operating profit
|
105,360
|
8,251
|
-
|
113,611
|
||||||||||||||||
|
Finance expenses
|
B
|
21,065
|
(6,360
|
)
|
-
|
14,705
|
||||||||||||||
|
Profit for the year
|
84,295
|
14,611
|
-
|
98,906
|
||||||||||||||||
|
Other comprehensive income - interest rate swaps
|
B
|
21,810
|
(6,080
|
)
|
-
|
15,730
|
||||||||||||||
|
Comprehensive income for the year
|
106,105
|
8,531
|
-
|
114,636
|
||||||||||||||||
|
For the six-month period ended June 30, 2023
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Profit for the period
|
A, B
|
55,232
|
7,198
|
62,430
|
||||||||||||
|
Net cash from operating activities
|
98,824
|
-
|
98,824
|
|||||||||||||
|
Net cash provided by (used in) investing activities
|
E
|
(633
|
)
|
9,275
|
8,642
|
|||||||||||
|
Net cash used in financing activities
|
(102,037
|
)
|
-
|
(102,037
|
)
|
|||||||||||
|
Net increase (decrease) in cash and cash equivalents
|
(3,846
|
)
|
9,275
|
5,429
|
||||||||||||
|
Balance of cash and cash equivalents at beginning of period
|
E
|
89
|
1,370
|
1,459
|
||||||||||||
|
Restricted cash balance at beginning of period
|
E
|
38,404
|
(38,404
|
)
|
-
|
|||||||||||
|
Balance of cash and cash equivalents at end of period
|
E
|
65
|
6,823
|
6,888
|
||||||||||||
|
Restricted cash balance at end of period
|
E
|
34,582
|
(34,582
|
)
|
-
|
|||||||||||
|
For the six-month period ended June 30, 2022
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Profit for the period
|
A, B
|
17,235
|
7,206
|
24,441
|
||||||||||||
|
Net cash from operating activities
|
70,885
|
-
|
70,885
|
|||||||||||||
|
Net cash provided by (used in) investing activities
|
E
|
(3,331
|
)
|
29,646
|
26,315
|
|||||||||||
|
Net cash used in financing activities
|
(97,661
|
)
|
-
|
(97,661
|
)
|
|||||||||||
|
Net increase (decrease) in cash and cash equivalents
|
(30,107
|
)
|
29,646
|
(461
|
)
|
|||||||||||
|
Balance of cash and cash equivalents at beginning of period
|
E
|
76
|
4,330
|
4,406
|
||||||||||||
|
Restricted cash balance at beginning of period
|
E
|
72,665
|
(72,665
|
)
|
-
|
|||||||||||
|
Balance of cash and cash equivalents at end of period
|
E
|
65
|
3,880
|
3,945
|
||||||||||||
|
Restricted cash balance at end of period
|
E
|
42,569
|
(42,569
|
)
|
-
|
|||||||||||
|
For the three-month period ended June 30, 2023
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Profit for the period
|
A, B
|
21,752
|
3,568
|
25,320
|
||||||||||||
|
Net cash from operating activities
|
41,687
|
-
|
41,687
|
|||||||||||||
|
Net cash provided by (used in) investing activities
|
E
|
(473
|
)
|
146
|
(327
|
)
|
||||||||||
|
Net cash used in financing activities
|
(35,305
|
)
|
-
|
(35,305
|
)
|
|||||||||||
|
Net increase in cash and cash equivalents
|
5,909
|
146
|
6,055
|
|||||||||||||
|
Balance of cash and cash equivalents at beginning of period
|
E
|
57
|
776
|
833
|
||||||||||||
|
Restricted cash balance at beginning of period
|
E
|
28,681
|
(28,681
|
)
|
-
|
|||||||||||
|
Balance of cash and cash equivalents at end of period
|
E
|
65
|
6,823
|
6,888
|
||||||||||||
|
Restricted cash balance at end of period
|
E
|
34,582
|
(34,582
|
)
|
-
