Montauk Renewables, Inc. Q1 FY2025 earnings call

• Regulatory Updates: EPA delayed 2024 Renewable Fuel Standard compliance deadline; Montauk has zero exposure to 2024 cellulosic biofuel waiver as all 2024 RINs sold. BRRR rule effective in 2025 delayed RIN availability from 2025 production.
• Development Efforts: North Carolina swine project to commence production/revenue in 2026; second Apex facility in final commissioning stages, expected Q2 2025. Blue Granite project under evaluation; Atascocita biogenic CO2 project prioritized. Rumpke RNG project to have food-grade CO2 processing, expected Q3 2027. Collaboration with Emvolon on biogas to green methanol pilot at Atascocita.
• Financials: Q1 2025 revenues $42.6 million, up 9.8% year-over-year. G&A expenses $8.8 million, down 7.1% year-over-year. Employee-related costs $5.0 million, down 12.5% year-over-year. Adjusted EBITDA $8.8 million, down 7.2% year-over-year. Net loss $0.5 million, vs net income $1.9 million in Q1 2024.

Renewable Natural Gas Segment

• Produced approximately 1.4 million MMBtu of RNG in Q1 2025, flat compared to Q1 2024. Rumpke facility produced 39,000 MMBtu more in Q1 2025, while Apex facility produced 57,000 fewer MMBtu due to cold weather, equipment issues. Revenues from Renewable Natural Gas segment were $38.5 million in Q1 2025, an increase of 13.1% compared to Q1 2024. Operating and maintenance expenses for RNG facilities were $14.1 million in Q1 2025, an increase of 16.1% compared to Q1 2024.

Renewable Electricity Segment

• Produced approximately 46,000 megawatt hours in renewable electricity in Q1 2025, a decrease of 14.8% compared to Q1 2024. Revenues from renewable electricity facilities were $4.2 million in Q1 2025, a decrease of 13.5% compared to Q1 2024. Operating and maintenance expenses for renewable electricity generation were $3.4 million in Q1 2025, an increase of 46.2% compared to Q1 2024. Impairment of $2.0 million was reported in Q1 2025, an increase from $0.5 million in Q1 2024.

• Reaffirmed full-year 2025 outlook: RNG production volumes expected to range between 5.8 million MMBtu and 6 million MMBtu with corresponding revenues between $150 million and $170 million. Renewable electricity production volumes expected to range between 178,000 megawatt hours and 186,000 megawatt hours with corresponding revenues between $17 million and $18 million.

• Regulatory Uncertainty: EPA delays and rule changes impact RIN availability and obligated party purchases.
• Project Delays: Uncertainties in project deployments due to tariffs, compliance periods, and equipment sourcing.
• Facility Issues: Local gas utility in Atascocita no longer accepting RNG, conflicting with letter of intent; impairment of RNG equipment design at Blue Granite project.

Q: Color on RNG project at American Environmental Landfill?

A: Earlier this year, announced an RNG processing facility at the American Environmental Landfill in Tulsa, Oklahoma, expanding due to increased gas feedstock and investment, with dual capacity for commodities.

Q: Details on Rumpke site relocation?

A: Relocation due to contractual requirements, consolidating technology, adding food-grade CO2 processing, with no production gap.

Q: 45Z credits in Q1?

A: No, not recorded as of yet.

Q: Slowdown in RNG from Waste Management?

A: Slowdown in acquisition opportunities due to EPA compliance delays, tariffs, focusing on internal projects.

Q: North Carolina swine project details?

A: Unique project with broader farming collaboration, closed-loop system, multiple commodity production, CI score lower, expanding in 2026.

Q: O&M expense as % of revenue?

A: Model operating costs by production unit, not percentage of revenue; RNG and electric sides have timing differences in maintenance.