Montauk Renewables (MONT), a leader in renewable energy solutions, has presented its financial and operational results for the second quarter of 2024.
Despite an increase in operational capacity resulting in a 39% boost in production at the Pico facility, the company faced challenges including severe weather impacts on its Texas facilities and a strategic decision not to self-market a significant amount of Renewable Identification Numbers (RINs), leading to a $10 million decline in total revenues compared to the previous year.
However, the company sold the RINs generated in Q2 in the third quarter at an improved average price of $3.32. Montauk Renewables has reaffirmed its full-year guidance, anticipating continued growth in Renewable Natural Gas (RNG) production volumes and revenues, despite the potential for weather-related disruptions.
Key Takeaways
- Pico facility's production increased by 39% due to capacity expansion.
- Decrease in total revenues by $10 million year-over-year due to strategic RINs marketing decisions.
- RNG production at Texas facilities affected by severe weather, while Pico facility saw an increase.
- Sold Q2-generated RINs in Q3 at an average price of $3.32.
- Full-year 2024 outlook for RNG production and revenues reaffirmed, considering weather impacts.
- Cash from operating activities in Q2 2024 rose by 138.4%.
- Net loss reported at $0.7 million in Q2 2024, with a decrease in income tax expense by $11.6 million.
- Anticipated struggles with Houston's production in Q3 due to power outages.
- 2024 CapEx range adjusted to $84 million to $106 million, with Bowerman RNG project commissioning unaffected.
Company Outlook
- Montauk Renewables reaffirms its full-year 2024 guidance for RNG production volumes and revenues.
- The company's outlook considers historical weather events and projections for 2024.
Bearish Highlights
- Operating income for Q2 2024 decreased significantly by 93.6% compared to Q2 2023.
- Adjusted EBITDA for Q2 2024 decreased by $12.2 million compared to Q2 2023.
- A decrease in renewable electricity production and revenues was reported.
Bullish Highlights
- The Pico facility's increased production capacity has led to a notable rise in output.
- The company successfully sold previously unsold RINs at a higher average price in Q3.
- Cash from operating activities has seen a substantial increase compared to the previous year.
Misses
- Total revenues and revenue from the RNG segment both decreased due to strategic marketing decisions.
- RNG production decreased at Texas facilities due to weather-related issues.
Q&A Highlights
- The company discussed the impact of weather on production and how it informs their budgetary process.
- They explained their strategy for placing attributes directly with obligated parties.
- Montauk Renewables expects an increase in LCFS pricing due to upcoming rulemaking.
- The company addressed the variability in unsold RINs with a new table in their 10-Q filing.
Montauk Renewables' earnings call highlighted the dual nature of their second-quarter performance, with operational growth in certain areas being offset by strategic decisions and external challenges. The company remains optimistic about its full-year outlook, with ongoing development projects and a commitment to overcoming weather-related production issues. Despite a decrease in total revenues and net loss in Q2, the company's operational improvements and strategic sales of RINs in Q3 suggest resilience in their business model. Investors will be watching closely how Montauk Renewables navigates the anticipated weather challenges and whether their strategic decisions will lead to improved financial performance in the upcoming quarters.
InvestingPro Insights
Montauk Renewables (MNTK) has exhibited a mix of challenges and strategic movements in Q2 2024, as highlighted in the article. To provide further context on the company's financial health and market performance, we've gathered some insights from InvestingPro that may be of interest to investors.
InvestingPro Data shows that Montauk Renewables has a market capitalization of $608.87 million and is trading at a P/E ratio of 32.86, which suggests a relatively high valuation compared to earnings. The P/E ratio adjusted for the last twelve months as of Q2 2024 is slightly lower at 30.9. Despite the recent setbacks mentioned in the article, the company's revenue growth over the last twelve months stands at 3.77%, indicating some level of resilience in its operations.
Turning to InvestingPro Tips, two points stand out. Firstly, there's an expectation for net income growth this year, which aligns with the company's reaffirmed full-year guidance for RNG production volumes and revenues. This potential for growth could be a positive sign for investors looking for long-term value. Secondly, the Relative Strength Index (RSI) suggests that Montauk Renewables' stock is currently in oversold territory. This might indicate a potential buying opportunity for investors, especially if they believe in the company's ability to rebound from its recent challenges.
