Q3 2024 Ecovyst Inc Earnings Call
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Good morning, my name is Jim and I will be your conference operator today. Welcome to the EcoVist 3rd quarter, 2020, 4 earnings call and webcast. Please note today's conference is being recorded and should run approximately one hour.
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I would now like to turn the conference over to Gene Shields Director of Investor Relations. Please go ahead sir.
Thank you, Jim. Good morning and welcome to Eek of a third quarter, 2024 earnings call.
with me on the call this morning, or Kurt Bitting, E.K. V. Chief Executive Officer, and my P.N. E.K. V. Chief Elefator. Following our prepared remarks this morning, we'll take your questions.
The first time I've seen you in the movie, I've seen you in the movie.
Please note that some of the information shared today is forward looking information, including information about the company's financial and operating performance strategies, are anticipated in use to manage and are 2024 financial outlook.
This information is subject to risks and uncertainties that could cause the actual results and the implementation of the company's plans to very materially. Any forward-looking information shared today speaks only as of this date. These risks are discussed in the company's filings with the SEC.
Reconciliation of non-gap financial measures mentioned in the Smorning's call with their corresponding gap measures can be found in our earnings release and in the presentation materials posted in the investor section of our website at ecovis.com.
Well now turn the call over to Kurt Bitting. Thank you, Jean, and good morning.
Against the backdrop of a challenging macro economic environment, EcoVist third quarter financial results were in line with our overall expectations.
Our Eco-Service Disagament continued to exhibit resilience with positive demands on the mental contributing to another quarter of solid performance.
During the quarter, high refinery utilization and attractive outlet economics continue to support demand in our regeneration services business, where contractual pricing increases contributed positively to the segment profitability in the quarter.
The first one is the first one. Although demand remains soft and certain industrial end uses, third quarter sales volume for virgin sulfuric acid increase compared to the prior year. We also continue to see strong demand in our Chem 32 catalyst activation business with volume also up year over year.
In our advanced silica's business, sales of silica's used in the production of polyethylene, increased in the third quarter, and we remain on track for polyethylene catalyst sales to be up in 2024 compared to 2023.
with in the zealous joint venture, sales of hydrocracking catalysts were up in the third quarter. However, sales of specially catalysts in the third quarter were lowered, then we had initially expected due to timing, as we saw some sales slip from the third quarter into the fourth quarter due to minor logistical delays.
Cash Generation remained positive in the quarter, providing for a modest reduction in our net debt leverage ratio.
As we turn to slide six, I'll provide an update on our near-term demand outlook.
for EcoServices, we believe the outlook remains positive.
Taking into account plan seasonal turnaround activity for our refining customers. For the balance of the year, we expect stable activity for our regeneration services business.
Looking forward, we continue to expect that high refinery utilization, in favorable outlet economics will continue to benefit demand for regeneration services, particularly from our customers who operate some of the largest scale refineries in the Western Hemisphere.
ECOVIS Regeneration Contracts offer substantial earnings stability due to their long-term nature, cost-pass through mechanisms and capacity reservation fees.
Turning to Virgin Self-Euric acid, although we remain cautious about the potential for near-term weakness in the industrial demand to adversely impact sales, particularly for spot sales and sales under short-dated contracts.
We continue to believe the long-term outlook for Virgin Sophia Cassid remains very positive.
As one of the most widely used chemicals, so if you're a gas-ed-place, a critical role in a wide range of industrial and petrochemical applications and processes.
Ecoservices quality and robust network continues to make us a preferred supplier to leaders in a wide range of industrial applications including mining and the production of nylon intermediates.
KM32 and Treatment Services provide our customers with unique and high-value services. And we maintain a positive demand outlook for both segments.
For Chem32 Catalyst Activation, we expect demand to remain strong through 2024, and we are seeing high levels of interest in activation services well in the 2025.
As we have discussed previously, we are taking steps to significantly expand our capacity at the Orange Texas site to serve the growing demand we see for ExitU cattle's activation.
