Clean Energy Fuels Corp. may have finally found a clearer path to profitability as it reins in construction costs for a nationwide plan it forged four years ago to dot major highways with natural-gas fueling stations.
Speculative buildouts also appear to be off the table this year as the company concentrates on serving fleets and big, longer-term customers that fuel up at its network of more than 535 stations across 42 states.
“We are focused on continuing to open stations with anchor fleet customers and increasing the utilization of existing stations,” Chief Executive Andrew Littlefair said on a recent conference call. “We don’t have any big projects that we’re hugely committed to.”
The country’s biggest builder and operator of natural-gas fueling stations completed 68 stations last year.
Some were built and sold specifically for its trucking, refuse, and transit customers, which include the likes of Ryder, Penske and UPS.
It added others to its network of fueling stations along heavily traveled routes, typically near airports, utility companies, universities, and city yards, among other spots.
Clean Energy raised $450 million in 2011 as part of its effort to build “America’s Natural Gas Highway,” a network of natural-gas stations spread out about every 250 miles along major transportation arteries in California, Texas, the Midwest, Southeast and Northeast.
Major backers included cofounder and legendary oilman and corporate raider T. Boone Pickens and Oklahoma City-based giant Chesapeake Energy Corp.
Buys, Construction
Clean Energy spent nearly $193 million to buy property and equipment in 2012 to expand the network. It cut that number to about $86 million in 2013 and 2014, according to its recently released annual report.
The company plans to wind down construction this year, with capital expenditures projected to fall to $59 million, down about 31% from the past few years.
“There isn’t any spec station spending,” Littlefair said of the outlook.
About $21 million of this year’s capital budget will go toward expanding operations at a Vermont company Clean Energy acquired a majority stake in late last year. Milton-based NG Advantage LLC, which sold its majority interest for $37.6 million, provides gas to 22 industrial and commercial customers, primarily in the Northeast and far from natural-gas pipelines.
Clean Energy is evaluating other industries in the U.S., such as paper mills and hospitals, that could benefit from the delivery service but hasn’t announced plans. NG operates 45 natural-gas tanker trucks, a number Clean Energy said it plans to increase through financing, though it didn’t provide a specific figure.
The company also paid $9 million to acquire a compressed natural-gas station in Milton as part of the agreement.
Momentum
Clean Energy enters the new year with some momentum and a cleaner balance sheet.
The company in January sold its 51% stake in a biomethane production facility in Dallas to a minority owner for $40.6 million. The deal eliminated $50 million in debt while increasing cash reserves by about $30 million.
Natural-gas demand remains strong despite months of depressed oil prices. Diesel prices have also fallen, though not at the same rate as oil.
“Out of the 600 fleets in our pipeline, only one has put their plans on hold because of the oil price,” Littefair said.
Company executives, heartened by a rare strong fourth quarter, still face challenges to gain profits.
Clean Energy posted an adjusted profit of $10.3 million in the fourth quarter on revenue of $132.1 million, easily topping Wall Street estimates. It posted an adjusted loss of $23.8 million on revenue of $84.9 million in the same quarter a year earlier, when it was aided less by federal tax credits.
It delivered a quarterly record 72.4 million gallons of gas in the last quarter, up 30%.
The company delivered 265 million gallons for the year, up 24% over 2013. Revenue increased 21% to $428.5 million, but profits remained elusive.
The company posted an adjusted loss of $70.8 million compared to a $41.6 million loss in 2013.
“We’re seeing the benefit of volumes that have increased,” Chief Financial Officer Robert Vreeland told the Business Journal, adding that more sales of natural-gas stations also helped.
“The company is absolutely focused on profits. Ultimately, that is what it’s all about.”
