Aemetis(US:AMTX)2021-11-12 00:44Financial Data and Key Metrics Changes - Revenues for Q3 2021 were $49.9 million, up from $40.9 million in Q3 2020, reflecting a year-over-year increase of approximately 22% [6] - Gross loss for Q3 2021 was $4.8 million, compared to a gross income of $771,000 in Q3 2020, indicating a significant decline in profitability [7] - Net loss for Q3 2021 was $17.6 million, compared to a net loss of $12.2 million in Q3 2020; after adjusting for a $5.3 million compliance reserve, the adjusted net loss would have been $12.2 million or $0.39 per share [9][12] - Cash at the end of Q3 2021 increased to $6.4 million from $592,000 at the end of 2020 [9] - Company debt decreased by $44.6 million by the end of Q3 2021 compared to December 31, 2020 [9] Business Line Data and Key Metrics Changes - North America operations saw an increase in ethanol selling price from $1.59 per gallon in Q3 2020 to $2.84 per gallon in Q3 2021 [6] - The delivered corn price increased from $4.92 per bushel in Q3 2020 to $7.99 per bushel in Q3 2021, impacting gross margins negatively [7] - Aemetis Biogas recognized $2.2 million of accretion and other expenses in Q3 2021, up from $1.8 million in Q3 2020 [9] Market Data and Key Metrics Changes - Ethanol pricing rebounded strongly, with current pricing at $3.50 per gallon as of the fourth quarter of 2021, while the average delivered cost of corn decreased to about $7.50 per bushel [10] - U.S. domestic gasoline demand was approximately 95% of 2019 levels, but U.S. ethanol exports lagged in the first three quarters of 2021 [26] Company Strategy and Development Direction - Aemetis is focused on producing below zero carbon intensity products, including renewable natural gas and renewable fuels, while maximizing the value of carbon credits [11] - The company announced a 5-year plan to grow to more than $1 billion in revenue and $325 million in annual cash flow [11] - The recent passage of the Federal Infrastructure, Investment and Jobs Act is expected to support Aemetis' low carbon renewable fuels businesses [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the positive regulatory trends for renewable fuels and the potential for significant tax credits under the Infrastructure Act [13][14] - The company is on track with its five-year plan, and management highlighted the importance of the California emission credits for future profitability [12][13] Other Important Information - Aemetis achieved important milestones toward revenue growth and sustained profitability in each of its four lines of business during Q3 2021 [15] - The company is expanding its dairy biogas project and has signed agreements with 22 dairies, with additional dairies in discussions [18][24] Q&A Session Summary Question: Clarification on 2023 guidance and tax credits - Management confirmed that the inclusion of tax credits would significantly increase EBITDA and net income, aligning with the company's growth strategy [50][51] Question: Regulatory support for sustainable aviation fuel pricing - Management indicated that the California Air Resources Board is committed to maintaining a supportive environment for low carbon projects, ensuring that credit prices do not fall below sustainable levels [54][56] Question: Update on dairy RNG operations - The company is on track with its dairy RNG project, having fully operated its first two dairies for a year and signed contracts with 22 dairies [61] Question: Differentiation in carbon capture and sequestration - Aemetis has a competitive advantage due to its own CO2 production, exceeding minimum thresholds for IRS 45Q credits, and has identified suitable geological formations for sequestration [62][64] Question: Unit economics of the Riverbank project - Management highlighted the advantages of using low-carbon inputs and the potential for strong margins in renewable diesel and sustainable aviation fuel production [68][70]