|
|||||||||||
|
For the three-month period ended June 30, 2022
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Loss for the period
|
A, B
|
(12,704
|
)
|
3,475
|
(9,229
|
)
|
||||||||||
|
Net cash from operating activities
|
16,328
|
-
|
16,328
|
|||||||||||||
|
Net cash used in investing activities
|
E
|
(3,227
|
)
|
(59
|
)
|
(3,286
|
)
|
|||||||||
|
Net cash used in financing activities
|
(13,137
|
)
|
-
|
(13,137
|
)
|
|||||||||||
|
Net decrease in cash and cash equivalents
|
(36
|
)
|
(59
|
)
|
(95
|
)
|
||||||||||
|
Balance of cash and cash equivalents at beginning of period
|
E
|
76
|
3,964
|
4,040
|
||||||||||||
|
Restricted cash balance at beginning of period
|
E
|
42,594
|
(42,594
|
)
|
-
|
|||||||||||
|
Balance of cash and cash equivalents at end of period
|
E
|
65
|
3,880
|
3,945
|
||||||||||||
|
Restricted cash balance at end of period
|
E
|
42,569
|
(42,569
|
)
|
-
|
|||||||||||
|
For the year ended December 31, 2022
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Profit for the year
|
A, B
|
84,295
|
14,611
|
98,906
|
||||||||||||
|
Net cash from operating activities
|
140,040
|
-
|
140,040
|
|||||||||||||
|
Net cash provided by (used in) investing activities
|
E
|
(7,323
|
)
|
31,299
|
23,976
|
|||||||||||
|
Net cash used in financing activities
|
(166,965
|
)
|
-
|
(166,965
|
)
|
|||||||||||
|
Net increase (decrease) in cash and cash equivalents
|
(34,248
|
)
|
31,299
|
(2,949
|
)
|
|||||||||||
|
Balance of cash and cash equivalents at beginning of year
|
E
|
78
|
4,330
|
4,408
|
||||||||||||
|
Restricted cash balance at beginning of year
|
E
|
72,663
|
(72,663
|
)
|
-
|
|||||||||||
|
Balance of cash and cash equivalents at end of year
|
E
|
89
|
1,370
|
1,459
|
||||||||||||
|
Restricted cash balance at end of year
|
E
|
38,404
|
(38,404
|
)
|
-
|
|||||||||||
|
As at June 30, 2023
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Cash and cash equivalents
|
100
|
8,328
|
8,428
|
|||||||||||||
|
Restricted cash
|
8,371
|
(8,328
|
)
|
43
|
||||||||||||
|
Property, plant & equipment
|
A, D
|
752,496
|
80,820
|
833,316
|
||||||||||||
|
Intangible assets
|
D
|
53,087
|
(53,087
|
)
|
-
|
|||||||||||
|
Other assets
|
135,796
|
-
|
135,796
|
|||||||||||||
|
Total assets
|
949,850
|
27,733
|
977,583
|
|||||||||||||
|
Accounts payable and deferred expenses
|
A
|
13,486
|
(2,189
|
)
|
11,297
|
|||||||||||
|
Other liabilities
|
496,760
|
(140
|
)
|
496,620
|
||||||||||||
|
Total liabilities
|
510,246
|
(2,329
|
)
|
507,917
|
||||||||||||
|
|
||||||||||||||||
|
Partners’ equity
|
A
|
439,604
|
30,062
|
469,666
|
||||||||||||
|
Total liabilities and equity
|
949,850
|
27,733
|
977,583
|
|||||||||||||
|
As at June 30, 2022
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Cash and cash equivalents
|
99
|
9,081
|
9,180
|
|||||||||||||
|
Restricted cash
|
9,081
|
(9,081
|
)
|
-
|
||||||||||||
|
Property, plant & equipment
|
A, D
|
777,391
|
82,292
|
859,683
|
||||||||||||
|
Intangible assets
|
D
|
56,597
|
(56,597
|
)
|
-
|
|||||||||||
|
Other assets
|
149,952
|
-
|
149,952
|
|||||||||||||
|
Total assets
|
993,120
|
25,695
|
1,018,815
|
