Ellomay Capital Reports Results for the Three and Six Months Ended June 30, 2016

TEL AVIV, Israel, Sept. 18, 2016

Financial Highlights

• Revenues were approximately $6.5 million (approximately €5.8 million) for the six months ended June 30, 2016, compared to approximately $7.2 million (approximately €6.5 million) for the six months ended June 30, 2015. The decrease in revenues is mainly a result of relatively lower radiation levels during the six months ended June 30, 2016 compared to the six month period ended June 30, 2015, as 2015 was characterized by high levels of radiation.
• Operating expenses were approximately $1.2 million (approximately €1 million) for the six months ended June 30, 2016, compared to approximately $1.5 million (approximately €1.3 million) for the six months ended June 30, 2015. The decrease in operating expenses is mainly attributable to lower expenses under O&M agreements and reduction of the municipal tax paid by the Company's Italian subsidiaries. Depreciation expenses were approximately $2.5 million (approximately €2.2 million) for each of the six months ended June 30, 2016 and June 30, 2015.
• General and administrative expenses were approximately $1.8 million for the six months ended June 30, 2016, compared to approximately $1.7 million for the six months ended June 30, 2015. During the six months ended June 30, 2016 the Company invested approximately $0.6 million in the Pumped Storage project in the Manara Cliff in Israel (the "Manara PSP"), an amount that was recorded in the general and administrative expenses. The increase in general and administrative expenses in connection with the Manara PSP was partially offset by a decrease in other consulting expenses and reduced labor costs following the termination of employment of one of the Company's senior employees.
• Company's share of profits of investee accounted for at equity, after elimination of intercompany transactions, was approximately $0.3 million for the six months ended June 30, 2016, compared to approximately $0.2 million in the six months ended June 30, 2015.
• Financing expenses, net was approximately $2.8 million for the six months ended June 30, 2016, compared to financing income, net of approximately $1.3 million for the six months ended June 30, 2015. The change in financing expenses was mainly due to the reevaluation of the Company's EUR/USD forward transactions and interest rate swap transactions in the aggregate amount of approximately $5.3 million income during the six months ended June 30, 2015 compared to an approximately $1 million loss during the six months ended June 30, 2016, partially offset by income resulting from exchange rate differences in the amount of approximately $2.3 million.
• Taxes on income were approximately $0.3 million for the six months ended June 30, 2016, compared to approximately $0.6 million for the six months ended June 30, 2015. This decrease in taxes on income compared to the corresponding period in 2015 resulted mainly from utilization of loss carried forwards due to tax benefits initially recognized as at the end of 2015.
• Net loss was approximately $1.7 million for the six months ended June 30, 2016, compared to net income of approximately $2.6 million for the six months ended June 30, 2015.
• Total other comprehensive income was approximately $1.7 million for the six months ended June 30, 2016, compared to other comprehensive losses of approximately $4.8 million for the six months ended June 30, 2015. The change was mainly due to presentation currency translation adjustments as a result of fluctuations in the Euro/USD exchange rates.
• Total comprehensive income was approximately $0.1 million for the six months ended June 30, 2016, compared to a loss of approximately $2.2 million for the six months ended June 30, 2015.
• EBITDA was approximately $3.9 million for the six months ended June 30, 2016 compared to approximately $4.3 million for the six months ended June 30, 2015, respectively. The decrease in EBITDA is mainly due to the decrease in revenues resulting from relatively lower radiation levels, partially offset by decreased operational costs due to operational streamlining.
• Net cash provided by operating activities was approximately $0.6 million for the six months ended June 30, 2016 compared to approximately $1.7 million for the six months ended June 30, 2015, respectively. The decrease in net cash provided by operating activities is mainly attributable to proceeds from settlement of derivatives in the amount of approximately $0.5 million and a VAT refund received by one of the Company's Spanish subsidiaries during the six month period ended June 30, 2015 amounting to approximately $0.6 million, and increased expenditure in connection with the Company's pumped storage plant in the Manara Cliff during the six month period ended June 30, 2016.
• In August 2016, Ellomay Pumped Storage (2014) Ltd., a 75% owned subsidiary of the Company, received a conditional license for the Manara PSP from the Israeli Minister of National Infrastructures, Energy and Water Resources (the "Conditional License"). The Conditional License regulates the construction of a pumped storage plant in the Manara Cliff with a capacity of 340 MW. The Conditional License includes several conditions precedent to the entitlement of the holder of the Conditional License to receive an electricity production license.
• In August 2016, the Company entered into a strategic agreement (the "Agreement") with Ludan Energy Overseas B.V. ("Ludan"), a wholly-owned subsidiary of Ludan Engineering Co. Ltd. (TASE: LUDN), in connection with Waste-to-Energy (specifically Gasification and Bio-Gas (anaerobic digestion) projects in the Netherlands. Pursuant to the Agreement, subject to the fulfillment of certain conditions (including the financial closing of each project and receipt of a valid Sustainable Energy Production Incentive subsidy from the Dutch authorities and applicable licenses), the Company will acquire at least 51% of each project company and Ludan will own the remaining 49%. The expected overall cost of the projects is approximately EUR 200 million (including project financing). The Agreement may be terminated, inter alia, in the event the parties will not reach an understanding as to the contents of the EPC and O&M contracts within sixty days following the financial closing of the first project.

As of September 1, 2016, the Company held approximately $24.8 million in cash and cash equivalents, approximately $5.6 in marketable securities and approximately $6 million in short-term and long-term restricted cash.

Ran Fridrich, CEO and a board member of Ellomay commented: "Ellomay continues to maintain a stable operating profit and keeps improving its operational parameters. We recently executed the agreement with Ludan, which is expected to provide us with an entry point into the Netherlands Waste-to-Energy market and received a conditional license for the Manara Cliff pumped-storage project, both positive events that are expected to expand our operations in the renewable and clean energy market."

Information for the Company's Series A Debenture Holders

As of June 30, 2016, the Company's Net Financial Debt (as such term is defined in the Series A Debentures Deed of Trust) was approximately $18.2 million (consisting of approximately $19.3 million of short-term and long-term debt from banks and other interest bearing financial obligations and approximately $40.6 million in connection with the Series A Debentures issuances (in January and June 2014), net of approximately $22.2 million of cash and cash equivalents and marketable securities and net of approximately $19.5 million of project finance and related hedging transactions of the Company's subsidiaries).

Use of NON-IFRS Financial Measures