Aemetis Reports Third Quarter 2022 Financial Results

Source: www.gulfoilandgas.com 11/3/2022, Location: North America

Aemetis, Inc., a renewable natural gas and renewable fuels company focused on negative carbon intensity products, announced its financial results for the three and nine months ended September 30, 2022.

“Revenues for the third quarter of 2022 increased 44% to $71.8 million compared to $50 million during the third quarter of 2021 as ethanol sales increased to 15.7 million gallons in the quarter while the India biodiesel plant began shipments to Indian oil marketing companies’ in mid-September and generated $11 million of revenues in about two weeks under this tender offer,” said Todd Waltz, Chief Financial Officer of Aemetis. “Capital investment in multiple projects that reduce carbon intensity were $13.7 million for the third quarter of 2022 and $37.2 million year to date for 2022, as our engineering and construction teams moved forward with initiatives across our biogas, sustainable aviation fuel, renewable diesel, carbon capture, and low carbon renewable ethanol businesses,” added Waltz.

Earnings per share (EPS) was $(0.46) in Q3 2022, before a shareholder redemption charge of an estimated $1.55 per share to reflect the planned redemption of all of the outstanding preferred ownership in Aemetis Biogas. Aemetis owns 100% of the common units of Aemetis Biogas and plans to repurchase 100% of the preferred units to become the sole equity owner of the biogas project. The redemption charge reflects the expected valuation premium for the redemption of the preferred units by Aemetis.

Aemetis recently closed a $25 million project financing supported by the US Department of Agriculture Renewable Energy for America Program (REAP) to fund the construction of dairy biogas digesters and biogas pipelines to produce Renewable Natural Gas (RNG). The financing was completed at a 5.95% interest rate and 0.25% USDA annual renewal fee which are fixed for five years, and has a highly favorable, 20-year repayment of principal.

“We are pleased with the milestones accomplished during 2022, including the transfer to Aemetis of operational management of the 125-acre Riverbank Industrial Complex for our sustainable aviation fuel (SAF) and renewable diesel (RD) plant projects; the purchase of 24 acres at the Riverbank site for carbon capture and sequestration injection wells; and completion of off-take agreements for $3.8 billion of sustainable aviation fuel with major airlines and $3.2 billion of renewable diesel to fully contract the SAF/RD plant volumes for project financing,” said Eric McAfee, Chairman and CEO of Aemetis. “The Aemetis Biogas RNG project is on schedule for an expected Q1 2023 In Service acceptance of several components of the project, including: five additional dairy digesters; the Aemetis 40-mile biogas pipeline is completing construction and testing; the centralized biogas-to-RNG production facility is now in test and commissioning; and the RNG gas pipeline interconnection with PG&E is currently being tested,” added McAfee.

“Importantly, we closed and received funding of about $50 million from two lower-interest-rate credit facilities that provide up to $100 million of new financing in the aggregate, subject to availability terms, to fund the pre-project financing of the carbon reduction projects at the Keyes ethanol plant and to fund the pre-project financing of land, engineering, permitting, test wells and related equipment for the renewable jet/diesel plant and the pre-project financing of two CO2 sequestration wells”, McAfee stated.

These milestones reflect execution of the projects outlined in the Aemetis Five-Year Plan that are expected to produce negative carbon intensity products and rapidly grow value for Aemetis shareholders. We invite investors to review the Aemetis Corporate Presentation on the Aemetis home page prior to the earnings call.

Financial Results for the Three Months Ended September 30, 2022
Revenues during the third quarter of 2022 increased 44% to $71.8 million compared to $50 million for the third quarter of 2021. Our California Ethanol operations experienced steady sales price with an increase in the volume of ethanol sold from 13.8 million gallons in the third quarter of 2021 to 15.7 million gallons in the third quarter of 2022. Delivered corn price increased from an average price of $7.99 per bushel during the third quarter of 2021 to $9.59 per bushel during the third quarter of 2022. Our India Biodiesel segment began delivering under a tender offer in mid-September, delivering $11 million of biodiesel in about two weeks.