It's worth noting that there are additional InvestingPro Tips available for Montauk Renewables, which can be accessed at https://www.investing.com/pro/MNTK. These tips provide a deeper analysis that could help investors make more informed decisions regarding their investment in the company.
Full transcript - Montauk Renewables Inc (MNTK) Q2 2024:
Operator: Good afternoon, everyone, and thank you for participating in today’s conference call. I would like to turn the call over to Mr. John Ciroli as he provides some important cautions regarding forward-looking statements and non-GAAP financial measures contained in the earning material or made on this call. John, please go ahead.
John Ciroli: Thank you. Good afternoon, everyone. Welcome to Montauk Renewables Earnings Conference Call to review the Second Quarter 2024 Financial and Operating Results and Developments. I’m John Ciroli, Chief Legal Officer and Secretary at Montauk. Joining me today are Sean McClain, Montauk’s President and Chief Executive Officer to discuss business developments; and Kevin Van Asdalan, Chief Financial Officer to discuss our second quarter 2024 financial and operating results. At this time, I would like to direct your attention to our forward-looking disclosure statement. During this call, certain comments we make constitute forward-looking statements, and as such, involve a number of assumptions, risks, and uncertainties that could cause the company’s actual results or performance to differ materially from those expressed in or implied by such forward-looking statements. These risk factors and uncertainties are detailed in Montauk Renewables SEC filings. Our remarks today may also include non-GAAP financial measures. We present EBITDA and adjusted EBITDA metrics because we believe the measures assist investors in analyzing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles. Additional details regarding these non-GAAP financial measures, including reconciliations to the most directly comparable GAAP financial measures, can be found in our slide presentation and in our second quarter 2024 earnings press release in Form 10-Q issued and filed this afternoon, which are available on our website at ir.montaukrenewables.com. After our remarks, we will open the call to questions. We ask that you please keep the one question to accommodate as many questions as possible. And with that, I’ll turn the call over to Sean.
Sean McClain: Thank you, John. Good day, everyone, and thank you for joining our call. I’ll begin with updates regarding our ongoing development projects. As previously announced, we commissioned our digestion capacity increase at our Pico facility during the first quarter of 2024. Through the second quarter of 2024, our Pico facility has produced approximately 39% more MMBtu over 2023 as a result of this capacity expansion. While LCFS credit pricing remains at low levels, pending the ongoing rulemaking by the California Air Resource Board, we believe our facility is well-positioned to benefit should future credit prices rise. Also, as previously discussed, we continue to expect the dairy host to deliver the third and final tranche of increased feedstock during 2025. During the second quarter of 2024, we commissioned our first reactor for our swine waste to energy development project in North Carolina. We expect to operate this and additional reactors in 2025 once the electric utility interconnection is complete. In the interim, this first reactor will be operated to provide for various data collection and testing activities: test and refined feedstock conveyance, product gas composition, and material composition related to the micronutrient organic fertilizer solid fractionation. Also during the second quarter of 2024, we continued the process related to both the outbound electric utility interconnection and related power purchase agreements. These processes are interrelated, and we expect to successfully complete any interconnection construction activity to support our project timeline. During the second quarter of 2024, we have installed the majority of the required feedstock collection process equipment on two of the farms with which we have feedstock agreements. We continue to thoughtfully bring additional farms under agreement, targeting approximately up to 200,000 hog spaces to support our REC agreement with Duke. In August 2024, we received approval from the North Carolina Utilities Commission of our amendment to the New Renewable Energy Facility designation of our project received late in 2023 that provides for the generation of RECs. This approval is a critical path item in the timing of the utility infrastructure design and other balance of plant componentry of our Turkey, North Carolina facility. Development continues with our second Apex RNG facility, our Blue Granite RNG project, our Bowerman RNG project and our European Energy CO2 projects. We continue to manage through the required utility interconnection upgrades for the Blue Granite RNG project and do not anticipate meaningful additional capital expenditures for the remainder of 2024. As previously discussed, a catalyst for the second Apex RNG facility includes a gas rights contractual requirement triggered by increasing landfill waste intake, and in turn, gas feedstock availability that has periodically exceeded the processing capacity of our current facility. Upon commissioning of the second Apex RNG facility, we expect there to be a period of excess processing capacity that is subject to the rate at which the gas feedstock availability increases from landfill activities. Our profitability is highly dependent on the market price of environmental attributes, including the market price for RINs. As we self-market a significant portion of our