Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Aemetis Inc (AMTX, Financial) expects revenue to rebound in Q2 2025 due to resumed biodiesel shipments in India.
- The company is scaling its dairy RNG production, aiming to reach 550,000 MMBTUs in 2025 and 1 million MMBTUs by 2026.
- Aemetis Inc (AMTX) has secured $20 million in grants and tax credits for its ethanol plant's mechanical vapor recompression system, expected to add $32 million in annual cash flow starting in 2026.
- The company is preparing for an IPO of its India subsidiary, targeting late 2025 or early 2026, which could provide significant capital for expansion.
- Aemetis Inc (AMTX) is positioned to benefit from regulatory tailwinds, including the California Low Carbon Fuel Standard amendments and federal renewable fuel standards, potentially generating significant revenue from LCFS credits and D3 RINs.
Negative Points
- Revenue for Q1 2025 was $42.9 million, down from $72.6 million the previous year, primarily due to delayed biodiesel contracts in India.
- The company reported a net loss of $24.5 million, roughly flat compared to Q1 last year.
- Interest expense rose to $13.7 million, reflecting the company's capital structure and investment base.
- Cash at the end of the quarter was only $500,000 following significant debt repayment and investment into carbon intensity reduction and dairy RNG expansion.
- The approval process for LCFS pathways has been slow, taking about two years, which delays revenue recognition from these credits.
Q & A Highlights
Q: How are tariffs impacting RNG production for 2025 and 2026, and what is the effect on sustainable aviation fuel?
A: Eric McAfee, CEO, explained that Aemetis's RNG value chain is almost entirely domestic, with feedstock from California dairies and customers in California, thus tariffs have minimal direct impact. For sustainable aviation fuel, domestic feedstocks are used, and any tariff impact would primarily affect one-time capital equipment purchases.
Q: What is driving the improvement in Aemetis's balance sheet, and what is the debt outlook for 2025?
A: Eric McAfee, CEO, stated that Aemetis paid off $15.5 million of debt in Q1 2025 and plans to continue this trend. Improvements are driven by investment tax credits, LCFS revenue increases, additional dairy operations, and an anticipated India IPO. The 45% production tax credit starting in January 2025 will also enhance debt reduction capabilities.
Q: What are the long-term targets for dairy RNG operating expenses per MMBTU?
A: Eric McAfee, CEO, noted that initial OpEx has been high due to startup phases, but expects a significant decrease as production scales up. Seasonal factors also affect costs, with winter production being lower. The company is building a team to manage up to 50 digesters, which will further optimize costs.
Q: Can you elaborate on the potential for RNG and ethanol in the India market?
A: Eric McAfee, CEO, highlighted that Aemetis is exploring RNG and ethanol opportunities in India, leveraging its biodiesel business. The Indian government supports ethanol due to its agricultural benefits, and Aemetis plans to diversify its offerings to enhance its IPO valuation and market position.
Q: What is the progress on the 45Z tax credit and its impact on dairy RNG?
A: Eric McAfee, CEO, mentioned that the appointment of the head of tax policy at Treasury is pending, which will influence the implementation of the 45Z tax credit. Aemetis expects a significant increase in RNG value once the provisional emissions rate process is finalized, potentially increasing revenue by 5X.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
