New Concept Energy, Inc. Reports Fourth Quarter and Full Year 2023 Results

Rhea-AI Summary

New Concept Energy, Inc. (NYSE American: GBR) reported a net loss of $39,000 for Q4 2023 compared to a net income of $11,000 in Q4 2022. For the full year 2023, the company reported a net loss of $21,000 compared to a net income of $181,000 in 2022. Revenues remained stable, with a decline in management fees due to lower oil and gas prices.

Positive

• Stable revenues from rent and managing oil and gas operations.
• Operating expenses for real estate and general administrative expenses increased slightly.
• Interest income saw a slight increase from the previous year.
• Other income in 2022 included gains from investment collection and equipment sale.

Negative

• Significant net loss reported for Q4 and full year 2023 compared to 2022.
• Decrease in management fees due to lower revenue from oil and gas operations.
• Operating expenses and general administrative expenses increased year over year.
• growth in interest income compared to previous year.

Insights

Financial Analyst

The reported financial results of New Concept Energy, Inc. for the fourth quarter and full year of 2023 show a shift from a modest net income in the previous year to a net loss. This transition from profit to loss is noteworthy for investors as it indicates a downturn in the company's profitability. The consistency in rental revenue, with no year-over-year growth, suggests a static market position in the real estate segment. However, the decline in management fees from oil and gas operations, attributed to lower oil and gas prices, reflects the sensitivity of NCE's revenue streams to commodity price fluctuations.

On the expense side, a slight increase in general and administrative expenses could be a concern as it may indicate rising operational costs that are not being offset by revenue growth. The steady operating expenses for real estate properties show controlled costs in that segment. The increase in interest income is a positive note, yet it's not sufficient to counterbalance the revenue shortfall from the core business activities.

Investors may view the absence of 'other income' in 2023, which in 2022 included a one-time gain from an investment collection and equipment sale, as a return to normal operations without exceptional items. This is critical for evaluating the company's sustainable earning potential. The overall financial health of NCE might be questioned due to its inability to maintain profitability and stakeholders might be concerned about the company's future revenue and profit outlook, especially if commodity prices continue to be volatile.

Energy Sector Analyst

The performance of New Concept Energy, Inc. in the energy sector, specifically in managing oil and gas operations, reveals the impact of external market forces on the company's financial outcomes. The reduction in management fees due to the decline in oil and gas prices highlights the company's exposure to market risks associated with the energy sector. This correlation between NCE's fee structure and the underlying commodity prices is important for understanding the company's revenue volatility.

Given the current dynamics of the energy market, with fluctuating oil and gas prices driven by geopolitical tensions, supply chain constraints and global energy transition trends, it is imperative for NCE to adapt its strategy to mitigate these risks. Diversification of revenue streams or hedging strategies could be potential approaches to stabilize income. The company's performance must be carefully monitored against industry benchmarks, as its financial resilience will be tested by its ability to navigate the inherently cyclical nature of the energy sector.

Market Research Analyst

From a market perspective, the reported financials of New Concept Energy, Inc. provide insights into the company's market position and strategic challenges. The stagnant revenue from rental properties may suggest limited growth opportunities in the company's real estate portfolio or a saturated market. The company's dependency on the performance of the oil and gas sector is evident and the reduction in revenue from this segment may concern investors looking for diversified and stable income sources.

Further, the absence of significant 'other income' in 2023 as compared to 2022 could reflect a normalization of financial results, offering a clearer picture of the company's operating performance without the distortion of one-off events. Market participants may scrutinize the company's future projections and strategies, such as potential expansion, cost management and investment in technology, to enhance operational efficiency and generate sustainable growth.

DALLAS--(BUSINESS WIRE)-- New Concept Energy, Inc. (NYSE American: GBR), (the “Company” or “NCE”) a Dallas-based company, today reported Results of Operations for the fourth quarter and the full year ended December 31, 2023.

During the three months ended December 31,2023 the Company reported a net loss of $39,000 compared to net income of $11,000 for the same period ended December 31, 2022.

For the full year ended December 31, 2023 the Company reported a net loss of $21,000 compared to net income of $181,000 for the same period ended December 31, 2022.

