Gevo wins a judgment in latest Butamax vs Gevo dust-up
Jim Lane Gevo a winner? Not the issue, says Butamax, as the Capulets and Montagues get it on again. It’s a tennis match in which the score is never love. Scene: Verona. A public place. The Prince: Three civil brawls, bred of an airy word,
By thee, old Butamax, and Gevo, Have thrice disturb’d the quiet of our streets,
And made the Digest’s ancient citizens
setteth aside required reading of matters thermochem and RFS, to hear again, and again, and thence again your claims and counterclaims and all the pleadings that issueth, containing more commas than...
Giant Appeals Court Victory For Biofuels
Jim Lane
As DuPont’s (DD) Jan Koninckx put it in his understated way, July 28th was “a good day for biofuels.”
But it was the biggest victory in the courts for biofuels, ever.
Specifically, the U.S. Court of Appeals for the District of Columbia Circuit ruled in favor of Americans for Clean Energy and other renewable fuels advocates, agreeing with the petitioners that the Environmental Protection Agency erred in how it interpreted and used the “inadequate domestic supply” waiver in the Renewable Fuel Standard law in setting low renewable fuel volumes for 2014-2016.
In Americans for Clean Energy et al v. Environmental Protection...
KiOR’s Hard Yards of Commercialization
Jim Lane Businessman leaping photo via BigStock “The first cut is the deepest” goes the old saw no more so than in first commercial, first-of-kind advanced biofuels projects – especially when they are undertaken by newly-public companies under extraordinary scrutiny. In short, the KiOR (KIOR) story. And, as allegations fly, we look at the data on the ground and find that things are not always as they seem. Earlier this year, Phil New, the always interesting CEO of BP Biofuels, gave a rather extraordinary address in which...
Darling Ingredients: At the Margin
by Debra Fiakas CFA This week Darling Ingredients (DAR: NYSE) reported earnings of $100,000 on net sales of $874.7 million in the first quarter ending March 2015. Darling is a recycler of sorts, collecting by-products of the food production industry and recycling the left-overs and waste into proteins, fats and leathers. Nothing goes to waste. Every last chicken feather, hide, gallon of used cooking grease and cake crumb gets up-cycled to a usable material for feed, food, fuel or clothing. Its customers include pet food producers, personal care manufacturers and textile users, among others. Darling used...
Biofuels’ Upside From $60 Oil
Jim Lane Boom times for two-product strategies? Can feed markets offer relief for the challenges on the fuel side? The energy industry continues to feel the impact of falling energy prices. In Wednesday’s Top Story, we noted that the industry conversation has shifted from long-term fundamentals to a form of “oil price watching” not even the short-term fundamentals, but the kind of paralyzed ticker watching, waiting for the bottom, that comes during stock market crashes. “Barron’s says oil is going to $35bbl,” writes a trusted Digesterati. “The same guy who predicted the...
Aemetis’ Cellulosic Ethanol From Orchard Waste Project
by Jim Lane
There were more than 100 presentations at ABLC last week and not a clunker amongst them, but if I were to point the reader’s attention at one or two that stood out from the rest because of the short-term or long-term implications, I’d start with the news from Aemetis (AMTX) that they are embarking now on a $158 million cellulosic ethanol plant — to be built in Riverbank, California, in partnership with LanzaTech.
Cellulosic ethanol is selling for such a high price in California right now — the value jumps north of $4.00 per gallon at times —...
FutureFuel, Present Buying Opportunity
Tom Konrad CFA FutureFuel Corp. (NYSE:FF) manufactures chemicals, biofuels (mostly biodiesel), and other biobased products. About 60% of revenues have historically come from the Chemicals unit, with the balance of 40% coming from the Biodiesel unit. Both units saw sharp declines in revenues over the last two quarters for reasons that seem likely to be temporary (at least in part.) The stock has sold off sharply as a result, falling from the $18-$21 range this spring to its $12 recent price Biodiesel The entire biodiesel industry has been suffering from the expiration of the biodiesel blender's tax...
KiOR’s Columbus II: A New World of Profits?
Jim Lane One of biofuels’ hottest companies aims to accelerate path to break-even; is a shortfall in gallons produced in Q2 meaningful? In Texas, KiOR (KIOR) reported a Q2 loss of $38.5M, compared to a Q1 loss of $31.3M. on revenues of $239K, up from $71K in Q1. Net loss for the second quarter of 2012 totaled $23.0 million, or $0.22 per share. The biggest news coming out of the quarterly results is that the company is looking at an additional 500 dry ton/day facility, dubbed “Columbus II”, as an intermediate step between now and building its...
