3Q21 Results: Developing key alliances to strengthen future product market; Management optimistic about growth beyond Net-Zero 1



KEY POINTS
  • On November 10, 2021, Gevo announced 3Q21 earnings results. The company has been actively forming new alliances with the intent to further grow and expand the current production process.
  • On October 25, 2021, Gevo announced that it signed a memorandum of understanding (MoU) with Archer-Daniels-Midland Company (ADM) to support the output of 500 million gallons of Sustainable Aviation Fuel (SAF) and other renewable hydrocarbons. ADM will supply about 900 million of ethanol for transition and the production is likely to begin in about 2025-2026.
  • The company also signed a Letter of Intent with Chevron USA Inc. to jointly develop one or more facilities to produce SAF from inedible corn. Chevron will have offtake rights for 150 million gallons of SAF per year.
  • During the quarter, Gevo entered into a strategic alliance with Axens North America Inc. that gives Gevo exclusive rights to commercialization of Ethanol-to-Jet (ETJ) and SAF projects in North America. The company also announced acquisition of the Butamax patent estate to add to its near 600 patents’ portfolio. We had released an update note on October 18, 2021 highlighting key events.
  • Gevo’s Net-Zero 1 project is on track. Earlier last month, the company announced selection of Kiewit Energy Group Inc. to carry out the Front-End Engineering Design (FEED). Kiewit will also provide the engineering, procurement & construction services after completion of FEED phase.
  • The company expects increase in market interest in SAF after the White House announcement in the month of September targeting at least 3 billion gallons of SAF production by 2030 (with 20% lower aviation emissions).
  • Gevo generated marginal revenue in the quarter as sale of ethanol and distillers’ grain still remains suspended. Cash position was $522.4 million down from $567.2 million in last quarter, attributable to the construction of RNG and Net-Zero 1 plant.
  • Our prior content on GEVO can be accessed HERE.

On November 10, 2021, Gevo announced 3Q21 earnings results. The company has been actively forming new alliances with the intent to further grow and expand the current production process.

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