Enlight Renewable Energy Ltd. Q3 FY2024 earnings call

Key Points

• Strong financial results for Q3 2024 and first nine months, with revenue and Adjusted EBITDA growth.
• Increased 2024 guidance ranges for revenue and Adjusted EBITDA.
• Expansion plans: global generation and energy storage capacity to triple by 2027, reaching 6 gigawatt generation and 7.6 gigawatt hour energy storage.
• Demand for electricity in the US driven by data centers, AI, and electric vehicles, leading to high PPA prices.
• Specific project updates: Atrisco solar and energy storage project in New Mexico achieved COD, new projects under construction in the US, and Snowflake A PPA signed in Arizona.

For the nine months ended 2024, revenue grew 56% to $285 million, Adjusted EBITDA grew 50% to $214 million. In the third quarter of 2024, revenue was up 88% to $109 million, Adjusted EBITDA grew 86% to $88 million. European projects saw revenue up 24% yoy; MENA region revenue up 223% yoy. During the past nine months, Enlight added 500 megawatt of new generation capacity and 1.5 gigawatt hour of new energy storage capacity to its operational portfolio, with expectations of future revenue and EBITDA contributions from new projects in the US and other regions.

Guidance

• Raised 2024 revenue guidance to $355 million to $370 million from $345 million to $360 million previously.
• Raised 2024 Adjusted EBITDA guidance to $255 million to $270 million from $245 million to $260 million previously.
• Expect global generation and energy storage capacity to triple by 2027, reaching 6 gigawatt generation and 7.6 gigawatt hour energy storage.

Risks

• Potential changes in future regulations on tariffs and tax incentives which may impact electricity prices and project returns.
• Interconnection challenges for some projects, such as delays in the CO Bar project due to APS interconnection reform process.

Q: Justin Clare asked about safe harboring projects and the impact of potential changes in US administration on projects, as well as details on the CO Bar project delay, APS interconnection reform, and Snowflake's interconnection status.

A: Gilad and Adam responded that they are safe harboring projects, have experience in navigating different administrations, explained the CO Bar project delay due to complex interconnection with multiple utilities and Snowflake's advanced interconnection status with an LGA already in hand.

Q: Jack Hurley inquired about PPA flexibility if interest rates rise or incentives are removed, and equity needs for Snowflake.

A: Gilad stated they have a track record of amending PPAs for external developments, and Nir mentioned Snowflake is in a strong position for financing with a good equity ticket due to strong project fundamentals.

Q: David Paz asked about US EBITDA growth by 2027 and inclusion of Siemens compensation in EBITDA.

A: Gilad indicated US EBITDA will be a significant portion of the company's growth, and Nir explained that Siemens compensation is included in EBITDA as part of the company's earnings sources.

Q: Michael Strouse asked about development portfolio past 2027 and PJM market.

A: Gilad discussed the company's 30 factored gigawatts portfolio, with a deep pipeline of projects in various development phases, and Adam mentioned focus on pushing development forward in PJM market while addressing challenges there