RINs, a decision not to commit to transfer available RINs during a period will impact our revenue and our operating profit. We made a strategic decision to not transfer all available D3 RINs generated and available for transfer during the second quarter of 2024. As a result, we had approximately 4.7 million RINs in inventory from 2024 second quarter RNG production. We have since entered into commitments and have fully transferred all of these RINs during the third quarter of 2024 at an average realized price of $3.32, measurably higher than the average D3 index price for the second quarter of 2024 of $3.20. We have also since entered into commitments to transfer approximately 44.1% of our third quarter RNG production with an average realized RIN price of approximately $3.33. As part of our normal monetization activities, the company routinely queries the market for updates to potential off-take structures. Where we self-monetize the majority of our attributes under EPA-registered pathway sharing agreements, those agreements upon expiration are subject to changes in sharing percentages and other conditions that are negotiated during renewal. Though we have not yet experienced a significant increase to pathway attribute sharing arrangements, we may look to place more of our RNG volumes under fixed price contracts should contractual sharing percentages continue to increase. We are aware that the EPA expects to target March 2025 to propose renewable fuel standard obligations for 2026. The 2025 compliance year already has its renewable volume obligations set at 1.3 billion D3 RINs. Prior to the EPA setting volume obligations for the 2023 through 2025 compliance years, the EPA set RVO obligations annually. Given our history and industry experience, we believe that we are positioned to navigate any uncertainty with RVO rulemaking. And with that, I will turn the call over to Kevin.
Kevin Van Asdalan: Thank you, Sean. I will be discussing our second quarter 2024 financial and operating results. Please refer to our earnings press release and the supplemental slides that have been posted to our website for additional information. As Sean just noted, subsequent to quarter end, we have sold the 4.7 million RINs, which are generated but unsold as of June 30, 2024. The actual realized price for those RINs was $3.32, which compared to our D3 average realized price for the second quarter of 2024 of $3.12. The average index price of D3 RINs in the third quarter of 2024 is approximately $3.31. We have approximately 55.9% for the RINs we expect to generate from third quarter 2024 RNG production available for commitment. Total revenues in the second quarter of 2024 were $43.3 million, a decrease of $10 million or 18.6%, compared to $53.3 million in the second quarter of 2023. The decrease is primarily related to a strategic decision in the second quarter of 2024 to not self-market a significant amount of RINs from 2024 RNG production due to the volatility in the second quarter of 2024 D3 RIN index price. The decrease is partially offset by an increase in realized RIN pricing of approximately 44.4% during the second quarter of 2024 compared to the second quarter of 2023. Total general and administrative expenses were $8.7 million for the second quarter of 2024, flat compared to the second quarter of 2023. Our professional fees decreased approximately $0.3 million or 26.9% in the second quarter of 2024 compared to the second quarter of 2023. Employee-related costs, including stock-based compensation were $5.4 million in the second quarter of 2024, an increase of $0.2 million or 3.5% compared to $5.2 million in the second quarter of 2023. The increase is primarily related to the forfeited stock awards in the second quarter of 2023. Turning to our segment operating metrics, I’ll begin by reviewing our Renewable Natural Gas segment. We produced 1.4 million MMBtu of RNG during the second quarter of 2024, flat compared to 1.4 million during the second quarter of 2023. Our Texas facilities, McCarty, Atascocita, and Galveston collectively produced 47,000 fewer MMBtu in the second quarter of 2024 compared to the second quarter of 2023 as a result of severe weather causing widespread multi-day power outages across the Houston, Texas region. Our Pico facility produced 13,000 MMBtu more in the second quarter of 2024 as compared to the second quarter of 2023 due to the commissioning of our digestion expansion project. Revenues from the Renewable Natural Gas segment during the second quarter of 2024 were $38.8 million, a decrease of $9.8 million or 20.1% compared to $48.6 million during the second quarter of 2023. Average commodity pricing for natural gas for the second quarter of 2024 was 10% lower than the prior year period. During the second quarter of 2024, we self-marketed 10 million RINs, representing a 7.4 million decrease or 42.7% compared to 17.4 million RINs self-marketed during the second quarter of 2023. Average pricing realized on RIN sales during the second quarter of 2024 was $3.12 as compared to $2.16 during the second quarter of 2023, an increase of 44.4%. This compares to the average D3 RIN index price for the second quarter of 2024 of $3.20 being approximately 47.9% higher than the average D3 RIN index price for the second quarter of 2023 of $2.16. At June 30, 2024, we had approximately 0.4 million MMBtus available for RIN regeneration and had approximately 4.7 million RINs generated and unsold. We had approximately 0.4 million MMBtus available for RIN generation and had approximately 3.0 million RINs generated and unsold at June 30, 2023. Our operating and maintenance expenses for our RNG facilities during the second quarter of 2024 were $13.9 million, an increase of $2.2 million or 18.9% compared to $11.7 million