Turning to advanced materials and catalysts for sales of polyethylene catalyst and catalyst supports the weak global economy continues to constrain growth in global polyethylene demand.
However, we remain aligned with major producers.
Both in the cost-advantaged US and Middle East. We remain positive on the long-term sales outlook for our polyethylene catalysts, given how our customized catalyst approach has enabled us to win at the key expansion projects in the US and Middle East.
We expect sales growth for the full year as well as into 2025 and beyond to be supported by the ongoing expansion of polyethylene cattle's production capacity at Arcana City site, which is on track for completion by the end of next year.
The expansion is backed by firm customer commitments for expansion projects that are expected to ramp in 2026 and 2027.
In addition, we continue to leverage our research and development capabilities to expand our advanced silica's portfolio for high-growth bio-câtelic applications.
Customers continue to qualify our products for fruit processing applications with very positive feedback and we expect these qualifications to translate into additional sales in 2025.
For the ZLAS joint venture, we continue to expect a 2024 will be a strong year for the sales of hydrocracking catalysts, although we do not expect to repeat the peak sales levels we saw in 2023.
In terms of longer-term growth expectations, we continue to believe our mock technology. His gaining market share as it offers refineries valuable production flexibility.
For ourselves of catalyst materials into sustainable fuel production, there has not been a significant change in market dynamics from the view that we shared with you in early August.
We see the current low value for Rins and the adverse and impact of inflation on construction costs Continuing to weigh on near-term project economics for incremental renewable diesel capacity.
Absent improved producer economics in the short term. We continued to expect weak demand conditions for catalyst material sales into renewable diesel over the next 12 to 18 months.
In a long term, we maintain that the introduction of sustainable aviation fuel is the only viable near-term solution for airlines to achieve decarbonization.
We expect that sustainable aviation fuel will begin to ramp up at the end of 2025 and the beginning of 2026. We believe our ZEO-Lite Technologies for both the waxing materials and aglivernization catalysts are well positioned as key enablers for the industry.
For sales as a mission control catalyst, our outlook has also not changed materials and materialy since August.
Global sales for heavy duty diesel vehicles remain depressed.
Due to the weak macroeconomic environment and high interest rates. In addition, the deferral and implementation of more stringent emission requirements under year-old seven has been delayed, and this is another contributing factor to the weak vehicle sales.
Lastly, we remain aligned with key players developing advanced recycling technologies, working towards customer plant trials.
with a solid technology offering we believe we are well positioned for future growth. I'll now turn the call over to Mike for a more detailed discussion on our financial results for the third quarter.
Mike: Thank you, Kurt. Sales for the third quarter, including our proportion at 50% share of sales from the Zelis joint venture, we're $210 million, unchanged compared to the prior year.
Ecoservices sales were up approximately 4%. Largely driven by high, higher volume of virgin sulfuric acid and favorable contractual pricing for regeneration services.
Fails for advanced silicons decreased modestly as the benefit of higher sales volume for polyethylene catalyst and catalyst supports was all set by the comparative timing of event-driven niche-custom cattle sales.
Sales for the zealous joint venture were lower as higher sales of hydrocracking catalysts, were more than offset by a decrease in sales of catalyst materials used in the production of sustainable fuels and emission control applications.
The recorder adjusted the dividend with $60 million compared to $68 million in the prior year.
with the decrease primarily drifted by the lower sales within the deal is joint venture, all setting the higher earnings from EcoServices and advanced silica.
Moving to the next slide, I'll highlight the major components of the change in the Joseph D. Bitter.
As we anticipated and discussed in our second quarter earnings call, the unsavvable period over period met pricing impact in the second quarter, associated with the contractual paths through of energy and other index costs within these services is behind us.
The price to variable cost ratio in a third quarter was positive.
Mike: with net pricing accounting for approximately $3 million. Driven largely by strong contractual price increases for regeneration services.
