Disclaimer: This article does not guarantee the accuracy of the data presented. Readers are advised to verify all information directly with Calumet Inc.
INDIANAPOLIS, Nov. 8, 2024 – Calumet Inc. (NASDAQ: CLMT), a leading producer of specialty hydrocarbon and renewable fuels, announced its third quarter 2024 financial results, reporting a net loss of $100.6 million. Despite this, the company achieved notable milestones, including record Sustainable Aviation Fuel (SAF) production, a successful transition to a C-Corporation, and a conditional $1.44 billion loan commitment from the U.S. Department of Energy (DOE) for its Montana Renewables (“MRL”) project.
Financial Performance Overview
For the third quarter ending September 30, 2024, Calumet reported a net loss of $100.6 million, or $1.18 per share. Adjusted EBITDA reached $49.8 million, reflecting the impact of strategic investments and developments across various business segments.
The transition from a Master Limited Partnership (MLP) to a C-Corp, successfully completed earlier this year, marks a critical milestone in Calumet’s structural and operational transformation. This shift is expected to better position the company for future growth and align with its broader goals of expanding its renewable energy and specialty fuels business. The transition is especially timely given Calumet’s recent operational achievements and its secured conditional commitment for DOE funding, which is anticipated to fuel Montana Renewables’ ambitious SAF production expansion.
Segment Performance
Specialty Products and Solutions (SPS): The SPS segment achieved Adjusted EBITDA of $42.6 million, a 10% increase from $38.6 million during the same period in 2023. Strong production in the segment helped offset interruptions from Hurricane Beryl in July, which led to temporary downtime. SPS continues to leverage high-demand markets, capitalizing on the growing need for specialized products across consumer and industrial applications.
Performance Brands (PB): The PB segment reported a slight improvement in Adjusted EBITDA at $13.6 million, compared to $13.2 million in Q3 2023. The increase was driven by 19% year-over-year growth in volumes, reflecting the strength of Calumet’s portfolio in high-margin, branded products across automotive, industrial, and consumer markets.
Montana Renewables (MR): Despite challenges, Montana Renewables (MR) posted a new quarterly production high for SAF, underscoring the company’s commitment to sustainable fuel production. The segment’s Adjusted EBITDA, however, dropped to $12.7 million, down from $38.2 million in the prior year. The decline reflects tighter fuel spreads impacting specialty asphalt. To further enhance operations, the Great Falls facility is undergoing a planned turnaround, including a catalyst change, aligning with shifts in market conditions and federal incentives, such as the anticipated adjustment of the blenders tax credit to a production tax credit model.
Strategic Developments
$1.44 Billion DOE Loan Commitment
On October 16, 2024, Calumet announced a conditional loan commitment from the U.S. Department of Energy’s Loan Program Office (LPO) to support expansion at Montana Renewables. This $1.44 billion commitment will finance projects that will bolster MRL’s SAF capacity, targeting a production volume of approximately 300 million gallons annually. The expansion includes a second renewable fuels reactor, the debottlenecking of feedstock pretreatment units, installation of additional SAF blending assets, renewable hydrogen production, and advanced water recycling capabilities.
C-Corporation Transition
Calumet officially transitioned from an MLP to a C-Corp, a change overwhelmingly approved by over 99% of unitholder votes at a special meeting held on July 9, 2024. This structural shift positions Calumet for greater operational flexibility, enabling it to attract a broader range of investors and further pursue its renewable fuels strategy. “Our conversion to a C-Corporation structure allows us to streamline operations and access a wider array of capital sources,” remarked CEO Todd Borgmann. “This evolution is a testament to our commitment to creating long-term shareholder value.”
“We are honored that Montana Renewables can help solidify our nation’s position as a global leader in one of energy’s fastest-growing markets.” – Todd Borgmann, CEO
Operational Highlights
SAF Production Record: Montana Renewables set a new record for SAF production, establishing itself as a formidable player in the renewable fuels market. This accomplishment reflects Calumet’s dedication to positioning itself at the forefront of the SAF market, which is increasingly critical in the global push toward net-zero aviation. SAF’s role in decarbonizing the aviation industry is underscored by regulatory support, including the U.S. federal government’s 2030 SAF Grand Challenge to achieve 3 billion gallons of SAF production annually by 2030.
Infrastructure and Operational Enhancements: To meet growing demand, MRL is executing an infrastructure upgrade, involving the addition of cogeneration for renewable electricity and steam, as well as site enhancements aimed at bolstering production efficiency and environmental compliance. These measures, expected to be completed by 2026, will allow MRL to unlock approximately 50% of its 300 million-gallon SAF capacity and address emerging market needs.
Financial and Operational Summary
- Net Income (Loss): Q3 net loss of $100.6 million compared to a net income of $99.8 million in Q3 2023.
- Adjusted EBITDA: Reached $49.8 million in Q3, reflecting disciplined spending on essential upgrades and operational investments.
- Total Sales Volume: Increased to 92,275 barrels per day from 82,787 in Q3 2023, illustrating a marked improvement in production efficiency.
Nine-Month Results
For the nine months ending September 30, 2024, Calumet reported a cumulative net loss of $181.3 million. Adjusted EBITDA for the period was $138.2 million, down from $220.8 million in the same period last year, reflecting the challenges of cost volatility and temporary production adjustments.
“These new operational milestones and continued execution against our strategic initiatives support our relentless focus on driving shareholder value.” – Todd Borgmann, CEO
Outlook and Future Plans
Looking ahead, Calumet is focused on completing the Montana Renewables expansion and integrating new production technologies to boost its SAF output further. The anticipated $1.44 billion DOE loan provides a solid foundation for scaling SAF production to meet both domestic and global demand, positioning MRL as one of the world’s leading SAF producers.
About Calumet Inc.
Headquartered in Indianapolis, Calumet Inc. is a diversified producer of specialty hydrocarbons and renewable fuels. With a network of twelve facilities across North America, Calumet is committed to innovation in specialty products and renewable fuels. Through its Montana Renewables facility, Calumet is advancing the United States’ sustainable aviation fuel capabilities and driving environmental sustainability across the energy sector.
