Q2 and Recent Highlights
Kenon
In June 2024, Kenon sold 5 million ZIM shares for total consideration of $111 million. Following the sale, Kenon remains the single largest shareholder in ZIM.
Also in June 2024, Kenon entered into a collar transaction with an investment bank relating to an additional 5 million ZIM shares owned by Kenon.
In September 2024, Kenon's board of directors authorized an increase in its share repurchase plan by $10 million to up to $60 million (including shares already purchased under the plan), and Kenon has entered into a mandate for repurchases under the plan of up to $30 million through March 31, 2025.
OPC
In July 2024, OPC raised proceeds of NIS 800 million (approximately $220 million) in a share offering. Kenon participated in the offering for a total investment of approximately NIS 428 million (approximately $120 million) and now holds 54.5% of OPC's shares.
In August 2024, OPC announced agreements pursuant to which Harrison Street, a U.S. private equity infrastructure fund, has agreed to invest $300 million in CPV Renewable Power LP ("CPV Renewable"), a wholly-owned subsidiary of CPV Group LP ("CPV"), for 33.33% of the ordinary equity interests in CPV Renewable.
In July 2024, OPC announced that capacity price for power plants of CPV in the PJM market was set at $269.92/MW-day, a significant increase compared to the prior price.
Financial results:
OPC reported net loss in Q2 2024 of $7 million, as compared to $11 million in Q2 2023. OPC's Q2 2024 and Q2 2023 net loss included share in profit of CPV of $4 million in the respective periods.
OPC reported Adjusted EBITDA (including proportionate share in EBITDA of associated companies)[1] in Q2 2024 of $66 million, as compared to $47 million in Q2 2023.
ZIM
In August 2024, ZIM announced a cash dividendof $0.93 per share, or approximately $112 million in the aggregate, of which approximately $15 million (approximately $14 million net of tax) is payable to Kenon.
Financial results[2]:
ZIM reported a net profit in Q2 2024 of $373 million, as compared to net loss of $213 million in Q2 2023.
ZIM reported Adjusted EBITDA1 in Q2 2024 of $766 million, as compared to $275 million in Q2 2023.
Discussion of Results for the Three Months ended June 30, 2024
Kenon's consolidated results of operations from its operating companies essentially comprise the consolidated results of OPC Energy Ltd ("OPC"). Our share of the results of ZIM Integrated Shipping Ltd. ("ZIM") are reflected under results from associated companies.
See Exhibit 99.2 of Kenon's Form 6-K dated September 9, 2024 for a summary of Kenon's consolidated financial information; a summary of OPC's consolidated financial information; a reconciliation of OPC's Adjusted EBITDA (including proportionate share in Adjusted EBITDA of associated companies) (which is a non-IFRS measure) to profit/(loss); a summary of financial information of OPC's subsidiaries; and a reconciliation of ZIM's Adjusted EBITDA (which is a non-IFRS measure) to profit/(loss) for the period.
OPC
The following discussion of OPC's results of operations is derived from OPC's consolidated financial statements, as translated into US dollars.
Summary Financial Information of OPC
For the three months ended
June 30,
2024
2023
$ millions
Revenue
181
165
Cost of sales (excluding depreciation and amortization)
(129)
(129)
Finance expenses, net
(23)
(16)
Share in profit of associated companies, net
4
4
Loss for the period
(7)
(11)
Attributable to:
Equity holders of OPC
(4)
(6)
Non-controlling interest
(3)
(5)
Adjusted EBITDA (including proportionate share in Adjusted EBITDA of associated companies)[3]
66
47
For details of OPC's results by segment, please refer to Appendix A.
OPC's Revenue by Geography
For the three months ended
June 30,
2024
2023
$ millions
Israel
146
147
U.S.
35
18
Total
181
165
OPC's revenue increased by $16 million in Q2 2024 as compared to Q2 2023. Excluding the impact of translating OPC's revenue from NIS to USD[4], OPC's revenue increased by $19 million in Q2 2024 as compared to Q2 2023.
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, 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 Q2 2024 was NIS 30.07 per KW hour, which is approximately 1% lower than the weighted-average generation component tariff in Q2 2023 of NIS 30.39 per KW hour.
Set forth below is a discussion of significant changes in OPC's revenue between Q2 2024 and Q2 2023.
Revenue from sale of energy to the System Operator and to other suppliers – Such revenues increased by $5 million in Q2 2024 as compared to Q2 2023 primarily due to the consolidation of results of the Tzomet Power Plant which was consolidated at the end of Q2 2023;
Revenue from availability payments – Such revenues increased by $11 million in Q2 2024 as compared to Q2 2023, primarily as a result of the commencement of commercial operations of the Tzomet Power Plant at the end of Q2 2023;
Other revenue – Such revenues decreased by $5 million in Q2 2024 as compared to Q2 2023 primarily due to the sale of electricity prior to commercial operation of Tzomet Power Plant in Q2 2023; and
Revenue from sale of renewable energy in U.S. – Such revenues increased by
