Enlight Renewable Energy Ltd.

Good day and thank you for standing by. Welcome to the Enlight First Quarter 2023 earnings call and webcast. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be the question and answer session. To ask a question during the session, you need to press star 11 on your telephone keypad. You will then hear an automatic message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference has been recorded. I would now like to hand the conference over to our first speaker today, Yosef Lefkowitz. Please go ahead, sir.

Thank you, operator. Good morning, everyone, and thank you for joining our first quarter 2023 earnings conference call for Enlite Renewable Energy. With me this morning are Gilad Yavetz, CEO and co-founder of Enlite, Nir Yehuda, CFO of Enlite, and Jason Ellsworth, CEO and co-founder of Clinera. Gilad will provide some opening remarks and will then turn the call over to Nir for a review of our first quarter results and then to Jason for a review of our U.S. activity. Our executive team will then be available to answer your questions. Certain statements made on the call today, including but not limited to statements regarding business strategy and plans, our project portfolio, market opportunity, and potential growth, completion of development, and the company's future financial and operational results and guidance, including revenue and adjusted EBITDA, may be forward-looking statements within the meaning of U.S. federal securities laws, which reflect management's best judgment based on currently available information. We reference certain project metrics in this earnings call, and the full information can be found in our earnings release. These statements involve risks and uncertainties that may cause actual results to differ from our expectations. Please refer to our earnings release for more information on the specific factors that could cause actual results to differ materially from our forward-looking statements. Although we believe these expectations are reasonable, we undertake no obligation to revise any statements to reflect changes that occur after this call. Additionally, non-IFRS measures may be discussed on the call. These non-IFRS measures should be considered in addition to and not as a substitute for or in isolation from our results prepared in accordance with IFRS. Reconciliations to the most directly comparable IFRS financial measures are available in the earnings release and the earnings presentation for today's call, which are posted on our investor relations web page. With that, I will turn the call over to Gilad.

