Gevo(GEVO) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company generated $29 million in revenue for the first quarter of 2025, with only two months of operations at Chivo, North Dakota [6][21] - Combined operating revenue and other net income was$30.9 million for the first quarter [21] - The company ended the quarter with $135 million in cash, cash equivalents, and restricted cash [21] Business Line Data and Key Metrics Changes - The RNG subsidiary generated$5.7 million in revenue during the quarter, reflecting a $1.7 million increase compared to the previous year, driven by increased LCFS credit generation [21][22] - At Gevo North Dakota, income from operations was$500,000, and adjusted EBITDA was $1.8 million for February and March [22] - Gevo RNG reported income from operations of$1.1 million and adjusted EBITDA of 2.7 million last quarter [22] Market Data and Key Metrics Changes - The carbon intensity score for the company's ethanol is approximately 20, with expectations to improve further [10][21] - The company captured and sequestered 29,000 metric tons of carbon dioxide at the North Dakota site, avoiding 7,000 metric tons of carbon emissions [26] Company Strategy and Development Direction - The company aims to become EBITDA positive this year, leveraging the acquisition of the North Dakota plant and the monetization of the 45Z tax credit [7][21] - Plans to develop an alcohol-to-jet (ATJ) plant in North Dakota, with expectations for faster construction and lower capital costs [12][13] - The company is pursuing opportunities to develop and deploy ATJ plant designs globally, focusing on partnerships rather than full ownership [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fundamentals of the business despite market noise, indicating a strong growth trajectory [20] - The company anticipates monetizing the 45Z tax credits soon, which could significantly enhance EBITDA [8][56] - Management highlighted the importance of domestic energy production, job creation, and supporting agriculture as part of their mission [33] Other Important Information - The company is actively negotiating its first 45Z tax credit sales and expanding its market position for durable carbon dioxide removal credits [28][30] - The ATJ project is expected to be economically advantageous compared to traditional jet fuel production methods [17][18] Q&A Session Summary Question: How should we think about the cash cadence for the year? - The company plans to spend less than 40 million on the ATJ-sixty project and is refinancing its RNG plant to free up cash [40][41] Question: Is there an established market for carbon abatement products? - There is a growing market for durable carbon dioxide removals, and the company is expanding its presence in this area [51][52] Question: Are you potentially going to start monetizing the 45Z credits in Q2? - The company expects to monetize the 45Z credits soon and aims to be EBITDA positive for the year [56][57] Question: Could you speak to the amount you expect to receive for ethanol and dairy RNG molecules? - The expected value is proportional to the carbon intensity scores, with potential earnings of about $2 per CI point [68][70] Question: Can you provide a range for the value of Scope 1 and Scope 3 emission credits? - The values are well north of the types of carbon value seen in LCFS markets, potentially in the hundreds of dollars per ton [88][90]