AEMETIS, INC Q3 FY2024 earnings call

• California's updated Low Carbon Fuel Standard (LCFS) was approved, with LCFS credit prices increasing; expectations of higher prices in the future. RNG revenue projections: exiting 2024, RNG production is ~550,000 MMBtus/year; by end of 2025, run rate to ~1 million MMBtus/year; 2026 projected RNG revenue of $60 million at $150 LCFS price. - India Biodiesel business completed $112 million in deliveries over 1 year, has positive EBITDA, and is bidding on a new 1-year contract. - North American businesses: Aemetis Biogas growing dairies and digesters, expecting USDA loan closings; ethanol business expects positive impact from E15 approval; SAF and renewable diesel plant in Riverbank has key permits; Carbon Capture subsidiary approved to drill characterization well. - All segments are synergistic, creating a circular bioeconomy.

In the third quarter of 2024, Aemetis' revenue totaled $81.4 million. The Keyes plant generated $45 million in revenue, with a production of 15.5 million gallons of ethanol, contributing approximately 55.3% to total revenue. The Dairy Renewable Natural Gas segment reported $4.2 million in revenue, having sold 85,993 MMBtus from 9 operating dairy digesters and 935,000 RINs and 20,000 metric ton of LCFS credits, accounting for about 5.2% of total revenue. The India Biodiesel business recognized $32.2 million of revenue, primarily from sales to India oil marketing companies, making up roughly 39.6% of total revenue. Gross profit for the quarter was $3.9 million, up from $492,000 in Q3 2023. Selling, general and administrative expenses decreased to $7.8 million from $9 million in the prior year, and operating loss improved to $3.9 million from $8.5 million in Q3 2023.

• RNG revenue projections: $20 million in 2025 at $100 LCFS price, $60 million in 2026 at $150 LCFS price. - Expect LCFS credit revenues to increase in Q2 2025 due to pathway approval. - Anticipate USDA loan closings: $25 million this quarter, $50 million in Q1 2025. - E15 approval expected to positively impact ethanol industry margins in California. - IRS guidance for 45Z production tax credit needed by end of 2024 for timely realization.

• Uncertainty regarding IRS releasing 45Z production tax credit guidance by January 20, 2025. - Potential impact of immigration policies on EB-5 funding. - Uncertainty on tariffs and feedstock price increases affecting Riverbank project economics. - Pace of EPA Class VI license processing for carbon capture could delay commercial operations.

Q: In your opinion, this 9% step-down, coupled with AAM, do you think this should be enough to move prices back to a range where projects like yours generate a good rate of return?

A: Eric McAfee stated that with California's strong commitment to LCFS, prices could head toward $220 as credits become scarce by 2027.

Q: How should we think about your working capital needs as you scale on the RNG side and other initiatives?

A: Eric McAfee said the ethanol plant is self-funding, RNG is mostly self-funding with aligned revenues and payments, and India is self-financing with $15 million in cash; funding is primarily for asset growth using USDA 20-year financing.

Q: Is the timeline 2025 potentially when the India IPO could get accomplished?

A: Eric McAfee mentioned they have recruited a CEO, and the timeline is dependent on market conditions, with potential acceleration in the next couple of months once the new CFO joins.