OPC
The following discussion of OPC's results of operations is derived from OPC's consolidated financial statements, which are denominated in NIS for purposes of OPC's financial statements, as translated into US dollars for Kenon's financial statements.
| Summary Financial Information of OPC | ||||||||
| For the year ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| $ millions | ||||||||
| Revenue | 692 | 574 | ||||||
| Cost of sales (excluding depreciation and amortization) | (494) | (417) | ||||||
| Finance expenses, net | (53) | (14) | ||||||
| Share in profit of associated companies, net | 66 | 85 | ||||||
| Profit for the period | 47 | 65 | ||||||
| Attributable to: | ||||||||
| Equity holders of OPC | 40 | 50 | ||||||
| Non-controlling interest | 7 | 15 | ||||||
| Adjusted EBITDA3 | 304 | 250 | ||||||
| For details of OPC's results please refer to Appendix B. | ||||||||
| Revenue | ||||||||
| For the year ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| $ millions | ||||||||
| Israel | 619 | 517 | ||||||
| U.S. | 73 | 57 | ||||||
| Total | 692 | 574 | ||||||
OPC's revenue increased by $118 million in 2023 as compared to 2022. Excluding the impact of translating OPC's revenue from NIS to USD4, OPC's revenue increased by $169 million in 2023 as compared to 2022. Set forth below is a discussion of significant changes in revenue between 2023 and 2022.
OPC's revenue from the sale of electricity to private customers is derived from electricity sold at the generation component tariffs, as published by the Israeli Electricity Authority ("EA"), with some discount. Accordingly, changes in the generation component tariffs generally affect the prices paid by customers under Power Purchase Agreements of OPC-Rotem and OPC-Hadera. The weighted-average generation component tariff in 2023 was NIS 30.53 per KW hour, which is approximately 4% higher than the weighted-average generation component tariff in 2022 of NIS 29.27 per KW hour.
Set forth below is a discussion of changes in the key components in revenue for 2023 as compared to 2022.
- Revenue from sale of energy to private customers in Israel – Increased by $25 million in 2023 as compared to 2022. Excluding the impact of translating OPC's revenue from NIS to USD, such revenues increased by $57 million primarily as a result of (i) an increase of $49 million from an increase in customer consumption and (ii) an increase of $24 million from the consolidation of results of the Gat Power Plant which was consolidated starting in Q2 2023, partially offset by (iii) a decrease of $9 million as a result of the change in demand hour brackets;
- Revenue from private customers in respect of infrastructure services – Increased by $36 million in 2023 as compared to 2022. Excluding the impact of translating OPC's revenue from NIS to USD, such revenues increased by $45 million, primarily as a result of (i) an increase of $26 million from an increase in the infrastructure tariff, (ii) an increase of $12 million from an increase in customer consumption and (iii) an increase of $8 million from the consolidation of results of the Gat Power Plant beginning in Q2 2023;
- Revenue from sale of energy to the System Operator and to other suppliers – Increased by $16 million in 2023 as compared to 2022. Excluding the impact of translating OPC's revenue from NIS to USD, such revenues increased by $18 million, primarily as a result of (i) an increase of $18 million from the commencement of commercial operations of Tzomet Power Plant in June 2023 and (ii) an increase of $4 million from the consolidation of results of the Gat Power Plant beginning in Q2 2023;
- Revenue from capacity payments – Increased by $16 million in 2023 as compared to 2022, primarily as a result of the commencement of commercial operations of Tzomet Power Plant in June 2023; and
- Other revenue – Increased by $5 million in 2023 as compared to 2022, primarily as a result of the commencement of commercial operations of Tzomet Power Plant in June 2023.
| Cost of Sales (Excluding Depreciation and Amortization) | ||||||||
| For the year ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| $ millions | ||||||||
| Israel | 453 | 385 | ||||||
| U.S. | 41 | 32 | ||||||
| Total | 494 | 417 | ||||||
OPC's cost of sales (excluding depreciation and amortization) increased by $77 million from 2022 to 2023. Excluding the impact of translating OPC's cost of sales (excluding depreciation and amortization) from NIS to USD5, OPC's cost of sales (excluding depreciation and amortization) increased by $115 million in 2023 as compared to 2022. Set forth below is a discussion of significant changes in cost of sales between 2023 and 2022.
- Natural gas and diesel oil consumption in Israel – Increased by $23 million in 2023 as compared to 2022. Excluding the impact of translating these costs from NIS to USD, such costs increased by $37 million primarily due to (i) an increase of $11 million from the consolidation of results of the Gat Power Plant beginning in Q2 2023, (ii) the commencement of commercial operations of Tzomet Power Plant in June 2023, (iii) an increase of $14 million due to an increase in the generation component and the USD/NIS exchange rate and (iv) an increase of $14 million as a result of an increase in the quantity of gas consumed, partially offset by (v) a decrease in gas expenses of $14 million as a result of the commencement of delivery of gas from Energean from Q2 2023;
- Expenses for infrastructure services in Israel – Increased by $36 million in 2023 as compared to 2022. Excluding the impact of translating these costs from NIS to USD, such costs increased by $45 million primarily as a result of (i) an increase of $26 million linked to the infrastructure tariff, (ii) an increase of $12 million due to an increase in customer consumption and (iii) an increase of $8 million from the consolidation of results of the Gat Power Plant beginning in Q2 2023; and
- Operating expenses and other expenses – Increased by $20 million in 2023 as compared to 2022. Excluding the impact of translating these costs from NIS to USD, such costs increased by $22 million primarily as a result of (i) the commencement of commercial operations of Tzomet Power Plant in June 2023 and (ii) consolidation of results of the Gat Power Plant beginning in Q2 2023.