|||||||||||||
|
Accounts payable and deferred expenses
|
A
|
24,490
|
(1,313
|
)
|
23,177
|
|||||||||||
|
Other liabilities
|
645,301
|
(210
|
)
|
645,091
|
||||||||||||
|
Total liabilities
|
669,791
|
(1,523
|
)
|
668,268
|
||||||||||||
|
Partners’ equity
|
A
|
323,329
|
27,218
|
350,547
|
||||||||||||
|
Total liabilities and equity
|
993,120
|
25,695
|
1,018,815
|
|||||||||||||
|
As at December 31, 2022
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Cash and cash equivalents
|
90
|
40,230
|
40,320
|
|||||||||||||
|
Restricted cash
|
42,251
|
(40,230
|
)
|
2,021
|
||||||||||||
|
Property, plant & equipment
|
A, D
|
764,996
|
81,413
|
846,409
|
||||||||||||
|
Intangible assets
|
D
|
54,842
|
(54,842
|
)
|
-
|
|||||||||||
|
Other assets
|
134,217
|
-
|
134,217
|
|||||||||||||
|
Total assets
|
996,396
|
26,571
|
1,022,967
|
|||||||||||||
|
Accounts payable and deferred expenses
|
A
|
21,025
|
(1,857
|
)
|
19,168
|
|||||||||||
|
Other liabilities
|
605,364
|
(175
|
)
|
605,189
|
||||||||||||
|
Total liabilities
|
626,389
|
(2,032
|
)
|
624,357
|
||||||||||||
|
Partners’ equity
|
A
|
370,007
|
28,603
|
398,610
|
||||||||||||
|
Total liabilities and equity
|
996,396
|
26,571
|
1,022,967
|
|||||||||||||
|
For the six-month period ended June 30, 2023
|
||||||||||||||||||||
|
US GAAP
|
IFRS adjustments
|
Adjustments to the Group’s accounting policies*
|
IFRS - according to the Group’s accounting policies
|
|||||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
|||||||||||||||||
|
Revenues
|
186,658
|
1,838
|
5,309
|
193,805
|
||||||||||||||||
|
Operating expenses
|
A
|
93,402
|
(4,298
|
)
|
5,309
|
94,413
|
||||||||||||||
|
Depreciation and amortization
|
A
|
14,415
|
2,804
|
-
|
17,219
|
|||||||||||||||
|
Operating profit
|
78,841
|
3,332
|
-
|
82,173
|
||||||||||||||||
|
Finance expenses
|
B
|
12,677
|
(2,885
|
)
|
-
|
9,792
|
||||||||||||||
|
Profit for the period
|
66,164
|
6,217
|
-
|
72,381
|
||||||||||||||||
|
Other comprehensive income (loss) - interest rate swaps
|
B
|
3,433
|
(4,758
|
)
|
-
|
(1,325
|
)
|
|||||||||||||
|
Comprehensive income for the period
|
69,597
|
1,459
|
-
|
71,056
|
||||||||||||||||
|
For the six-month period ended June 30, 2022
|
||||||||||||||||||||
|
US GAAP
|
IFRS adjustments
|
Adjustments to the Group’s accounting policies*
|
IFRS - according to the Group’s accounting policies
|
|||||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
|||||||||||||||||
|
Revenues
|
213,826
|
-
|
19,710
|
233,536
|
||||||||||||||||
|
Operating expenses
|
A
|
185,593
|
(3,236
|
)
|
19,710
|
202,067
|
||||||||||||||
|
Depreciation and amortization
|
A
|
14,400
|
1,797
|
-
|
16,197
|
|||||||||||||||
|
Operating profit
|
13,833
|
1,439
|
-
|
15,272
|
||||||||||||||||
|
Finance expenses
|
B
|
14,058
|
(3,298
|
)
|
-
|
10,760
|
||||||||||||||
|
Profit (loss) for the period
|
(225
|
)
|
4,737
|
-
|
4,512
|
|||||||||||||||
|
Other comprehensive income - interest rate swaps
|
B
|
20,811
|
(3,333
|
)
|
-
|
17,478
|
||||||||||||||
|
Comprehensive income for the period
|
20,586
|
1,404
|
-
|
21,990
|
||||||||||||||||
|
For the three-month period ended June 30, 2023