However, the lower sales volume of high margin catalyst used in the production sustainable fuels drove a less favorable sales mix within the Zelis joint venture impacting a Jussi di Bita in the year over year period comparison.
The balance of the change in the justice debaura relates to higher costs, including higher-planet manufacturing and maintenance spending within eco services, costs associated with our reliability initiatives, as well as other costs, including certain employee-related costs.
I'll now cover the highlights of our segment results starting with the Go Services.
Mike: 3rd quarter sales for EcoServes was $154 million, up 4%.
Drivers of the increase include higher sales volume for birds and sulfuric acid and favorable contractual pricing for regeneration services.
Mike: Fire Comparative Volume for our Ken 32 cattle activation business was also a contributing factor.
3rd quarter of Jocadaeva for Eco Services
was up modestly compared to the prior year. As the higher volume and increased pricing was largely all set by higher manufacturing costs.
Mike: Associate Within Flation.
and increased plan maintenance costs and costs related to our liability initiatives, which have resulted in a marked increase in operational efficiency.
As we previously discussed, we expect the improved operational efficiency of our reliability program to translate into enhanced capacity and ability to serve growth in demand for our products and services.
Mike: Moving to Advance Materials and Catalyst.
Mike: 3rd quarter sales for advanced silica was $25 million.
Mike: A slight decrease compared to the prior year. The mod of decrease reflects higher sales volume for catalysts, using polyethylene production. Offset by the timing associated with sales of niche custom catalysts.
Mike: Our proportion at 50% share of sales from the zealus joint venture was $31 million. Down compared to the prior year, as higher sales of hydrocracking catalysts were offset by the lower sales of cattle since years used in the production of sustainable fuels and emission control applications.
Mike: Third quarter of JSD, but out for the Advance Materials and Catalyst segment, was $11 million. Compared to $60 million in the prior year, driven by the lower sales volume within the Z-List joint venture.
As we moved to Cache and Leverage, the third quarter was another quarter of favorable cast generation.
Mike: For the first night, months of the year, adjusted free cash flow with nearly $60 million, compared to $20 million in the prior year. Primarily driven by the timing of dividends from the Theeless Joint Venture and favorable changes in working capital.
We ended the third quarter with approximately $123 million of cash and our available liquidity was $188 million, including availability under our ABL facility.
Our net debt leverage ratio, a quarter-end with 3.2 times, down from 3.3 times as of the end of the second quarter.
Mike: Based upon our expectations for cast generation for the remainder of the year, and excluding any discretionary use as a cash, we expect to end the year with a net leverage ratio of approximately three times.
As a reminder, our target net leverage ratio is between two to two and a half times.
I'll now turn to our outlook for the fourth quarter and full year 2024.
As Kurt noted, our third quarter financial results were in line with our expectations, and while adjusted to the third quarter felt toward the lower end of our guidance range.
This was largely due to the timing associated with specialty cattle disorders within the Zelis joint venture with some sales shifting from the third quarter into October.
For the full year 2024, we are maintaining our previous guide ranges for gap sales of 700 to 740 million dollars.
Sales for our proportion, 50% share of the zealus joint venture of 115 to 135 million dollars.
and for a Jocelyn Bita of 230 to $245 million.
As we have previously discussed, the sales of certain products within advanced materials and cattle segment can be lumpy at their often large event driven sales.
Single orders of these cattle assails can be large in the timing of when the revenue is recognized can be relevant to specific quarterly results.
The range takes into account the lumpiness of our sales and advanced materials and catalysts and acknowledges a range of outcomes in our first and sulfuric gases and polyethylene business given the current industrial demand outlook.
In terms of the specific outlook for the fourth quarter.
We see continues to build in our eco services business.
As such, our expectations for the full year just at EBITDA for the Eco Services segment remain in the range we provided in our second quarter earnings call, which was $195-2005 million.
and this would imply fourth quarter of just a debat of approximately $54 million at the midpoint of the guidance range.