Kaydon: Profits Behind the Scenes
Debra Fiakas Most investors when they consider the alternative energy sector think about the big solar photovoltaic manufacturers or the ethanol producers. Engineering firms like Kaydon Corporation (KDN: NYSE) rarely come to mind. With special expertise in fluid processes, Kaydon is an indispensable partner in a variety of alternative energy projects such as wind, renewable diesel and ethanol plants. The company earned a 12% net profit margin on $4645 million in total sales in the year 2010. As impressive as that might be the really bright spot in Kaydon’s financial picture is its ability to generate cash ...
Neste Renewable Diesel Capacity Hits 2 Million Tons But Feedstock Constraints Loom
Finland’s Neste Oil Corporation
(NEF: F)
brought its fourth renewable diesel plant on-line in September 2011,
earning bragging rights to the world’s largest facility of its
kind. Located at the Port of Rotterdam, the plant has the
capacity to produce 800,000 metric tons of renewable diesel that
Neste brands NExBTL and claims is the “cleanest and highest-quality
renewable diesel on the market today.” Along with Neste’s
three other plants already in operation in Finland and Singapore the
fourth plant in Denmark brings Neste’s total production capacity to
2.0 million metric tons per year.
ADM Separates Ethanol Business
Prelude to a spin-off?
by Jim Lane
The Archer Daniels Midland Company (ADM) is breaking news of breaking off their ethanol unit…and a tumbling 40% decline in profit.
In Chicago, Archer Daniels Midland Company reported their financial results for the quarter ended March 31, 2019, but most interesting to us, they are looking at separating their ethanol business with the option of spinning it off completely. They are also taking other actions to restructure and deal with challenges they say include weather issues and trade pressures.
ADM announced a “series of measures to continue to underpin long-term-value creation” which included:
“First, to meet growing customer...
Covanta and Green Plains Partners Don’t Let A Crisis Go To Waste
by Tom Konrad, Ph.D., CFA
Last week, two of the stocks in my Ten Clean Energy Stocks model portfolio cut their dividends. Covanta Holding Corp (CVA) dropped its quarterly payout from $0.25 to $0.08 (a 68% cut) while Green Plains Partners (GPP) slashed its quarterly distribution from $0.475 to $0.12, a drop of 74.75%.
Before reducing their dividends, both companies had payout ratios near 100%, meaning that substantially all of their free cash flow was going to pay dividends. In general, companies are very reluctant to cut their dividends because it is a signal that their management thinks they cannot grow...
Solazyme’s Oilcane Boom
Jim Lane Though building capacity globally, Solazyme’s operations in Brazil are getting traction fast – and raised $235M last week. How much oil could be produced in Brazil via sugar-munching microalgae? Today, the Digest looks at Solazyme’s (SZYM) progress and the bigger picture. In California, two monster announcements came out of Solazyme headquarters last week. One related to project finance and one related to raising cash. In midweek, Solazyme Bunge (BG) Renewable Oils received approval for project financing in the form of a $120M (R$245.6M) loan from the Brazilian Development Bank (BNDES). ...
Living Endangeredly- Q2 Biobased Earnings Roundup
by Jim Lane
In hand we now have the latest earnings reports from what you might call the 8 Pathfinders – eight publicly traded stocks whose second quarter results offer insights into the health and performance of the advanced bioeconomy as 2019 heads towards its closing crescendos.
Our 8 Pathfinders – In the world of global renewable diesel at scale, Neste (Neste.HE); pure-play enzymes, Novozymes (NVMB); In pharma and synbio, Codexis (CDXS); as a hybrid play in advanced fuels, Aemetis (AMTX); in advanced marine and jet fuels, Gevo (GEVO); for biodiesel and hydrocarbons, Renewable Energy Group (REGI); in advanced began foods,...
Cosan’s Crush
by Debra Fiakas CFA Last week Cosan Limited (CZZ: NYSE) revealed a decision to delay the spin-off and recapitalization of its natural gas distribution network, COMGAS. Management cited unfavorable capital market decisions. Cosan has a mix of businesses, of which we have been most interested in its Raisen Energia sugar cane agriculture and ethanol production. Raisen is a joint venture with Royal Dutch Shell that was initiated in 2011. The operation squeezes over four million tons of sugar from cane grown in its fields and two billion liters of ethanol each year. The ethanol is sold through Shell’s...
Gevo To Supply Lufhansa With Renewable Jet Fuel
Jim Lane In Colorado, Gevo (GEVO) has entered into a heads of agreement with Lufthansa to supply Gevo’s alcohol-to-jet fuel from its first commercial hydrocarbon facility, intended to be built in Luverne, MN. The terms of the agreement contemplate Lufthansa purchasing up to 8 million gallons per year of ATJ from Gevo, or up to 40 million gallons over the 5 year life of the off-take agreement. Gevo utilized the enthusiasm generated in financial markets yesterday to raise $15.6M in cash and to convert $11M in debt to equity. What the deal means in the short term...