Thank you, Seth, and thank you all for joining us today. Enlight delivered record quarterly results in the first quarter, and our strong start to the year gives us further confidence in reiterating our guidance for the year. As a brief reminder for those new to our story, Enlight is a greenfield developer of utility-scale renewable energy projects. We source projects from scratch organically and control the full project lifecycle. As the first pure play utility scale developer to be publicly traded on a national exchange in the U.S., we aim to deliver value to our shareholders by continuing to deliver on our twofold objective, executing on above market project returns and above market growth. Our unique footprint across the U.S., Europe, and Israel provides opportunity in some of the fastest growing renewable markets in the world. We have significant portfolio diversification, not just in geography, but in technology and revenue structure. We are not only in solar, but are also experiencing storage and wind. And we believe we have a cost of capital edge. Now, moving on to our Q1 results. Quarterly revenue grew 103% year-on-year to $71 million. Net income grew 275% year-on-year to 33 million, and adjusted EBITDA grew 118% year-on-year to 54 million, as we continue to benefit from the ramp-up of our operational portfolio, totaling 1.4 gigawatts today. These are record quarterly figures for the group. In comparison to the same period last year, the company added Emeka Baha, to its operational portfolio, totaling 810 new megawatts. These new projects collectively contributed 32 million of revenue. We also benefited this quarter from the indexation of PPAs to our operational portfolio, at an average of 6% year-on-year, which contributed $2 million of quarterly revenue, which is a unique advantage in today's inflationary environment. We are also seeing significant growth in our cash flow generation. The company generated cash flow from operations of $55 million in the first quarter, a growth of 315% year-on-year. We believe this rapid growth is poised to continue at pace over the coming years as we execute on the conversion of our mature project portfolio. By 2025, we expect to reach 4.5 gigawatts and 3.5 gigawatts hour of operational capacity over 3x our current operational capacity. To deliver this growth, we are laser focused on execution. First, regarding our portfolio under construction, the 1 gigawatt and 1.7 gigawatt hour of projects we have under construction are moving ahead as scheduled. I would like to hit on some of the major projects. Apex Solar, our first project in the U.S., is concluding construction and on schedule with a COD anticipated by end of the second quarter 2023. Genesis Wind, the largest renewable energy project in Israel, which we have expanded to 207 megawatts this quarter, is in the midst of commissioning and is on pace to reach COD by the end of the third quarter this year. Atrisco Solar, a 360 megawatt and 1.2 gigawatt hour project in New Mexico, which commenced construction last quarter, has made significant progress. We believe the project is on schedule to reach COD by the end of the second quarter 2024. Moreover, we made significant progress during the first quarter on the project finance package for Atrisco. The company is negotiating arrangements with several lenders to provide both a construction facility exceeding $800 million Permanent back leverage of $380 million and tax equity of $450 million at competitive terms. The banks include some of the largest and most active financial institutions in the renewable sector, highlighting the strength of the project. We are on target to reach financial close before the end of the second quarter and hope to have further details upon closing. In their first full year of operations, APES, Genesis Wind, and Atrisco are expected to contribute $90 million of annual EBITDA in total. Moving to our pre-construction portfolio, totaling 2.1 gigawatts and 1.8 gigawatt hour. The majority of this portfolio is driven by two main projects. One, COBAR, one of the largest solar products in the US, totaling 1.2 gigawatt solar and 824 megawatt-hour storage. And two, Hekama Hybrid, the hybridization of our operational wind farm in Spain with co-located solar and storage. Both projects are moving ahead on schedule. Starting with CO-BAR, in the first quarter, the company contracted an additional 475 megawatts of the cluster. Nearly one gigawatts of the project is now contracted, with the remainder of the solar project expected to be contracted with a different counterparty in the coming months. The first 824 megawatt hour of storage at the site is expected to be contracted in the coming months as well. Jason will elaborate more in his remarks on this unique and strategic project. Hikama Hybrid has received its interconnection and is in the process of permitting now. Once the permit is secured, the project will be largely de-risked, and we will commence procurement of key equipment. Construction is on schedule to commence by the end of the year. If we aggregate the contribution of these two projects in their first full year of operations, Siobar and Hekama Hybrid, we expect to see over $100 million of annual EBITDA. We're also pleased to have further increased the size of our mature project portfolio this quarter by 800 megawatt hours, reflecting the addition of one standalone storage project in Italy and a standalone storage cluster in Israel, both which are expected to reach COD by 2025. We believe that our growth trajectory is clear, and we are poised to deliver not just this iconic project, but also our mature project. We believe we will continue to drive strong execution across our development verticals and project financing. Taking a step back on our IPO roadshow, we emphasize two elements of our strategy, growing faster than the market and delivering project returns that are above market. I've just described the growth strategy we are on. I would now like to spend some more time on returns. We are focused on maintaining the return targets we have set, delivering above-market returns on our project, and we are pleased with the results. This is driven by, one, our Greenfield development expertise, particularly on interconnection, enabling us to secure attractively priced PPAs, and two, game-changing benefits under the IRA. In the first quarter, we successfully amended nearly 500 megawatts of PPAs at an average price increase of 30%. This is in addition to the nearly one gigawatt we amended last year. These price increases are designed to enable us to offset the return compression we have seen from increased capex and financing costs. Our ability to secure price increases is driven by the strategic interconnection position on our projects. Our projects are advanced from an interconnection perspective. As of the date of this release, we have nearly 8.7 gigawatts past system impact study, which we believe is a unique position in the U.S. market. This also puts us in a strong position to negotiate attractive PPA pricing. We signed another 475 megawatts of PPA this quarter at attractive pricing terms. Our portfolio's returns have also uniquely benefited from the inflation reduction act. PTC benefits our U.S. portfolio in significant ways, as it's largely located in the western U.S. location that are perfect for solar. We are also pleased to share more information surrounding our U.S. portfolio's presence in energy communities, according to the latest Treasury guidance under the Inflation Reduction Act. As of the date of this release, we estimate that approximately 25% of our total U.S. portfolio is located in energy zones and is therefore expected to benefit from a 10% ITC or PTC adder. This will further enhance the returns of such projects. We believe our unique portfolio is poised to deliver above market returns despite higher interest rates and the broader inflationary environment. Today, we're pleased to present our funding capabilities, which is informed by the strong growth and return profile of our project portfolio and supported by our strong financial position after the US IPO. We believe we have sufficient equity capital required to complete the mature project portfolio, which includes 4.5 gigawatts of generation and 3.5 gigawatt hour of storage, utilizing existing resources, including cash on hand and distribution generated from our project, all based on our current operating plan and its underlying assumptions. Moreover, we believe we have the financial flexibility to further accelerate our growth thereafter at our stated project deployment guidance of 1.5 gigawatts per year from 2026 based on the current operating plan through a combination of distributions generated from our projects, proceeds from a sale of a minority ownership stake of our projects in the U.S., issuance of unsecured bonds or project refinancing without requiring additional equity financing. In our investor presentation posted to the company's website, we have included additional detail on our financing capabilities. In short, we had an excellent Q1, and we believe that our successful IPO has put us in a unique financial position to capture the massive opportunity we see ahead. I'll hand it off to Nir, who will provide more details on our Q1 performance. Thank you, Gilad. In the first quarter of 23, the company's revenue increased to $71 million, up from $35 million. Year over year, a growth rate of 103%. The growth was mainly driven by the revenue contribution of new operational projects, as well as the inflation indexation embedded in the company's PPA for projects that were already operational last year. In comparison to the same period last year, the company added Emeka Bacha, Hekama, and Biong Bank to its operational portfolio, totaling 810 megawatts. This project collectively contributed 32 million of revenue. The company also benefited from inflation indexation embedded in its PPAs, which contributed an additional 2 million of revenue during the quarter. This reflected an average indexation of 6.3% across 483 megawatts of PPAs. Forty-two percent of the company's operational projects possess PPA with annual inflation indexation, which we believe is an advantage in today's inflationary environment. Finally, the year-over-year increase was also partially driven by the recognition of all proceeds from the sale of electricity by the Haluziot project as revenue, following its reclassification out of financial assets in the second quarter of 22, which contributed an additional $2 million to the revenue in the first quarter of 23. This positive impact, totaling 36 million, were offset by weaker currency exchange rates, particularly between Euro to US dollar, which had a 2 million impact. In the first quarter, the company net income increased to 33 million, up from 9 million year over year, a growth rate of 275%. 40 million of the growth was driven from new projects, The residual growth of $11 million was driven from interest income on deposits as well as foreign exchange impacts threatening U.S. dollar relative to shekel on our cash-on-cash equivalents. Moving on to adjusted EBITDA. In the first quarter of 23, the company adjusted EBITDA more than double to $54 million compared to $25 million for the same period in 22. The increase was driven by the same factor which affected our revenue increase in the same period, offset by $3 million increase in overhead as the team scaled to accommodate rapid growth. The first quarter benefited from higher EBITDA on Project Recama as the vast majority of the production was hedged at high prices. In addition to the above, the company sold 3 million of electricity in projects treated as financial assets in the quarter, which under IFRS we are required to account for as financing income or other non-PNL metrics. Moving to 23 guidance, we are pleased to assume our outlook for 23, including revenue between 290 and 300 million, adjusted EBITDA between 188 and 198 million. I will note that electricity sold by our financial asset is not included in our financial guidance. I will now hand it over to Jason, which will go into detail on some of the key things we are seeing in the U.S.