|
||||||||||||||||||||
|
US GAAP
|
IFRS adjustments
|
Adjustments to the Group’s accounting policies*
|
IFRS - according to the Group’s accounting policies
|
|||||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
|||||||||||||||||
|
Revenues
|
|
72,772
|
1,838
|
6,805
|
81,415
|
|||||||||||||||
|
Operating expenses
|
A
|
36,852
|
(2,189
|
)
|
6,805
|
41,468
|
||||||||||||||
|
Depreciation and amortization
|
A
|
7,206
|
1,402
|
-
|
8,608
|
|||||||||||||||
|
Operating profit
|
28,714
|
2,625
|
-
|
31,339
|
||||||||||||||||
|
Finance expenses
|
B
|
6,007
|
(1,495
|
)
|
-
|
4,512
|
||||||||||||||
|
Profit for the period
|
22,707
|
4,120
|
-
|
26,827
|
||||||||||||||||
|
Other comprehensive income - interest rate swaps
|
B
|
7,399
|
(3,351
|
)
|
-
|
4,048
|
||||||||||||||
|
Comprehensive income for the period
|
30,106
|
769
|
-
|
30,875
|
||||||||||||||||
|
For the three-month period ended June 30, 2022
|
||||||||||||||||||||
|
US GAAP
|
IFRS adjustments
|
Adjustments to the Group’s accounting policies*
|
IFRS - according to the Group’s accounting policies
|
|||||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
|||||||||||||||||
|
Revenues
|
|
67,834
|
-
|
10,989
|
78,823
|
|||||||||||||||
|
Operating expenses
|
A
|
63,249
|
(1,313
|
)
|
10,989
|
72,925
|
||||||||||||||
|
Depreciation and amortization
|
A
|
7,208
|
1,150
|
-
|
8,358
|
|||||||||||||||
|
Operating loss
|
(2,623
|
)
|
163
|
-
|
(2,460
|
)
|
||||||||||||||
|
Finance expenses
|
B
|
7,089
|
(1,619
|
)
|
-
|
5,470
|
||||||||||||||
|
Loss for the period
|
(9,712
|
)
|
1,782
|
-
|
(7,930
|
)
|
||||||||||||||
|
Other comprehensive income - interest rate swaps
|
B
|
5,008
|
(1,637
|
)
|
-
|
3,371
|
||||||||||||||
|
Comprehensive loss for the period
|
(4,704
|
)
|
145
|
-
|
(4,559
|
)
|
||||||||||||||
|
For the year ended December 31, 2022
|
||||||||||||||||||||
|
US GAAP
|
IFRS adjustments
|
Adjustments to the Group’s accounting policies*
|
IFRS - according to the Group’s accounting policies
|
|||||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
|||||||||||||||||
|
Revenues
|
|
445,028
|
-
|
49,637
|
494,665
|
|||||||||||||||
|
Operating expenses
|
A
|
349,588
|
(7,460
|
)
|
49,637
|
391,765
|
||||||||||||||
|
Depreciation and amortization
|
A
|
28,815
|
4,602
|
-
|
33,417
|
|||||||||||||||
|
Operating profit
|
66,625
|
2,858
|
-
|
69,483
|
||||||||||||||||
|
Finance expenses
|
B
|
28,645
|
(6,597
|
)
|
-
|
22,048
|
||||||||||||||
|
Profit for the year
|
37,980
|
9,455
|
-
|
47,435
|
||||||||||||||||
|
Other comprehensive income - interest rate swaps
|
B
|
29,284
|
(6,667
|
)
|
-
|
22,617
|
||||||||||||||
|
Comprehensive income for the year
|
67,264
|
2,788
|
-
|
70,052
|
||||||||||||||||
|
For the six-month period ended June 30, 2023
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Profit for the period
|
A, B
|
66,164
|
6,217
|
72,381
|
||||||||||||
|
Net cash from operating activities
|
54,710
|
-
|
54,710
|
|||||||||||||
|
Net cash from investing activities
|
E
|
(75
|
)
|
29,267
|
29,192
|
|||||||||||
|
Net cash used in financing activities
|
(115,794
|
)
|
-
|
