Greenlane Renewables ((TSE:GRN)) has held its Q4 earnings call. Read on for the main highlights of the call.
In the recent earnings call, Greenlane Renewables presented a generally positive sentiment, highlighting significant financial improvements, technological advancements, and strategic market positioning, particularly in Brazil. However, the discussion also acknowledged challenges such as revenue declines and potential impacts from US tariffs. Despite these hurdles, the company’s positive developments and strategic plans suggest a favorable outlook.
Improved Financial Metrics
Greenlane Renewables reported substantial improvements in its financial metrics. The adjusted dividend saw an impressive increase of over 80%, and the balance sheet’s cash position strengthened by more than 35%. Additionally, the company successfully reduced its G&A cost run rate by over 25%. A notable highlight was the increase in gross margin, which rose from 25% in 2023 to 32% in 2024.
Technological Innovations
The company is making strides in technological advancements, having filed two new patent applications for landfill gas upgrading technology. These innovations aim to maximize methane recovery while reducing capital expenditure. Greenlane also plans to unveil its next-generation product line in 2025, signaling a commitment to staying at the forefront of technological development.
Strong Financial Performance
Greenlane’s financial performance showed remarkable improvement, with adjusted EBITDA improving by 81%, reducing the loss from $9 million in 2023 to $1.7 million in 2024. The company also achieved a net income of $1.9 million in Q4 2024, a significant turnaround from the $16.8 million net loss in Q4 2023.
Market Leadership and Opportunities
The company has established itself as a market leader in Brazil and is well-positioned to benefit from the projected growth of renewable natural gas (RNG) volumes globally. According to the International Energy Agency, RNG volumes are expected to grow at a compound annual growth rate of 19% from 2018 to 2027, presenting substantial opportunities for Greenlane.
Revenue Decline
Despite the positive financial metrics, Greenlane experienced a decline in revenue. The fourth quarter revenue was $8.5 million, compared to $16.5 million in the same period of 2023. For the fiscal year 2024, revenue stood at $51.8 million, a 5% decrease from 2023’s $54.6 million.
Exposure to US Tariffs
The company is currently assessing the impacts of US tariffs, including potential retaliatory tariffs or other trade protectionist measures. This ongoing evaluation is crucial as it could affect Greenlane’s operations and financial performance.
Forward-Looking Guidance
Looking ahead, Greenlane Renewables emphasized its strategic focus on developing advanced products, enhancing project execution, and maintaining strong financial discipline into 2025. The company concluded 2024 with $16.2 million in cash and no debt, alongside a $21.8 million sales order backlog. Despite a revenue decrease, there was a marked improvement in profitability, with the adjusted EBITDA loss reducing by 81% year-over-year.
In summary, Greenlane Renewables’ earnings call conveyed a positive sentiment, underscored by significant financial and technological advancements. While challenges such as revenue declines and US tariffs were acknowledged, the company’s strategic plans and market positioning suggest a promising future. Investors and market watchers will be keen to see how Greenlane navigates these dynamics moving forward.