Aemetis (AMTX) 1 Aug 24 2024 Q2 Earnings call transcript

Aemetis Inc. recently held its second quarter 2024 earnings call, providing insight into the company's financial performance, business operations, and future outlook. The call, led by Executive Vice President and CFO, Todd Waltz, and CEO, Eric McAfee, highlighted several key themes and trends that are shaping the company's growth trajectory.

Financial Performance and Operational Updates

Aemetis reported a revenue of $66.6 million for the second quarter of 2024, marking a significant increase from the $45.1 million recorded in the same period last year. This growth is attributed to the successful operation of the company's key plant throughout the quarter and the commencement of production from a ninth digester in the dairy natural gas segment. Additionally, the India biodiesel business generated $24.8 million in revenue, primarily from sales to oil marketing companies.

However, the company reported a net loss of $29.2 million for the quarter, a slight increase from the $25.3 million loss in the previous year. This is attributed to increased selling, general, and administrative expenses, driven primarily by the recognition of a loss on asset disposal and higher interest expense. Despite this, Aemetis remains positive cash flow from operations in all three of its operating businesses, signaling a solid financial foundation.

Strategic Initiatives and Regulatory Landscape

Aemetis is executing a five-year plan aimed at expanding positive cash flow from operations while securing long-term, low-interest debt financing guaranteed by the USDA. The company is currently on track to achieve positive cash flow from each of its three operating businesses, with a focus on expanding its biogas and biodiesel operations.

Regulatory events are expected to have a significant positive impact on Aemetis' businesses. The California Air Resources Board's (CARB) vote on November 8, 2024, to approve increased demand for renewable fuels and other low-carbon energy sources for transportation, the IRS guidance on the Inflation Reduction Act's Section 45z production tax credit, and the permanent approval of E15 ethanol blending by the Federal EPA are all anticipated to boost Aemetis' product value and generate increased positive cash flow.

Business Expansion and Innovation

Aemetis is making strategic investments in capital projects to reduce the carbon intensity of its ethanol and construct dairy digesters. The company has received USDA conditional commitment approval for an additional $25 million renewable energy loan and expects to close the funding later this month, bringing the total new long-term financing from biogas digester and pipeline construction to $75 million this year.

The company is also exploring opportunities in sustainable aviation fuel (SAF) and renewable hydrogen, leveraging its expertise in biogas and dairy renewable natural gas to supply these emerging markets. With the Aemetis sustainable and renewable diesel business receiving air permits for a 90 million-gallon per year SAF plant and the India biodiesel business securing a $150 million one-year allocation for biodiesel sales, Aemetis is well-positioned to capitalize on the growing demand for low-carbon fuels.

Investor and Analyst Interactions

During the call, key analysts and investors had the opportunity to ask questions about Aemetis' financial performance, strategic initiatives, and regulatory landscape. These interactions provided valuable insights into the concerns and expectations of influential stakeholders, highlighting the company's progress and future growth prospects.

Conclusion

Aemetis Inc.'s second quarter 2024 earnings call painted a picture of a company on the cusp of significant growth, driven by strategic investments, regulatory support, and a focus on low-carbon fuels. With a solid financial foundation, a clear strategic direction, and a commitment to innovation, Aemetis is well-positioned to capitalize on the opportunities in the renewable energy and low-carbon fuel markets. As the company continues to execute its five-year plan and navigate the regulatory landscape, investors and stakeholders will be closely watching its progress.