Mike: Last quarter, we also provided a full year range for our advanced materials and catalyst segment of $65-$70 million.
Prior guidance incorporated our expectations for timing of certain niche custom cattle sales with heavy waiting in the fourth quarter, implying a fourth quarter just a debat for the segment in the $30 million range.
However, in light of continued uncertainty around the sales of catalysts used in the production of sustainable fuels and emission control applications, and the timing of certain catalyst sales, full year results for advanced materials and catalysts could be slightly below our target.
Mike: However, this would be largely all set on a consolidated adjusted eave to basis by favorability and corporate costs.
I will now hand the call back to Kurt for some closing remarks.
Thank you, Mike.
I want to make a few comments on our safety and sustainability efforts.
The Responsible Stewardship of our facilities and products is a core value at EcoVist. During the past two years, EcoVist has made significant investments and time and resources across our safety and environmental programs.
These investments, along with the superb efforts of all of our EcoVis colleagues, has resulted in top quartile safety performance and our Platinum EcoVada's sustainability rating for 2024.
I'm confident that EcoVis hyperfocus on stewardship will continue to yield outstanding safety and environmental performance, which helps us retain a strong connection to our strategic plan and stakeholders.
Finally, as we look to deliver on our financial commitments for 2024, our capital allocation focus remains on positioning eco-vis for differential growth in the future and delivering value for our shareholders.
As such, we are continuing to implement the strategic plan we outlined last year in our investment day.
We continue to see compelling opportunities across our businesses to strengthen our portfolio and improve the resiliency of our earnings. Consequently, we are investing to capture these organic and inorganic growth opportunities.
We are currently investing in the expansion of our polyethylene cattle's production capacity at our Kansas City site.
and the expansion of our cattle activation capacity within Camp 32.
Mike: Both projects remain on budget and on target to support expected future growth in demand.
Mike: In addition, the reliability initiatives within our Eco Services segment that we outlined in our investor day last year have already resulted in significant increases in our operational efficiency.
Mike: As we have discussed, we expect these initiatives will provide for overall improvement in plant operating rates and therefore expanded capacity to serve expected growth in demand for both virgins of youric acid and for regeneration services.
We also remain interested in inorganic growth opportunities that would closely complement our existing businesses, provide attractive synergies, enhance our capacity and capabilities and increase our earnings, resiliency and growth profile.
ECOVisibility, a generate cash provides long-term investment potential in both organic and inorganic opportunities.
As Mike mentioned earlier, a primary goal of our current capital allocation strategy is to reduce our net leverage ratio to a target range of two to two and a half times. They're by enhancing our balance sheet flexibility to capture future growth opportunities.
In summary, we remain intently focused on growth and value creation for our shareholders. We see compelling opportunities across our portfolio and we believe this strategic plan we have outlined will allow us to deliver on our growth expectations.
Thank you and at this time I will ask the operator to open the line for questions.
Gentlemen, thank you, and to our phone audience joining if you would like to ask a question, please press the star and one on your touchtone phone. You may remove yourself from the queue at any time by pressing the pound key.
Speaker Change: or excuse me, Star N2 rather. Once again that is Star N1 to ask you question today ladies and gentlemen. Also a reminder, please return to your handset to provide the best audio quality for today's questions. We'll hear first from Patrick Cunningham at City.
Patrick Cunningham: Hi good morning.
Just curious on your early thoughts for 2025, you know, both from an end-market standpoint. And then you mentioned a lot of things in terms of items in your control, whether it's benefits from the reliability program.
Pat the addition and potentially some add-back from maintenance costs you incurred in 2024. So maybe just, you know, both in terms of the market setup as well as items in your control.
Speaker Change: Yeah, thanks Patrick. I think you'll we're not really guiding here for 2025, but as we look at
Speaker Change: You know, the overall landscape, you know, eco services continues to, you know, operate, you know, in terms of regenerative, our regeneration services at a high utilization rate.
