Montauk energy(MNTK) - 2021 Q1 - Quarterly Report

Production and Revenue - Montauk Renewables operates 12 RNG and three Renewable Electricity projects across six states, making it one of the largest U.S. producers of RNG[107]. - The company reported a 29.1% increase in RNG production volumes in Q1 2021 compared to Q1 2020, primarily due to the commissioning of a new engine[114]. - Montauk Renewables anticipates increased production from existing projects as landfills continue to accept more waste, enhancing gas collection[114]. - The company expects to generate LCFS credits at a multiple from its dairy farm project compared to landfill projects, with more attractive CI expected to be awarded in 2022[116]. - Montauk Renewables' revenues are primarily driven by the production of RNG and Renewable Electricity, along with the sale of Environmental Attributes[120]. - Total revenues for Q1 2021 were $31,447, an increase of $13,044 (70.9%) compared to $18,403 in Q1 2020[123]. - Renewable Natural Gas segment revenues increased to $28,123, up $14,234 (102.5%) from $13,889 in Q1 2020[125]. - Renewable Electricity Generation revenues decreased to $3,324, down $1,137 (25.5%) from $4,461 in Q1 2020[128]. Operating Expenses - Total operating expenses for Q1 2021 were $43,651, an increase of $22,465 (106.0%) from $21,186 in Q1 2020[122]. - General and administrative expenses surged to $20,452, an increase of $17,013 (494.7%) compared to $3,439 in Q1 2020[131]. - Royalties, transportation, gathering, and production fuel expenses increased to $5,532, up $3,050 (122.9%) compared to $2,482 in Q1 2020[133]. - Renewable Electricity operating and maintenance expenses increased by $461 (18.4%) to $2,965 in Q1 2021 compared to Q1 2020[134]. - Royalties, transportation, gathering, and production fuel expenses rose by $3,277 (111.4%) to $6,218 in Q1 2021 compared to Q1 2020[135]. - Depreciation and amortization increased by $389 (7.3%) to $5,737 in Q1 2021 compared to Q1 2020[136]. - Impairment loss in Q1 2021 was $626, an increase of $348 (125.2%) compared to $278 in Q1 2020[137]. Profitability and Loss - Operating loss for Q1 2021 was $(12,204), a decline of $9,421 (338.5%) from $(2,783) in Q1 2020[122]. - Operating loss in Q1 2021 was $12,204, an increase of $9,421 (338.5%) compared to an operating loss of $2,783 in Q1 2020[141]. - Consolidated EBITDA for Q1 2021 was $(6,500), compared to $2,591 in Q1 2020[149]. Cash Flow and Capital Expenditures - For Q1 2021, the company generated $7,769 in cash from operating activities, a 565.1% increase from $1,168 in Q1 2020[160]. - The company incurred $1,355 in capital expenditures in Q1 2021, with approximately $917 related to optimization projects[161]. - The company expects 2021 capital expenditures to range between $8,500 and $9,500, including $2,000 to $4,000 for optimization projects at recently commissioned facilities[158]. - The company anticipates up to $3,000 in initial capital expenditures in 2021 related to acquisitions[158]. Debt and Financial Position - Cash and cash equivalents as of March 31, 2021, were $22,643, up from $20,992 at December 31, 2020[150]. - Debt before issuance costs decreased to $64,198 as of March 31, 2021, from $66,697 at December 31, 2020[151]. - The Amended Credit Agreement provides an $80,000 revolving credit facility with a $75,000 accordion option for additional capital access[158]. - The company aims to maintain a Total Leverage Ratio of not more than 3.0 to 1.0 as per the Amended Credit Agreement[159]. Tax and Compliance - The effective tax rate for Q1 2021 was (10.7)%, significantly lower than 217.0% in Q1 2020 due to an income tax benefit[140]. - The company continues to implement remediation initiatives in response to a previously identified material weakness in internal control over financial reporting[163]. Inventory and Production Metrics - Total RNG production volumes were 1,348 MMBtu, a decrease of 41 MMBtu (3.0%) from 1,389 MMBtu in Q1 2020[124]. - RIN inventory at the end of Q1 2021 was 622, a decrease of 490 (44.1%) from 1,112 in Q1 2020[122]. - Average realized RIN price rose to $1.91, a significant increase of $1.15 (151.3%) compared to $0.76 in Q1 2020[125]. - The average realized price for RINs in Q1 2021 was approximately $1.91, below the D3 RIN index price of approximately $2.54[117].