Gross loss for the third quarter of 2022 was $1.1 million, compared to $4.8 million gross loss during the third quarter of 2021. Our California Ethanol segment accounted for $3.8 million gross loss, with offsetting gross profits of $2.8 million from our India Biodiesel segment.

Selling, general and administrative expenses were $6.9 million during the third quarter of 2022, compared to $5.1 million during the third quarter of 2021 as a result of investments in our ultra-low carbon initiatives and non-cash charges for stock compensation.

Operating loss was $7.6 million for the third quarter of 2022, compared to an operating loss of $9.9 million for the third quarter of 2021.

Interest expense during the third quarter of 2022 was $7.1 million, excluding accretion and other expenses in connection with Series A preferred units in our Aemetis Biogas LLC subsidiary, compared to $5.5 million during the third quarter of 2021. Additionally, our Aemetis Biogas LLC subsidiary recognized $1.3 million of accretion and other expenses in connection with preference payments on its Series A preferred units during the third quarter of 2022 compared to $2.2 million during the third quarter of 2021 along with a loss on extinguishment on the Series A preferred units of an estimated $53.9 million during the third quarter of 2022 as a result of a charge related to the redemption of the Series A preferred units as part of the amendment to the Preferred Unit Purchase Agreement. The redemption charge reflects the expected valuation premium for the redemption of the Series A preferred units by Aemetis. We engaged third parties to assist with the accounting and fair value calculations. We are completing our final review of the accounting and related charge, and at this time we do not believe the amount will change materially in the third quarter 10Q to be filed subsequently to this earnings release.

Net loss was $69.8 million for the third quarter of 2022, compared to a net loss of $17.6 million for the third quarter of 2021 driven primarily from the one-time unitholder redemption charge of $53.9 million or $1.55 per share. Absent this one-time charge, the net loss was $16 million representing $0.46 per share.

Cash at the end of the third quarter of 2022 was $251,000, compared to $7.8 million at the close of the fourth quarter of 2021. Investments in capital projects of $13.7 million were made during the third quarter of 2022 further highlighting our commitment to build ultra-low carbon projects.

Financial Results for the Nine Months Ended September 30, 2022
Revenues were $190.0 million for the first nine months of 2022, compared to $147.6 million for the nine months of 2021, driven by an increase in the selling price of ethanol to $2.86 per gallon from $2.49 per gallon on sales of 45.5 million gallons compared to 44.6 million gallons during the same period of 2021 along with sales of 7,000 metric tons of biodiesel at an average price of $1,550 per metric ton during the nine months ended September 30, 2022.

Gross loss for the nine months ended September 30, 2022 was $4.4 million, compared to a gross profit of $4.7 million during the first nine months of 2021, as the delivered corn price increased to $9.53 per bushel during the first nine months of 2022 from $7.62 per bushel during the same period of 2021 in a market where ethanol experienced similar price increases.

Selling, general and administrative expenses were $21.2 million during the nine months ended September 30, 2022, compared to $16.2 million during the first nine months of 2021, primarily attributable to non-cash stock compensation expense.

Operating loss was $25.7 million for the nine months ended September 30, 2022, compared to $21.0 million for the first nine months of 2021.

Interest expense was $20.0 million during the nine months ended September 30, 2022, excluding accretion and other expenses of Series A preferred units in our Aemetis Biogas LLC subsidiary, compared to interest expense of $17.9 million during the first nine months of 2021.

Additionally, our Aemetis Biogas LLC subsidiary recognized $4.4 million of accretion and other expenses in connection with preference payments on its Series A preferred units during the first nine months of 2022 compared to $7.9 million during the same period of 2021 along with a loss on extinguishment on the Series A preferred units of an estimated $53.9 million during the third quarter of 2022 as a result of a charge related to the redemption of the Series A preferred units as part of the amendment to the Preferred Unit Purchase Agreement. The redemption charge reflects the expected valuation premium for the redemption of the Series A preferred units by Aemetis.


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