Alto Ingredients partners with Vault for CO2 sequestration

PEKIN, Ill. - Alto Ingredients, Inc. (NASDAQ: ALTO), a notable producer and distributor of specialty alcohols and renewable fuels, announced today its collaboration with Vault 44.01 for a CO2 sequestration project. The agreement involves the transportation and storage of carbon dioxide from Alto's Pekin campus into the Mt. Simon sandstone formation in Illinois.

Bryon McGregor, President and CEO of Alto Ingredients, highlighted the agreement as a significant step towards reducing carbon emissions and enhancing profitability. The Pekin facility, which produces over 250 million gallons of specialty alcohols and renewable fuels annually, generates more than 600,000 metric tons of CO2 each year as a by-product.

Vault 44.01, a subsidiary of Grey Rock Investment Partners, specializes in carbon capture and sequestration development. The company has seven such projects in active development across the U.S., aiming to sequester around 2.5 million tons of CO2 annually.

Scott Rennie, President and CEO of Vault 44.01, expressed enthusiasm for the partnership with Alto, emphasizing the project's benefits for Illinois farmers and the community. Both companies prioritize safety, transparency, and long-term security in their carbon management efforts.

The project is still pending EPA approval, and the companies are addressing financing and equipment sourcing. Alto Ingredients serves a diverse market, including Health, Home & Beauty; Food & Beverage; Industry & Agriculture; Essential Ingredients; and Renewable Fuels. Vault 44.01 and Grey Rock Investment Partners focus on investments across the energy value chain, with Grey Rock managing assets valued at over $1.3 billion.

This initiative is expected to substantially reduce CO2 emissions, providing direct value to the Pekin community through environmental and economic contributions. The information in this article is based on a press release statement.

In other recent news, Alto Ingredients Inc. reported a challenging Q2 2024 with decreased revenues and a net loss of $3.1 million, primarily due to lower protein and carbon market prices, and substantial maintenance costs of $11.3 million. The company, however, has shown resilience by focusing on strategic initiatives to diversify revenue streams and improve future profitability. These include carbon capture and storage initiatives, for which it has received a sustainability rating for its plants.

The company's management is optimistic about achieving positive adjusted EBITDA in Q3 2024, contingent on maintaining strong crush margins and meeting production targets. Moreover, the success of the Magic Valley project, updates on which are expected later this summer, could influence decisions on further technology implementations and asset monetization.

Despite the headwinds from market volatility and significant expenses, Alto Ingredients Inc. is strategically navigating through these challenges. The upcoming H.C. Wainwright Annual Conference in September will provide further discussions and updates on the company's progress.

InvestingPro Insights

Alto Ingredients' recent collaboration with Vault 44.01 for CO2 sequestration aligns with the company's efforts to enhance profitability and reduce carbon emissions. This strategic move comes at a crucial time for Alto, as reflected in recent financial data and market performance.

According to InvestingPro data, Alto Ingredients has a market capitalization of $146.09 million USD, with its stock price at $1.93 as of the previous close. The company's revenue for the last twelve months as of Q2 2024 stood at $1068.85 million USD, though it experienced a revenue decline of 17.56% during this period.

An InvestingPro Tip indicates that Alto Ingredients has seen a significant return over the last week, with a 12.21% price total return. This recent uptick could be partly attributed to investor optimism surrounding the new CO2 sequestration project. However, it's worth noting that the stock has fallen significantly over the last year, with a one-year price total return of -60.73%.

Another relevant InvestingPro Tip highlights that Alto's liquid assets exceed short-term obligations, which could provide financial flexibility as the company pursues this new environmental initiative. This healthy liquidity position may be crucial for addressing the financing needs mentioned in the project's pending stages.

For investors seeking a more comprehensive analysis, InvestingPro offers 10 additional tips for Alto Ingredients, providing a deeper understanding of the company's financial health and market position.

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