Release Date: November 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue increased to $81.4 million in Q3 2024 from $68.7 million in Q3 2023, indicating strong growth.
- Gross profit improved significantly to $3.9 million in Q3 2024 from $492,000 in Q3 2023.
- The company is expanding its renewable natural gas production, with plans to increase to 1 million MMBTUs by the end of 2025.
- Aemetis Inc (AMTX, Financial) is well-positioned to benefit from the updated California Low Carbon Fuel Standard, which supports low carbon fuels.
- The India biodiesel business recognized $32.2 million in revenue, showing strong performance in international markets.
Negative Points
- Net loss was $17.9 million for Q3 2024, compared to a net income of $30.7 million in Q3 2023, primarily due to the absence of investment tax credits.
- Cash at the end of Q3 2024 was only $296,000, a significant decrease from $2.7 million at the end of Q4 2023.
- Interest expense increased to $11.7 million in Q3 2024 from $10.2 million in Q3 2023, impacting profitability.
- The realization of the 45Z production tax credit is uncertain, pending IRS guidance, which could delay revenue generation.
- The timing of the India biodiesel contract may lead to weaker revenue in Q4 2024 due to government processes.
Q & A Highlights
Q: Do you think the recent LCFS update will move prices to a range where projects generate a good return?
A: Yes, the updated LCFS is expected to fund projects effectively. Analysts predict that by 2027, the credit bank will be zero, leading to a maximum price of approximately $220. The strong commitment from California suggests that major oil companies will need to secure credits sooner to avoid higher future prices.
Q: What are your thoughts on the Cummins 15L engine and its impact on RNG adoption?
A: The Cummins X15 engine performs comparably to diesel engines with lower emissions and fuel costs. It is expected to meet future emission thresholds, making it a viable long-term solution. The expansion of RNG production is necessary to fuel fleets with carbon-negative fuel.
Q: What are the perceived risks to future tax credits with the new administration in 2025?
A: The timing of the 45Z production tax credit guidance is uncertain. We are working with the IRS to expedite the process. If not resolved by year-end, it may be addressed in the second quarter of next year with the new administration.
Q: How will potential tariffs and feedstock price increases impact Riverbank's economics?
A: Riverbank plans to use largely domestic feedstocks, minimizing reliance on imports. While tariffs could impact corn prices, our domestic sourcing strategy should mitigate significant disruptions.
Q: What is the path for RNG capacity beyond 2026?
A: We aim to exceed 550,000 MMBTUs in 2025 and reach 1 million in 2026. We have agreements with 48 dairies and are working to accelerate construction to achieve these targets. Further expansion to 1.65 million MMBTUs is planned by 2027.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