during the first quarter of 2023. Our RNG facilities reported increased total segment utility expenses of approximately $0.3 million during the second quarter of 2024 as compared to the second quarter of 2023. Our McCarty facility operating and maintenance expenses increased approximately $0.5 million primarily related to the timing of gas compression system maintenance expenses. Our Rumpke facility operating and maintenance expenses increased approximately $0.5 million primarily related to gas processing equipment maintenance, media change-out and disposal costs. Our Apex facility operating and maintenance expenses increased approximately $0.5 million, primarily again related to the timing of preventive maintenance related to gas processing equipment. Our Coastal facility operating and maintenance expenses increased approximately $0.3 million related primarily to wellfield operational enhancements. We produced approximately 45,000 megawatt hours in renewable electricity during the second quarter of 2024, a decrease of approximately 4,000 megawatt hours or 8.2% compared to 49,000 megawatt hours during the second quarter of 2023. Our security facility produced approximately 3,000 megawatt hours less in the second quarter of 2024 compared to the second quarter of 2023 as a result of us ceasing operations in connection with the first quarter of 2024 sale of the gas rights at this location back to the landfill host. Revenues from renewable electricity facilities during the second quarter of 2024 were $4.5 million, a decrease of $0.1 million or 3.2% compared to $4.6 million during the second quarter of 2023. The decrease is primarily driven by the decrease in our security facility production volumes. Our Renewable Electricity Generation operating and maintenance expenses during the second quarter of 2024 were $4.7 million, an increase of $1.3 million or 37.3% compared to $3.4 million during the second quarter of 2023. Our Bowerman facility operating and maintenance expenses increased approximately $0.9 million, which was primarily driven by the timing of annual original equipment manufacturer preventative maintenance expenses, which are non-linear period-over-period. Our Tulsa facility operating and maintenance expenses increased approximately $0.4 million, which was driven by wellfield collection enhancements. During the second quarter of 2024, we recorded impairments of $0.2 million, a decrease of $0.1 million or 37.6% compared to $0.3 million in the second quarter of 2023. The specifically identified impairment losses in the second quarter of 2024 primarily relate to various RNG equipment that was deemed obsolete or no longer suitable for current operations. The second quarter of 2023 impairment relates to specifically identified machinery and feedstock processing equipment that were no longer in operational use. Operating income for the second quarter of 2024 was $0.9 million, a decrease of $12.7 million or 93.6% compared to $13.6 million for the second quarter of 2023. Our operating income was impacted by our strategic decision to not sell 4.7 million RINs generated but unsold during the second quarter when the average D3 RIN index price was approximately $3.20. RNG operating income for the second quarter of 2024 was $11.7 million, a decrease of $11.3 million or 49.1% compared to $23 million for the second quarter of 2023. Renewable Electricity Generation operating loss for the second quarter of 2024 was $2 million, an increase of $1.4 million compared to $0.6 million for the second quarter of 2023. Turning to the balance sheet. At June 30, 2024, $60 million was outstanding under our term loan. As of June 30, 2024, we had capacity available for borrowing under our revolving credit facility remaining at $117.5 million. During the second quarter of 2024, we generated $14.5 million of cash from operating activities, an increase of 138.4% compared to $6.1 million for the second quarter of 2023. Based on our estimate of the present value of our Pico earn-out obligation, we reported an increase of $0.4 million to the liability at June 30, 2024. This increase was recorded through our RNG segment royalty expense. For the six months of 2024, we incurred approximately $40.8 million in capital expenditures, of which $19 million related to our Montauk Ag Renewables development in North Carolina, $6.9 million to the second Apex facility, $6.7 million to our Bowerman RNG project, $1.8 million to the Blue Granite RNG project, and $1.3 million for our Pico digestion capacity increase. As of June 30, 2024, we had cash and cash equivalent of approximately $42.3 million and accounts and other receivables of approximately $22.0 million. Accounts receivable primarily relate to second quarter RIN sales comprising the majority of this balance, of which the majority was collected after June 30, 2024. Adjusted EBITDA for the second quarter of 2024 was $7 million, a decrease of $12.2 million compared to $19.2 million for the second quarter of 2023. EBITDA for the second quarter of 2024 was $6.7 million, a decrease of $12.2 million or 64.3% compared to EBITDA of $18.9 million for the second quarter of 2023. Net loss in the second quarter of 2024 was $0.7 million compared to a net income of $1 million in the second quarter of 2023. Our income tax expense decreased approximately 11.6% – decrease of approximately $11.6 million for the second quarter of 2024 as compared to the second quarter of 2023. The decrease is primarily related to interim tax provision calculations using our estimated annual effective tax rate against a pretax loss for the second quarter of 2024 as compared to the 2023 estimated annual effective tax rate applied against pretax income for the second quarter of 2023. I’ll now turn the call back over to Sean.