(115,794
|
)
|
|||||||||||
|
Net increase (decrease) in cash and cash equivalents
|
(61,159
|
)
|
29,267
|
(31,892
|
)
|
|||||||||||
|
Balance of cash and cash equivalents at beginning of period
|
E
|
90
|
40,230
|
40,320
|
||||||||||||
|
Restricted cash balance at beginning of period
|
E
|
119,838
|
(119,838
|
)
|
-
|
|||||||||||
|
Balance of cash and cash equivalents at end of period
|
E
|
100
|
8,328
|
8,428
|
||||||||||||
|
Restricted cash balance at end of period
|
E
|
58,669
|
(58,669
|
)
|
-
|
|||||||||||
|
For the six-month period ended June 30, 2022
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Profit (loss) for the period
|
A, B
|
(225
|
)
|
4,737
|
4,512
|
|||||||||||
|
Net cash from operating activities
|
8,760
|
-
|
8,760
|
|||||||||||||
|
Net cash used in investing activities
|
E
|
(255
|
)
|
(322
|
)
|
(577
|
)
|
|||||||||
|
Net cash used in financing activities
|
(454
|
)
|
-
|
(454
|
)
|
|||||||||||
|
Net increase (decrease) in cash and cash equivalents
|
8,051
|
(322
|
)
|
7,729
|
||||||||||||
|
Balance of cash and cash equivalents at beginning of period
|
E
|
100
|
1,351
|
1,451
|
||||||||||||
|
Restricted cash balance at beginning of period
|
E
|
78,410
|
(78,410
|
)
|
-
|
|||||||||||
|
Balance of cash and cash equivalents at end of period
|
E
|
99
|
9,081
|
9,180
|
||||||||||||
|
Restricted cash balance at end of period
|
E
|
86,462
|
(86,462
|
)
|
-
|
|||||||||||
|
For the three-month period ended June 30, 2023
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Profit for the period
|
A, B
|
22,707
|
4,120
|
26,827
|
||||||||||||
|
Net cash from operating activities
|
22,267
|
-
|
22,267
|
|||||||||||||
|
Net cash from investing activities
|
E
|
(75
|
)
|
25,073
|
24,998
|
|||||||||||
|
Net cash used in financing activities
|
(49,815
|
)
|
-
|
(49,815
|
)
|
|||||||||||
|
Net increase (decrease) in cash and cash equivalents
|
(27,623
|
)
|
25,073
|
(2,550
|
)
|
|||||||||||
|
Balance of cash and cash equivalents at beginning of period
|
E
|
100
|
10,878
|
10,978
|
||||||||||||
|
Restricted cash balance at beginning of period
|
E
|
86,292
|
(86,292
|
)
|
-
|
|||||||||||
|
Balance of cash and cash equivalents at end of period
|
E
|
100
|
8,328
|
8,428
|
||||||||||||
|
Restricted cash balance at end of period
|
E
|
58,669
|
(58,669
|
)
|
-
|
|||||||||||
|
For the three-month period ended June 30, 2022
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Loss for the period
|
A, B
|
(9,712
|
)
|
1,782
|
(7,930
|
)
|
||||||||||
|
Net cash used in operating activities
|
(19,250
|
)
|
-
|
(19,250
|
)
|
|||||||||||
|
Net cash used in investing activities
|
E
|
(73
|
)
|
(52
|
)
|
(125
|
)
|
|||||||||
|
Net cash used in financing activities
|
9,602
|
-
|
9,602
|
|||||||||||||
|
Net increase (decrease) in cash and cash equivalents
|
(9,721
|
)
|
(52
|
)
|
(9,773
|
)
|
||||||||||
|
Balance of cash and cash equivalents at beginning of period
|
E
|
100
|
18,853
|
18,953
|
||||||||||||
|
Restricted cash balance at beginning of period
|
E
|
96,182
|
(96,182
|
)
|
-
|
|||||||||||
|
Balance of cash and cash equivalents at end of period
|
E
|
99
|