Patrick Cunningham: So we expect volumes to remain strong there as well as as we contract scroll off and we repricen. We expect continued pricing power in that segment.
Virgin's Sulfuric acid while there has been some pockets of weakness in certain industrial segments.
on balance that's operating really as we expected and globally the reported Virgin Sulfuric acid prices have risen here in the last.
Six months and we would hope and think that continues on into 2025. And for advanced materials and catalysts really, you'll continue to offer really high value products to our customers that deliver.
You know, deliver really customized, you know, polyethylene solutions for some of the largest producers and we expect, you know, that will continue to be the case going forward.
Got it. And then, you know, 4-2 guy was very helpful. It doesn't fly someone of a healthy step up, but I think you, you know, called out the catalyst warmer, order time and being the biggest part of that.
Is there anything else in terms of, you know, flows through of price caught that Ego services, you know, being a big component, potentially off betting from seasonality there? Just wondering why we're sort of flat in a seasonally weaker period on the Ego service side.
Speaker Change: Yeah Patrick, for the EcoServices, traditionally what we see is the first quarter and the fourth quarter usually being a little lighter than the second and third.
Speaker Change: So actually having a call it an implied guidance range of 54, you know, I think that's a 10% increase compared to the prior year, right? So I think the balance for the fourth quarter of Riko Services is...
is going to be relatively in line with our expectations. And on the AMNC business, we do expect polyethylene to be up year over years. We've talked about in the past.
Speaker Change: and Hydrocracking was a big component in the fourth quarter of last year, but that'll be largely all set by the polyethylene increase year over year, along with some of the other custom catalysts and niche custom catalysts that we expect to see in the fourth quarter.
Thanks for watching, I'll back around.
David Biglider at Deutsche Bank, your line is open. Thank you, good morning. Kurt and Mike, on the leverage, you expect to be at your leverage target by the end of 25.
Yeah David, we're we are expecting as we said to have a good cast generation this year, right? So our free cash flow guidance.
Patrick Cunningham: has a midpoint of $80 million which would be an increased compared to the prior year and then we do expect to end the year around the three times leverage. We're not given specific guidance into next year but in the past I would say that we've talked about being able to deliver about a half a turn of year.
So our target range of two to two and a half times would be certainly within the range if we continue down that path and generate a good amount of free cash flow each year.
Speaker Change: for a good and just in Q3, what was the impact from Hurricane Beryl in the quarter?
Yeah, the impact was a few million dollars. So it did impact the results, but not quite as materially as some of the other hurricanes and weather events that we've seen in the past, particularly in early 2023.
Speaker Change: And just last thing about the bridge at 25, beyond barrel, any other one of impact you could call out that would help bridge to a growth next year.
Yeah, the one other thing Kurt talked a little bit about the end-market and the drivers of growth. The other thing we talked about this year having a higher step up in some of the cost and eco services, particularly around the reliability program and the higher turnaround cost.
Speaker Change: So that would have been a bit of a step up and you wouldn't see that same increase going into next year But at the same time we do continue to maintain higher cost in that business, you know, for reliability and turnaround that inflation and you know, keeping our maintenance cost at a relatively appropriate level for future growth of that business
Speaker Change: and as we talked about that reliability program does help act capacity so it will help support the growth of that business for many years out.
is it also a few million dollar impact in terms of this year versus next year?
Yeah, I think when we gave the original guidance for 23 going into 24 we talked about, you know, a roughly five to ten million dollar change, right? So you wouldn't see that same change going into next year.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Alexie Yiframalva at Keybank Capital Markets.
Thanks for coming today everyone. I just wanted to stay in the subject of a reliability program on Clare 5.
Speaker Change: So I think you mentioned that your happy was found as reliability program is performing thus far in the UC the best sense.
are these benefits more in the potential capacity when Jimmy and I proves because if I just look at the data, I'd sort of hard to see it right now, maybe even explain.
Speaker Change: Thanks for the question, Alex. I think the reliability efforts have really, it's an enhancement year over year from last year of 2023. And it has enabled us this year. I mean, we believe that we're going to be up.
