Gevo discusses development plans during Q3 earnings call

By Erin Voegele | November 11, 2020

Patrick Gruber, CEO of Gevo Inc., discussed demand for the company’s renewable hydrocarbon products and the planned development of three proposed production facilities during a third quarter earnings call, held Nov. 10.  

“This past quarter was extremely significant for us,” Gruber said, noting the company now has about 48 million gallons per year of take-or-pay offtake agreements in place. Those contracts now justify the development of more than one production facility, he said, noting that the company’s Luverne, Minnesota, facility will not be large enough to service the contracts that have been signed to date.

Gruber also discussed funds raised during the third quarter, noting the company will use those funds to pay off Whitebox before the end of the year. The resulting removal of liens is expected to help attract potential investors.

According to Gruber, Gevo now also has the funding required to complete project engineering and development work necessary to secure project financing. The company is in the process of choosing additional plant sites. Gruber noted that Gevo’s choice of plant sites is impacted by the ideas of its potential equity investors. While the company hasn’t disclosed who its potential equity investors are, Gruber said Gevo is working with several potential partners.

Regarding business development, Gruber said Gevo is expected to secure additional large offtake agreements. Negotiations are progressing he said, but noted that the agreements are not inked yet.

In the meantime, Gruber said the company is working to complete engineering for the 48 million gallons per year of plant projects that are already under contract and expects to name engineering firms the company will be using to engineer and build the projects soon.

“For the first time in many years—and this is a big deal—we aren’t in the mode of having to raise money to simply stay alive,” Gruber said. “Now its all about project execution and growth. It’s about leveraging our technology, the marketplace development that we already have in place, and getting the project financing secure to build multiple projects.”

Gruber briefly discussed Gevo’s partnership with Praj, noting the company is working to build and license plants in India. The Indian Air Force would be the ultimate customer for those projects, he said.

Gevo is also continuing to develop its biogas projects, Gruber said. The company’s Luverne plant is also currently operating to produce renewable isobutanol that is used as feedstock for renewable hydrocarbon production at Gevo’s facility in Texas. A statement released by Gevo notes that approximately 50,000 gallons of isobutanol will be produced at the facility and shipped to the Texas plant this quarter. An additional 50,000 gallons of production is expected to be produced during the second quarter of 2021.

Gevo reported third quarter revenue of $200,000, down form $6.1 million during the same period of last year. Loss from operations was $6.1 million, compared to a loss of $8 million reported for the third quarter of 2019. Net loss per share was 9 cents, compared to a loss of 66 cents during the same period of last year.