Clean Energy(US:CLNE)2023-11-10 02:38Financial Data and Key Metrics Changes - The company reported revenue of $95.6 million for Q3 2023, down from $125.7 million in Q3 2022, reflecting a decline of $30 million [18] - GAAP operating loss for Q3 2023 was $21.4 million, compared to a loss of $8.6 million in the same quarter last year, indicating a $12.8 million increase in losses [19] - Adjusted EBITDA for Q3 2023 was $14.2 million, down from $23.9 million in Q3 2022, a decrease of $9.7 million [58] Business Line Data and Key Metrics Changes - RNG volume delivered was 56.7 million gallons in Q3 2023, up 5% year-over-year but down 3% sequentially from Q2 2023 due to RNG shortages [35] - The adjusted EBITDA comprised $15.5 million from the distribution business and a negative $1.3 million from the dairy RNG production business [37] Market Data and Key Metrics Changes - RIN pricing exceeded expectations and remained high in Q4 2023, contributing positively to earnings [17] - The company noted a lower share of RIN values due to a mix issue, affecting overall earnings [42] Company Strategy and Development Direction - The company remains optimistic about its RNG strategy, emphasizing the importance of a national fueling infrastructure to optimize RNG deliveries [10][11] - Significant investments are being made in RNG production projects, with a focus on dairy RNG production [27] - The introduction of Cummins' new 15-liter natural gas engine is seen as a game changer for the heavy-duty truck market, expected to increase RNG demand significantly [29][30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that Q3 results fell short of expectations but highlighted that key strategic milestones are being executed without significant obstacles [25] - The company is optimistic about the future of RNG, citing strong demand from major companies and the potential for increased market penetration of natural gas trucks [15][31] Other Important Information - The company is on track to meet its RNG supply timeline through constructed projects and potential acquisitions [11] - The company has secured partnerships with major players in the energy sector, enhancing its credibility and investment potential in the RNG space [9] Q&A Session Summary Question: Can you expand on the RNG shortages? - Management indicated that the shortages were due to both supply issues and their own production delays, with some low CI projects experiencing startup and certification delays [39][40] Question: What is the impact of lower RIN values? - Management confirmed that the lower RIN values were due to a mix issue rather than a fundamental change in their share of the market [42] Question: What is the status of RNG production projects? - Management confirmed that they are on track for six projects to be producing gas by the end of 2023, with a pipeline of additional projects in development [44][46] Question: How do you see the ramp rate for the new 15-liter engine? - Management expressed confidence in the ramp rate, expecting significant increases in production and sales over the next few years [68] Question: What are the competitive dynamics in the dairy RNG market? - Management noted that while the current low LCFS prices have made it tougher to sign new dairies, a higher LCFS price would likely spark more interest [98][112]