Speaker Change: here over year on our Virgin South-Euric acid sales. So it's benefited us there, but there's still work to be done. I mean, it's a multi-year initiative where we're using, you know, we have additional reliability team.
Speaker Change: We've improved our...
Speaker Change: Art maintenance schedules, we've also are using automation to conduct reliability models.
So the combination of those efforts across the multi-year period will leave, we believe will.
Equate to incremental self-ureg acid capacity, which allows us to take advantage of those hot weather that high operating leverage and produce additional evita. So we believe you'll see that as time goes on you'll see that incremental capacity that comes from the reliability program we'll meet up with.
the higher version self-your-agasted demand that we see long term.
and I guess next year again, based on what you said in the prior two questions.
I'm assuming you would expect eager services pricing to be up if you could confirm that's the case and also if that pricing crease would be higher than the increase in cost.
Speaker Change: Excluding the transfer.
Yeah, and I like that took a good question. We're not providing real specific guidance for next year, but I would say that as we talked before, the pricing mechanism with an eco-services.
you know, is quite strong with the long-term nature of some of the contracts.
the ability to reset the base price.
you know when those contracts run out
So we'll continue to see that in part of our growth story in that business, as both a volumetric growth as well as pricing. So we do expect next year and over the coming years as part of our long-term strategy to continue to see growth both on the volume and pricing side.
Okay, thanks a lot.
John McNulty with BMO Capital Market, please go ahead with your question.
Yeah, thanks for taking my question. So, on the catalysts first sustainable fuels, obviously things are taking a step back. Are there things you can do from a belt tightening perspective?
and you're considering it this point because it does sound like this is something that may not recover in the next year, may not recover in the next couple of years based on as least some of your commentary. So I guess can you help us to think about maybe some of the levers you can pull to help with the profitability around that particular part of the platform?
Good John, thanks for the question and I think as just really as we said on the call, you know, our...
Speaker Change: Position on sustainable fuels has changed, and we still let you that as 12 to 18 months.
Speaker Change: Type of timeline I'm recovery just because of the...
and provide the man in balance that currently exists in the marketplace there. I would point you to in Q2 and Q3. We can do cost reductions at our advanced materials and catalyst facilities where we address costs as they are produced.
particularly at the North American level. But we're limited in what we can do there because a lot of the assets are fungible with other catalyst products that are non-renewable, right? But they're all making similar intermediates. So we've already taken a pretty strong approach to that in Q2 and Q3, which is starting to roll through.
Got it fair enough. And then I guess just a question on cash and leverage.
You're leveraging improvement and you're not at the target that you want to get to. But your cash balance on the balance sheet actually.
getting pretty chunky at this point at a, whatever 125 million, it looks like it should go up even more in 4Q. So I guess can you speak to the use of that cash? And also...
If you see M&A opportunities starting to materialize, I think a lot of assets were off the market for a while, but it does seem like in some...
Speaker Change: Samaris, we're starting to see them come back. Do you see a pipeline getting more full in your mind, or is that not something you're really considering at this point just given the leverage?
Speaker Change: Direct of...
That's a good question, John. I think in the past we've maintained a pretty flexible capital allocation strategy and this is included, you know, share repurchasing while we've delivered and we've maintained leverages as a key priority. But as outlined, you know, in our investor day.
Speaker Change: and I think what we said today on the call, we're going to focus on our capital allocation really on growth.
and maintaining that balance sheet flexibility to fund that growth. And we really feel that's the best way to deliver long-term shareholder values. So we've got really good organic growth opportunities that we want to continue to fund.
and we also, to your point, we were doing our main interest in inorganic growth opportunities. I would say, are more bolt-on in nature and would complement the existing business really adding.
Resilience and Strengthening are our future of growth potential.
in terms of their availability, I mean, clearly um...
