Gevo Inc (NASDAQ:GEVO) posted second-quarter results that demonstrated it is in a strong financial position with over $567.2 million in cash and marketable securities to press ahead with the next phase of engineering work at its Net-Zero 1 green energy project.
For the period ended June 30, 2021, the Englewood, Colorado-based company had cash, equivalents, restricted cash and marketable securities totaling $567.2 million, compared to $525.3 million at the end of the first quarter of 2021.
Gevo’s advanced Net-Zero 1 production facility is expected to begin production in 2024 in Lake Preston, South Dakota. It will produce energy-dense liquid hydrocarbons that should have a net-zero greenhouse gas footprint across the whole of the life-cycle when burned as transportation fuels.
READ: Gevo says it has restarted production operations at its Luverne facility in Minnesota
In an earnings statement, Gevo CEO Dr Patrick R Gruber said: “The engineering and design work for our Net-Zero 1 Project is going well. We are figuring out the optimizations and integrations for Net-Zero 1, and how to generate more cash sooner.”
“We are looking forward to completing the next phase of the engineering work in December of this year and moving forward towards getting the financing closed in the first half of next year.”
Revenue for the second quarter ended June 30, 2021, was $0.4 million, compared with $1 million in the same period in 2020.
Hydrocarbon revenue dipped to $0.3 million in the quarter from $0.9 million in the same period a year earlier. The company explained that hydrocarbon sales decreased because of lower production volumes at its demonstration plant at the South Hampton Resources Inc facility in Silsbee, Texas. Gevo’s hydrocarbon revenue is comprised of sales of sustainable aviation fuel and renewable premium gasoline.
As a result of the pandemic and in response to an unfavorable commodity environment, Gevo said it terminated its production of ethanol and distiller grains in March 2020. As previously announced, Gevo’s production facility in Luverne, Minnesota is currently producing isobutanol. During the second half of 2021, Gevo expects to send finished isobutanol from the Luverne Facility to the South Hampton Facility so that renewable premium gasoline or jet fuel can be produced.
Gevo highlighted that its wholly-owned renewable natural gas (RNG) project company, Gevo NW Iowa RNG LLC has signed definitive agreements with BP Canada Energy Marketing Corp. and BP Products North America Inc. for the sale of RNG. “Beginning in late 2022, Gevo RNG expects to generate cash distributions to Gevo of approximately $9 to $16 million per year,” said the company.
CEO Dr Gruber, CFO L. Lynn Smull, Chief Accounting Officer Carolyn Romero, and Geoffrey T Williams, who is VP, General Counsel and Secretary will host a conference call later today at 4:30 pm ET (2:30 pm MT) to review Gevo’s financial results and provide an update on corporate highlights.
To participate in the conference call, investors need to dial 1833-729-4776 in the US or 1830-213-7701 outside the US and reference the access code 2267135#
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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