Release Date: March 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you elaborate on the production guidance for 2025 and the expected contributions from projects in construction? A: Adam Comora, Co-CEO, explained that they expect increasing utilization from facilities as they build in capacity for growing landfill gas volumes. Jonathan Maurer, Co-CEO, added that they anticipate continued growth from same-store sales as landfills produce more gas, with ramp rates varying by project. They are optimistic about the projects reaching full capacity, particularly as gas resources are higher than forecasted.
Q: How is Opal Fuels approaching the competitive landscape and potential growth opportunities amid market changes? A: Jonathan Maurer, Co-CEO, noted that while their primary focus is on executing existing opportunities, they are open to evaluating new market opportunities. They have good access to capital for potential acquisitions and believe they are well-positioned to compete for new biogas rights projects due to their successful track record and vertical integration.
Q: Is there any 45Z number included in your 2025 guidance, and what would it take to receive 45Z credits this year? A: Kazi Hasan, CFO, stated that the low end of their guidance includes a material amount of 45Z credits, with a smaller expected value at the top end. Adam Comora, Co-CEO, added that they are cautiously optimistic about the 45Z process, with a proposed rule seeking final comments by April 10, and they hope for resolution shortly after.
Q: Could you elaborate on the tightness in the dispensing market and its drivers? A: Adam Comora, Co-CEO, explained that the tightness is due to RNG supply growing faster than the dispensing market, influenced by the transition from 12-liter to 15-liter engines and regulatory uncertainties. They expect potential acceleration in 15-liter adoption with product availability and regulatory clarity.
Q: How is Opal Fuels balancing growth and capital preservation, and when might it make sense to focus on free cash flow generation? A: Adam Comora, Co-CEO, emphasized their disciplined capital allocation approach, highlighting their ability to toggle between growth and free cash flow generation. They have built a free cash flow machine with low maintenance CapEx, providing flexibility to create discretionary free cash flow when appropriate.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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