OPAL Fuels (US:OPAL)2022-11-15 21:37Financial Data and Key Metrics Changes - Year-to-date revenue for the first nine months of 2022 increased by 61% compared to the previous year [12] - Year-to-date adjusted EBITDA rose by 78% from last year, with guidance for 2022 set at $60 million to $63 million [12][28] - Net income for the third quarter was reported at $5.4 million, while net income for the nine months to date was $560,000 [41][42] Business Line Data and Key Metrics Changes - RNG operating facilities increased to six from two, with total annual RNG nameplate capacity reaching 3.9 million MMBtu [13] - The RNG dispensing network expanded to 123 fueling stations from 69, including 43 stations owned by the company [14] - Adjusted EBITDA for the third quarter was $25.5 million, with OPAL's share of RNG production sold at 0.6 million MMBtu [27] Market Data and Key Metrics Changes - Strong market pricing for environmental attributes, natural gas, and electricity contributed to positive performance [27][40] - The company expects annual earnings power from existing operating and construction projects to be approximately $190 million [19][29] Company Strategy and Development Direction - The company aims to address climate change by capturing methane gas emissions and reducing transportation emissions, focusing on displacing diesel fuel with renewable natural gas [8][10] - The passage of the IRA is expected to add significant profitability through new ITC credits, which should offset inflationary pressures [20] - The company is focused on executing and driving annual earnings power while maintaining operational excellence [37][49] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges such as unexpected drops in gas collection and delays in construction projects but remains positive about future growth [14][15] - The company views its existing projects as a solid base for future growth, with a robust advanced development pipeline [16][35] - Management emphasized the importance of liquidity and access to capital to fund construction commitments and development needs [46] Other Important Information - The company has identified root causes for challenges faced and has addressed many, although delays in achieving financial objectives were noted [15] - The advanced development pipeline now includes 16 projects representing over 7 million MMBtu of biogas [35] Q&A Session Summary Question: What are the common themes contributing to project delays? - Management noted that delays are primarily due to landfill and dairy owners reassessing their project pipelines and permitting delays [57][59] Question: What do recent M&A transactions imply about the value of the business? - Management believes these transactions validate the attractiveness of RNG as a renewable energy resource and the company's business model [62] Question: Can you walk through the bridge from Q3 to Q4 EBITDA guidance? - Management explained that Q4 guidance reflects a non-recurring gain in Q3 and adjustments made to better match operating costs with revenue recognition [68] Question: Have you locked in any 2023 RINs at higher prices? - Management indicated that they have not yet sold forward any 2023 production, awaiting new guidance from the EPA [72] Question: What are the primary gating factors for project development? - Management stated that the pace of development is influenced by third-party coordination, permitting, and finalizing biogas rights [95]