4Q21 Results: RNG Plant to Kickstart Revenue Stream in 2022; Net-Zero 1 Update



KEY POINTS
  • On February 24, 2021, Gevo announced 4Q21 earnings results. The company is still in a pre-revenue stage; however, Gevo expects to start generating biogas revenues from its RNG plant in 2Q22 along with sale of credits in the second half of 2022.
  • Revenues were $0.1 million for the quarter compared to $0.5 million in 4Q20. Cash was $475.8 million (includes restricted cash and marketable securities), down from $522.4 million in 3Q21, attributable to the construction of the RNG and Net-Zero 1 plants.
  • During the quarter, Gevo entered into several agreements to strengthen its supply chain as well as cement visibility of revenues through offtake deals. This includes agreements with Kolmer, Axens, Sweetwater Energy, and ADM.
  • During 2021, Gevo invested significant capital in its preliminary and advanced stage projects, including ~$23 million into the flagship Net-Zero 1 project, ~$52 million into Northwest Iowa RNG and other capital projects, and $12 million into strategic IPs.
  • Gevo is targeting Net-Zero 1 to be complete in late-2024 and operational in 2025. The total cost of the project is estimated to be around $900 million with $150-200 million annual EBITDA expected.
  • The company recently made the decision to use ethanol fermentation technology instead of isobutanol fermentation technology to produce SAF at Net-Zero 1 owing to increased productivity, lower capital costs, and process guarantees from Axens.
  • In December 2021, Argonne National Laboratory (ANL) reported that its preliminary findings were consistent with Gevo’s net-zero life-cycle emissions claim for the Net-Zero 1 project when measured using ANL’s GREET Model.
  • Gevo expects the RNG project to generate ~ $16-22 million EBITDA per year by 2023.
  • Our prior content on GEVO can be accessed HERE.

EARNINGS SNAPSHOT

Source: Company Filings 10K

On February 24, 2021, Gevo announced 4Q21 earnings results. The company is still in a pre-revenue stage; however, Gevo expects to start generating biogas revenues from its RNG plant in 2Q22 along with sale of credits in the second half of 2022.

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