Release Date: August 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Aemetis Inc (AMTX, Financial) reported a significant increase in revenue for Q2 2024, reaching $66.6 million compared to $45.1 million in Q2 2023.
- The company is experiencing positive cash flow from operations across all three of its operating businesses: ethanol production, dairy renewable natural gas, and India biodiesel.
- Aemetis Inc (AMTX) has secured $50 million in USDA guaranteed loans for biogas digesters and expects an additional $75 million in long-term financing for biogas digester and pipeline construction this year.
- The company is well-positioned to benefit from upcoming regulatory changes, including the California Air Resources Board's vote and the IRS guidance on the Inflation Reduction Act Section 45Z production tax credit.
- Aemetis Inc (AMTX) has received authority to construct air permits for a 90 million gallon per year sustainable aviation fuel and renewable diesel plant, indicating strong future growth potential in the renewable fuels market.
Negative Points
- Aemetis Inc (AMTX) reported a gross loss of $1.8 million for Q2 2024, compared to a $2 million profit in Q2 2023.
- The company's operating loss increased to $13.6 million in Q2 2024 from $8.7 million in the same period of 2023.
- Interest expenses rose significantly to $11.7 million during Q2 2024, up from $9.6 million in Q2 2023.
- Cash reserves at the end of Q2 2024 were notably low at $234,000, compared to $2.7 million at the end of Q4 2023.
- The company faced a loss on asset disposal of $3.6 million, contributing to increased selling, general, and administrative expenses.
Q & A Highlights
Q: What is the outlook for the LCFS credit bank and its impact on credit prices?
A: Eric McAfee, CEO, explained that the California Resources Board is likely to realize that a 9% rate is the minimum required to move major oil companies forward on buying more credits. The buildup in inventory by November will provide clarity for decision-making.
Q: Are you hedged against the current uptick in ethanol margins?
A: Andrew Foster, COO, noted that they have seen an uptick in margins, particularly in July. While August may be softer due to record production, the overall margin environment is expected to be more favorable than in Q1.
Q: How many dairy digesters are expected to be online by the end of 2024?
A: Eric McAfee stated that they expect to have approximately 16 dairies operating by year-end, with nine currently operating and six under construction.
Q: What is the confidence level in completing the MVR project by next year?
A: Eric McAfee expressed a high level of confidence, with the project expected to be completed by the third quarter of 2025. The fabrication of equipment is underway, and engineering design is complete.
Q: Can you provide a breakdown of the potential $50 million annual positive cash flow starting next year?
A: Eric McAfee mentioned that the biogas business alone could achieve this, with additional contributions from the ethanol business and India operations. The ethanol business will benefit from the MVR system, and the India business is expected to expand its contract.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
