Montauk energy(MNTK) - 2023 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenues in 2023 were $174.9 million, a decrease of$30.7 million or 14.9% compared to $205.6 million in 2022, primarily driven by a decrease in realized RIN pricing and natural gas index pricing [79][80] - Adjusted EBITDA for 2023 was$46.5 million, a decrease of $24.0 million or 34.0$70.5 million for 2022 [15] - Net income for 2023 decreased $20.3 million or 57.7$18.4 million, an increase of $1.2 million or 7.4$59.3 million, a decrease of $35.1 million or 37.2$2.71, a decrease of 16.6% compared to $3.25 in 2022 [11] - Average commodity pricing for natural gas for 2023 was 58.7$3.06 [61] Company Strategy and Development Direction - The company continues to expect capital investment for development projects to range between $140 million and$160 million for the first phase in North Carolina [7] - The company announced plans for a landfill gas to RNG project in Irvine, California, expected to process large volumes of biogas [53] - The strategic decision to exit a facility was influenced by the expiration of an above-market power purchase agreement and the sale proceeds exceeding the carrying value [78] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing weather anomalies impacting production and expressed cautious optimism for recovery in Q1 [37][87] - The company expects RNG production volumes for 2024 to range between 5.8 million and 6.1 million MMBtu, with corresponding revenues between $195 million and$215 million [85] - Management noted that profitability is highly dependent on market prices for RINs and environmental attributes [81] Other Important Information - The company recorded impairments of $0.9 million in 2023, a decrease of 81.4$73.8 million [15] - The company entered into a loan agreement extending the maturity date to December 31, 2033, with a balance of approximately 10 million [14] Q&A Session Summary Question: Long-term outlook regarding D3 RIN pricing and LCFS pricing - Management did not provide specific guidance on forward prices for environmental attributes but noted a 30% increase in demand for those attributes as per EPA guidance [65] Question: Insights on Q4 production and outlook for Q1 - Management indicated that Q4 RNG production was impacted by weather issues and expressed hope for a bounce back in Q1 [44][87] Question: 2024 spending plans and drivers for increase year-over-year - Management confirmed capital expenditures for 2024 are expected to be approximately 150 million to $167 million, driven by larger projects [89]