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Thursday, Feb 22, 2024

Clean Energy Fuels Sees Revenue, Deliveries Rise

Looks to Amazon for business boost

Clean Energy Fuels Corp. says its revenue and fuel deliveries rose robustly last year, and it’s looking to a supply deal with Amazon to help boost business.

The Newport Beach-based company (Nasdaq: CLNE) is the largest supplier of renewable natural gas (RNG) made from organic waste for the transportation industry in North America. It sported a valuation of about $1 billion as of last week.

“We continue to execute on our growth plans around RNG supply and the buildout of new stations to accommodate Amazon and other fleets,” Clean Energy CEO and President Andrew Littlefair said.

Clean Energy said revenue rose 64% to $420 million last year, while fuel deliveries increased almost 19%, including a big boost in the final three months.

Still, the company posted a 2022 net loss of almost $59 million, which is expected to widen to between $105 million and $115 million this year.

In the fourth quarter, the company showed a net loss of $12.3 million.

Lower environmental credits and a spike in California natural gas prices in the fourth quarter weighed on the results, along with other issues.

On an adjusted basis, the company showed approximately $2.8 million in net income for the full year 2022.

Clean Energy Fuels procures and distributes RNG derived from the capture of methane gas from the decomposition of organic waste at dairies, other livestock sites and landfills.

Clean Energy distributes the fuel through its wide network of stations in the U.S. and Canada for use as a transportation fuel.


Sales Increase 

Clean Energy struck a deal with Amazon (Nasdaq: AMZN) about two years ago to supply fuel as a way to cut the online retail giant’s carbon footprint in its transportation fleets. The e-commerce giant also invested in the company as part of the deal.

“The expansion of our relationship with Amazon is having a positive impact on this growth. We’re also seeing increased demand for the clean fuel from other heavy-duty trucking firms as well as transit, refuse and other sectors,” CEO Littlefair told investment analysts in an earnings conference call on Feb. 28.

Littlefair said that “our dairy projects and volumes at new stations are anticipated to add to our cash flow profile.”

Clean Energy shares were trading at $4.57 apiece as of last week, down more than 40% from a year earlier.

Investor website TheMotleyFool.com said the company “might expect its RNG sales volumes to more than double by 2026, but investors have no patience left to look for signs that the business will ever become commercially viable.”

The investor website said that “dairy farm projects and livestock waste produce low volumes of RNG as of now and rely heavily on environmental credits to make money.”

Notable retailers and shippers using the company’s RNG services include Pepsi Frito-Lay, FedEx, Anheuser-Busch, USPS and UPS in addition to Amazon.


‘Very Optimistic’ 

Clean Energy Fuels is upbeat about the future.

“We remain very optimistic about the future of our business and the continued growth of renewable natural gas as a transportation fuel,” Corporate Communications Raleigh Gerber told the Business Journal on March 2.

She added: “Some of our RNG production projects at dairies are taking a little longer to build than first anticipated, but we currently have 13 that are underway.”

“We have a steady third-party supply of RNG fuel to fill our fueling infrastructure and the first RNG digest built by Clean Energy recently began production,” she said.

RNG is fueling almost every transit bus in the state of California as well as thousands of refuse trucks and heavy-duty trucks.


Hiring Additions

The company had job postings for more than 80 positions last week on its website.

“In particular, we are hiring additional people to oversee the construction and management of the RNG digesters at dairies and the expansion of our station network to meet the RNG fuel demand by fleets like Amazon and others,” Gerber said.  A digester is a huge tank or container that enables the biological process used to turn waste products into fuel.

Clean Energy Fuels is operating in a highly competitive market with other alternative fuel options such as hydrogen fuel also available.

In one of its recent milestones, Clean Energy Fuels said in January it had been awarded a contract by the San Diego Metropolitan Transit System to provide an expected 86 million gallons of renewable natural gas (RNG) to operate its bus fleet.

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Kevin Costelloe
Kevin Costelloe
Tech reporter at Orange County Business Journal

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