Aemetis Inc (AMTX) Reports Mixed Q3 2023 Results with Strong Net Income Amidst Revenue Decline
Net income of $30.7 million for Q3 2023, a significant improvement from a net loss of $66.8 million in Q3 2022.
Revenue decreased by 4% year-over-year to $68.7 million in Q3 2023 from $71.8 million in Q3 2022.
Basic EPS was $0.79 for Q3 2023, bolstered by the sale of Inflation Reduction Act investment tax credits.
Capital investments of $18.6 million in the first nine months of 2023, focusing on ultra-low carbon projects.
Aemetis Inc (NASDAQ:AMTX) announced its financial results for the third quarter of 2023 on November 9, 2023, revealing a mix of challenges and achievements. Despite a slight decline in revenue, the company reported a substantial net income, primarily driven by the sale of investment tax credits.
Financial Performance Overview
For Q3 2023, Aemetis Inc (NASDAQ:AMTX) reported revenues of $68.7 million, a 4% decrease from the $71.8 million reported in the same quarter of the previous year. The company's India Biodiesel segment saw a significant increase in production, delivering 15.5 thousand metric tons of biodiesel, a 121% increase from Q3 2022. However, the California Ethanol operations experienced a decrease in ethanol volume sold, from 15.7 million gallons in Q3 2022 to 13.8 million gallons in Q3 2023.
The cost of goods sold was slightly lower at $68.2 million compared to $72.9 million in Q3 2022, and the gross profit turned positive at $492 thousand, a notable improvement from a gross loss of $1.1 million in the same quarter last year. Selling, general, and administrative expenses increased to $9.0 million, up from $6.4 million in Q3 2022, reflecting the company's investment in ultra-low carbon initiatives and non-cash charges for stock compensation.
Operating loss widened slightly to $8.5 million for Q3 2023 from an operating loss of $7.6 million in Q3 2022. Interest expense also increased to $10.2 million, excluding certain accretion and other expenses. The net income for the quarter was a positive $30.7 million, a significant turnaround from the net loss of $66.8 million in Q3 2022, largely due to the sale of $63 million of Inflation Reduction Act investment tax credits for cash proceeds of $55.2 million.
Capital Investments and Cash Position
Aemetis Inc (NASDAQ:AMTX) continued to invest in its future, with capital investments totaling $18.6 million in the first nine months of 2023, focusing on biogas, sustainable aviation fuel, renewable diesel, carbon capture, and low carbon renewable ethanol businesses. The company ended the quarter with $3.9 million in cash, compared to $4.3 million at the end of 2022.
Operational Highlights and Future Outlook
Eric McAfee, Chairman and CEO of Aemetis, highlighted the company's operational milestones, including the expansion of biodiesel production capacity in India to 60 million gallons per year and the receipt of a $150 million biodiesel supply allocation from the three India government Oil Marketing Companies. The company also made significant progress on its Riverbank SAF/RD plant and energy efficiency projects at the Keyes ethanol plant, supported by grants totaling $16.7 million.
Looking ahead, Aemetis expects a transition to positive cash flow from operations during the fourth quarter, driven by the contributions from its biogas, ethanol, and biodiesel businesses. The company's strategic focus remains on transforming renewable energy with low and below-zero carbon intensity transportation fuels.
Investors are invited to review the Aemetis Corporate Presentation and join the earnings review call scheduled for November 9, 2023, at 11:00 a.m. Pacific time.
Conclusion
Aemetis Inc (NASDAQ:AMTX) has demonstrated resilience in the face of market challenges, achieving a strong net income in the third quarter of 2023. With strategic capital investments and a focus on ultra-low carbon projects, the company is positioning itself for future growth and a positive cash flow trajectory. Investors may find Aemetis an interesting case study in balancing operational efficiency with long-term sustainability goals.
Explore the complete 8-K earnings release (here) from Aemetis Inc for further details.
This article first appeared on GuruFocus.