9,081
|
9,180
|
||||||||||||
|
Restricted cash balance at end of period
|
E
|
86,462
|
(86,462
|
)
|
-
|
|||||||||||
|
For the year ended December 31, 2022
|
||||||||||||||||
|
US GAAP
|
Adjustments
|
IFRS
|
||||||||||||||
|
In USD thousand
|
In USD thousand
|
In USD thousand
|
||||||||||||||
|
Profit for the year
|
A, B
|
37,980
|
9,455
|
47,435
|
||||||||||||
|
Net cash from operating activities
|
78,126
|
-
|
78,126
|
|||||||||||||
|
Net cash used in investing activities
|
E
|
(519
|
)
|
(2,548
|
)
|
(3,067
|
)
|
|||||||||
|
Net cash used in financing activities
|
(36,189
|
)
|
-
|
(36,189
|
)
|
|||||||||||
|
Net increase (decrease) in cash and cash equivalents
|
41,418
|
(2,548
|
)
|
38,870
|
||||||||||||
|
Balance of cash and cash equivalents at beginning of year
|
E
|
100
|
1,350
|
1,450
|
||||||||||||
|
Restricted cash balance at beginning of year
|
E
|
78,410
|
(78,410
|
)
|
-
|
|||||||||||
|
Balance of cash and cash equivalents at end of year
|
E
|
90
|
40,230
|
40,320
|
||||||||||||
|
Restricted cash balance at end of year
|
E
|
119,838
|
(119,838
|
)
|
-
|
|||||||||||
| A. |
Maintenance costs under the Long Term Maintenance Plan (hereinafter - the “LTPC Agreement”): under IFRS, variable payments which were paid in accordance with the milestones as set in the LTPC Agreement are capitalized to the cost of
property, plant and equipment and amortized over the period from the date on which maintenance work was carried out until the date on which maintenance work is due to take place again. Under US GAAP, the said payments are recognized on
payment date within current expenses in the statement of income.
|
| B. |
Hedge effectiveness of interest rate swaps: in accordance with the IFRS - the associates recognize adjustments relating to the ineffective portion of their cash flow hedge under finance expenses in profit and loss. Under US GAAP,
there is no part which is not effective, and the hedging results are recognized in full in other comprehensive income.
|
| C. |
Impairment of property, plant and equipment in Valley: In 2021, prior to the acquisition date of CPV Group, indications of impairment of the property, plant and equipment were identified. Under IFRS, the carrying amount exceeded the
recoverable amount (the discounted cash flows that Valley expects to generate from the asset), and consequently an impairment loss was recognized. Under US GAAP, the non-discounted cash flows that Valley expects to generate from the
asset exceeded the carrying amount, and therefore no impairment loss was recognized. Since the impairment loss was taken into account as part of the excess cost allocation work as of the acquisition date of CPV Group, its subsequent
reversal in Valley’s financial statements, if recognized, shall not affect the Company's results.
|
| D. |
Intangible assets: Under IFRS, certain intangible assets are defined as property, plant and equipment.
|
| E. |
Restricted cash: Restricted cash: There is a difference between the presentation and classification of restricted cash in the cash flow statements and in the statements of financial position.
|