Sean McClain: Thank you, Kevin. In closing, and though we don’t provide guidance as to our internal expectations on the market price of environmental attributes, including the market price of D3 RINs, we are reaffirming our full year 2024 outlook provided in May 2024. For 2024, we continue to expect our RNG production volumes to range between 5.8 million and 6.1 million MMBtu, with corresponding R&D revenues to range between $195 million and $215 million. This range, though unchanged, accounts for impacts resulting from the hurricane which impacted the Houston, Texas region with widespread utility outages in July 2024. We expect our 2024 renewable electricity production volumes to range between 190,000 and 200,000 megawatt hours with corresponding Renewable Electricity revenues to range between $18 million and $19 million, also unchanged from our previous earnings call. And with that, we will pause for any questions.
Operator: [Operator Instructions] Our first question will be coming from Matthew Blair of TPH. Matthew, your line is open.
Matthew Blair: Thank you and good afternoon. You kept your full year production guidance for RNG the same despite some of the challenges in the second quarter with the power outages in Texas. Could you talk about how you are able to do that? And what are the bright spots in terms of areas that might be producing a little bit more than you expected? And then can I also ask, for the third quarter, you mentioned that you already monetized the 4.7 million of RINs in inventory. But do you expect to monetize all of the RINs that you produce in the third quarter? Or is there a chance that you might hold back some of the Q3 production from sale as well? Thank you.
Kevin Van Asdalan: Thanks, Matthew. Yes, we are anticipating this question in regards to our holding guidance though we’ve had two consecutive quarters with weather impacts predominantly impacting our Houston region, which generates, give or take, about 50%. So what we do, we set our budgetary expectations with where we think the year is going to go in regards to production impacts. We expect wellfield investment to drive production increases. Though we have had those two quarters of weather impacts, we go through various sensitivities and historical look back in regards to at the beginning of the year what landfill hosts tell us their landfill expansion plans are going to be. And then we try to go through various sort of discounting, if you will, or delay impacts for what that expansion may look like at various sites. And then in regards to why we believe the second half of the year is still going to develop in appreciable volumes holding that guidance is we’ll take a look at our budgeted expected capital expenditures into our wellfield as compared to what we’ve actually incurred. We still have enough runway left in the rest of this year that we believe we’ll get some meaningful uplift from the capital that we anticipate investing into our wellfield at certain of our sites, as well as some of the ongoing and known optimization enhancements that we’re doing either through wellfield collection or within our plants that will not necessarily be solely related on our landfill host expansion activities in regards to the guidance ranges. While we know that our Houston region has been impacted by weather events in the previous two quarters, we believe that our existing guidance from an R&D production standpoint takes into account those impacts in the second and third quarter.
Sean McClain: I can take the piece regarding the timing of RIN monetization. How I would like to answer it is the decision as to whether or not we’ll monetize is a function of our prioritization to have those attributes to be placed directly into the hands of the obligated parties. Rather than tying it to ebbs and flows and pricing, although it is a consideration as we look at what is readily available in the marketplace, news from the EPA, recent pricing trends, but the leading driver is the purchasing cadence of the obligated parties. The way in which we manage our cash flows and our available cash and our borrowing facilities affords us the opportunity to take those attributes and place them where they belong, which is in the hands of the obligated parties, not to intermediaries that may hold those in the hopes that they’re able to extract the margin as they ultimately place those into the hands of the obligated parties. That will drive any decisions that we have as to what we hold coming in and out of any particular quarter and the volumes at which we would delay.
