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Clean Energy Fuels Corp. Message Board

  • soderman.magnus soderman.magnus Nov 12, 2013 3:12 AM Flag

    Sustainable operating margin

    Hello everybody! Someone that has an idea of what kind of operating margin we could expect once its business matures (for its fueling network). In other words, when CLNE generates a turnover of USD 5 billion (quite a few years away..I know) do we expect operating margin in the 2%, 5%, 10% or 20% range? What I'm trying to get at is what operating margins this industry allows for. As an example, software companies usually have operating margins of 25-40%, but I have no idea of what margins this industry generates on average. Any feedback appreciated. Thanks

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    • For the fuel business the operating margin will be very small. Most of their fuel agreements are that CLNE provide fuel at cost plus 30 cents or so. So they will not be losing contracts to someone who can provide cheaper fuel.
      But the margins for the rest of their business should be fairly strong. No idea exactly where.

      I saved this paragraph from their website...."Because approximately half of our sales contracts are structured on an index-plus methodology, whereby we add a fixed margin to the market price of natural gas we pay to purchase the natural gas we ultimately sell to our customers, we like to point out that although tracking revenue growth is important, it is not perfectly indicative of how our business is performing"

      Sentiment: Buy

 
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