Fiscal 2023 as compared to 2022

Revenues: Revenues from rent for the leased property was $101,000 in 2023 and 2022. Revenues from managing the oil and gas operations for a third party was $51,000 and $111,000 in 2023 and 2022. The management agreement has the Company receiving a management fee of 10% of oil and gas revenue. The decrease in management fees is due to a decrease in the revenue due to a decline in oil and gas prices.

Operating Expenses: Operating expenses for the real estate property was $57,000 in 2023 and 2022. General and administrative expenses were $338,000 in 2023 and $317,000 in 2022.

Interest Income: Interest Income was $222,000 in 2023 and $212,000 in 2022.

Other Income: Other income was $131,000 in 2022. Included in other income for 2022 is $63,000 which represents the collection of an investment that had previously been fully reserved and a gain of $68,000 from the sale of equipment.

About New Concept Energy, Inc.

New Concept Energy, Inc. is a Dallas-based company which owns 191 acres of land located in Parkersburg, West Virginia. Located on the land are four structures totaling approximately 53,000 square feet. For more information, visit the Company’s website at www.newconceptenergy.com.

NEW CONCEPT ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
		At December 31,
			2023				2022
Assets
Current assets
Cash and cash equivalents		$	447			$	436
Other current assets			12				30
Total current assets			459				466
Property and equipment, net
Land, buildings and equipment			629				631
Note Receivable - related party			3,542				3,542
Total assets		$	4,630			$	4,639

NEW CONCEPT ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - CONTINUED
(amounts in thousands, except share amounts)
	At December 31,
		2023				2022
Liabilities and stockholders' equity
Current liabilities
Accounts payable - trade (including $8 in 2023 and 2022 due to related parties)	$	36			$	23
Accrued expenses		39				40
Total current liabilities		75				63
Stockholders' equity
Series B convertible preferred stock, $10 par value, liquidation value
of $100, authorized 100,000 shares, issued and outstanding one share		1				1
Common stock, $.01 par value; authorized 100,000,000
shares; issued and outstanding, 5,131,934 shares
at December 31, 2023 and 2022		51				51
Additional paid-in capital		63,579				63,579
Accumulated deficit		(59,076	)			(59,055	)
		4,555				4,576
Total liabilities & stockholders' equity	$	4,630			$	4,639

NEW CONCEPT ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except per share data)
	Year Ended December 31,
		2023				2022				2021
Revenue
Rent	$	101			$	101			$	101
Management Fee		51				111				-
		152				212				101
Operating Expenses
Operating Expenses		57				57				77
Corporate general and administrative		338				317				360
Total Operating Expenses		395				374				437
Operating loss		(243	)			(162	)			(336	)
Other Income (Expense)
Interest income from a related party		213				212				212
Interest income		9				-				8
Interest expense		-				-				(5	)
Other income		-				131				191
Total Other income (Expense)		222				343				406
Net income (loss) applicable to common shares	$	(21	)		$	181			$	70
Net income (loss) per common share-basic and diluted	$	(0.01	)		$	0.04			$	0.01
Weighted average common and equivalent shares outstanding - basic and diluted		5,132				5,132				5,132

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240401334041/en/

New Concept Energy, Inc.

Gene Bertcher, (800) 400-6407

info@newconceptenergy.com

Source: New Concept Energy, Inc.

FAQ

What was New Concept Energy, Inc.'s net loss for Q4 2023?

New Concept Energy, Inc. reported a net loss of $39,000 for Q4 2023.

How did the company's net income for 2023 compare to 2022?

The company reported a net loss of $21,000 for 2023 compared to a net income of $181,000 in 2022.

What caused the decrease in management fees for the company?

The decrease in management fees was due to lower revenue from oil and gas operations.

What was the company's operating expenses for real estate in 2023?

Operating expenses for real estate were $57,000 in 2023.

What was the general and administrative expenses for New Concept Energy, Inc. in 2023?

General and administrative expenses were $338,000 in 2023.

How did interest income change from 2022 to 2023?

Interest income increased to $222,000 in 2023 from $212,000 in 2022.

What was included in other income for the company in 2022?

Other income in 2022 included gains from investment collection and equipment sale.