Kevin Van Asdalan: And then one other note, Matthew, is that obviously, we’ve had conversations and we take into consideration the feedback that we’re getting. And knowing that our 10-Q was just hit EDGAR right before the call, we have included a new table that is trying to help people like you to see the variability or volatility in regards to RIN that we may or may not have generated but unsold at any given quarter.
Operator: And our next question will come from Saumya Jain of UBS. Your line is now open.
Saumya Jain: Hey, how are you guys looking at any potential changes in LCFS and RIN prices? Just given upcoming elections, how do you factor in both potential activities or outlook?
Kevin Van Asdalan: I would – I guess I would first respond that we generally don’t provide guidance in regards to our internal expectations for the price of environmental attributes. We are all very aware that CARB is going through various rulemaking. I believe there’s a – the next meeting for CARB is in November, I want to say, where we expect some voting on rulemaking to impact, I believe, 2025 and the overall program’s emission reduction targets. We’re bullish that those – that, that rulemaking will be beneficial and have an appreciable increase in LCFS pricing. But as with other regulatory outcomes, the devil is in the details. And we believe that when that LCFS credit pricing increases, certain of our sites, notably Pico that will be primed to benefit from an eventual uplift in LCFS credit pricing.
Operator: And our next question will be coming from Paul Cheng of Scotiabank. Your line is open.
Paul Cheng: Hi, good afternoon. Hey Sean, can you tell us what is the second quarter weather impact on the production? And also that in your full year guidance or in prior third quarter, that have you built in any expectation for the hurricane season? Thank you.
Kevin Van Asdalan: Yes. Thanks, Paul. I know that you asked Sean, but I’ll answer that very quickly. We estimate that the approximate impact across the Houston facilities in the second quarter was around 47,000 direct impact in the second quarter. And in the third quarter, I would say that we’re probably seeing a similar expectation of struggles on production out of Houston. I want to say that generally, in the second quarter, those power outages were approximately five to eight days. And then I believe that, that sort of approximation of widespread power outages from the hurricane in July was, again, about five or eight days or so, depending upon the region of Houston.
Paul Cheng: Yes, because I mean, the national weather center is predicting this is going to be one of the perhaps the most happy hurricane season. So I’m just curious whether you guys built in some additional downtime in your forecast. And also that when you’re talking about your current full year, so what is the biggest risk for you not to hit that target?
Sean McClain: The process by which we would incorporate future weather impacts is at least initially rooted in our historical outages or our unplanned outages associated with utility outages or direct impact from weather events, indirect or direct. That budgetary process has a natural component that you’re taking the total capacity that is available for production, and you are taking into consideration the sort of the average that you’re seeing or the trend, rather, that you’re seeing in those weather phenomenon. Now although there may be speculations that suggest that this will be the most active hurricane season, there has been an increasing trend that you see in those weather phenomenon. And so the projections that we put in place, albeit the optimistic side where you are placing investments, as Kevin mentioned, into the wellfield, the timing of landfill operations that you’ll see the positive lift that, in this case, has allowed for us to maintain with confidence our full year guidance, you do see that trend that will increase the impact of the weather events that we put into our projections for 2024.
Operator: And our next question will be coming from Matthew Blair of TPH. Your line is open.
Matthew Blair: Hey, it’s Matthew again. Thanks for taking the follow-up. Just looking through the Q, it looks like your 2024 CapEx range is down to $84 million to $106 million from the $149 million to $167 million previously. But looking at the table of projects, the start dates for your four major growth projects are all the same, all unchanged. So could you talk about what’s changing on the CapEx side? Are you pushing anything out or why is this year’s CapEx number coming down? Thanks.
Kevin Van Asdalan: Yes. Matthew, that’s specifically in regards to the Bowerman RNG project and primarily related to one significant component associated with that. It’s solely a – we expected a large outlay for one component to come in the third or fourth quarter of 2024. We have now anticipated that outlay to be pushed into 2025. It’s a timing issue with – out of a period this year into next year, which we do not anticipate to impact the overall commissioning of our Bowerman RNG project. So it’s solely a function of sort of vendor expected timing with that particular project.
Operator: [Operator Instructions] I would now like to hand the call back to Sean for closing remarks.
Sean McClain: Thank you, and thank you, all for taking the time to join us on the conference call today. We look forward to speaking with you when we present our third quarter 2024 results.
Operator: And this concludes today’s conference call. Thank you for your participation. You may now disconnect.
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