On August 8, 2024, OPAL Fuels Inc (OPAL, Financial) released its 8-K filing for the second quarter of 2024. OPAL Fuels Inc is a fully integrated, nationwide leader in the production and distribution of low-carbon intensity renewable natural gas (RNG). The company also engages in the marketing and distribution of RNG to heavy-duty trucking and other hard-to-decarbonize industrial sectors, and designs, develops, constructs, operates, and services fueling stations for trucking fleets across the country.
Financial Performance Overview
For the second quarter of 2024, OPAL Fuels Inc reported revenue of $71.0 million, which fell short of the analyst estimate of $80.95 million. However, the company achieved an Adjusted EBITDA of $18.9 million, significantly higher than the previous year's $5.1 million for the same period. Net income for the quarter was $1.9 million, a stark contrast to the $114.1 million reported in Q2 2023, which included a $122.9 million non-cash gain on deconsolidation of variable interest entities (VIEs).
Revenue Breakdown
| Segment | Q2 2024 | Q2 2023 |
|---|---|---|
| RNG Fuel | $19.4 million | $10.6 million |
| Fuel Station Services | $39.3 million | $30.0 million |
| Renewable Power | $12.2 million | $14.5 million |
| Total Revenue | $71.0 million | $55.0 million |
Operational Highlights
OPAL Fuels Inc produced 0.9 million MMBtu of RNG in Q2 2024, a 50% increase compared to the same period last year. The company sold 18.7 million GGEs of RNG as transportation fuel, marking a 70% increase year-over-year. The Fuel Station Services segment also saw growth, selling, dispensing, and servicing 36.6 million GGEs of transportation fuel, a 3% increase from Q2 2023.
Commentary from Management
"Second quarter results were solid and we remain on target to achieve our 2024 financial objectives," said Adam Comora, Co-Chief Executive Officer. "We achieved Adjusted EBITDA of $18.9 million, driven by growing RNG production supportive RIN prices and improved margins in our Fuel Stations Services segment."
Challenges and Future Outlook
Despite the strong operational performance, the company faces challenges in ramping up RNG production at new facilities. The guidance for RNG production has been adjusted to a range of 4.0 to 4.4 million MMBtu, down from the previous estimate of 4.4 to 4.8 million MMBtu. However, the company maintains its 2024 Adjusted EBITDA guidance between $90 million and $100 million.
Balance Sheet and Liquidity
As of June 30, 2024, OPAL Fuels Inc had $302.3 million in liquidity, consisting of $274.7 million of availability under its senior secured credit facility and $27.6 million in cash, cash equivalents, and short-term investments. The company believes this liquidity is sufficient to meet its existing funding needs.
Capital Expenditures
During the first six months of 2024, OPAL Fuels invested $49.7 million across RNG projects and proprietary fueling stations, compared to $72.0 million in the prior year. The company also invested $16.5 million in unconsolidated entities, representing its share of capital expenditures for the Atlantic and Sapphire projects.
For more detailed information, please refer to the 8-K filing.
Explore the complete 8-K earnings release (here) from OPAL Fuels Inc for further details.