It was a very slow I would say over the last 12 to 18 months
Speaker Change: [inaudible]
God, thanks very much for the call.
Our next question will come from Alex or she's me Lawrence Alexander at Jeffries.
Speaker Change: Hey, good morning. This is Kevin S. Duck on for Lawrence.
I guess I'm trying to get more sense of demand for the activities to rate drops. I'm just kind of curious to see if I guess how you expect maybe demand to turn, let's say, if rate drops a hundred basis points or so, and in 2025, and I guess I'm just curious to see if you're seeing any signs of green shoots yet.
Speaker Change: Sure, I think um
In terms of a rate cuts, I mean, that's the most of our customers that we serve as our, I would say.
especially in terms of replying and petrarchemical are already very advantage about a global basis from an energy standpoint which is probably more impactful to them than the rate cuts themselves.
Speaker Change: and our other customers.
that are producing other chemical intermediates to materials or generally selling at a global base that are also cost advantage. In terms of what we see in demand, we do this year, our burdens, self-hurric assets, sales will be up.
You're over here. You know, one of the segments that we talk about nylon, we believe we'll be up year over year. I'll be it's not, it's certainly not a fan or year in nylon. It's still not a historically lower-end level but yet, you're over here. Mining remains strong as you've seen.
Metals and other materials components maintain high pricing and high demand. So, you know, from a demand standpoint, I think in general refining remains very robust with high utilization rates. Output is always again.
Consider it look like gold within the refining industry and always has a very strong.
The man pushed behind it and in terms of Virgin Software Gasses, we talked about some industrial segments weakness, but it's a very diverse product and there's lots of areas where there is very good demand. In terms of catalyst, our advanced materials and catalysts, we've already spoken with E.
Speaker Change: Renewable fuel segment, but probably definitely the man growth is still...
Projected to be 2 to 3% for a year, we're aligned with...
Speaker Change: the major producing costly vantage areas in terms of the U.S. and Gold Coast.
and our Hydrocracking Sales, which are, we're happy with this year. All the edits not to keep cycle here that we had in 2023. The Argaining Share in that space with our new mock technology.
Okay, thank you. And then my second question, I was wondering if you could talk a little bit about, I guess, how you think about the revenue opportunity over the next, it's say five years or so, for staff.
Sure, I mean, you know, staff is, you know, our view on staff is, you know, to highly attractive market for both producers and the supply chain partners and it really staff is really the only
Fireball means to decarbonize airline travel. So we believe that our zealight technologies were, you know, whether it's the de-waxing materials or the glimmersation catalyst that we have really well positioned to enable that industry.
In terms of the timing as we see it, we expect pilot scale sales really towards the end of 2025. And then that starting to ramp in 2026.
As certain mandates become effective in particularly in EU which will have a 2% mandate in 2026. And we expect whether a mandate or just a consumer driven SAF.
Speaker Change: the man to come in to play here the U.S. and beyond in 2026 and through 2030.
Speaker Change: Alright, thank you.
A reminder to our phone audience that is star and one for questions. We'll hear from Hamed Korsand at BWS Financial.
Hey, good morning. My first question was, what's the level of conversation you're having with the over-finery customers given that they're publicly talking about, you know, cracks, breads, declining and their utilization rates, you know, just hugging the 90% line right now.
Sure, good morning, I think we're very on the refining side for eco services has very, I'd say, close relationships with the refining customers and many cases.
Data Feeds to the, you know, to their actual consumption of the sulfuric acid in terms of their population.
Unit and how they're running.
Speaker Change: Love you
Alcolid remains very valuable in terms of its position in the gasoline pool. So even as you see things like overall utilization rates may ticking down particularly some that's related to maintenance.
or Crack Speds dropping. Generally, they will want to lean into their isolation units even harder because it's an area of significant profitability for them. So, our outlook on isolation and it has its been for...
has been involved with this business. We remain strong because it's the favorability of that with the man and economics that's around it, you know, are unchanged.
Okay, and then you've had a lot, lots of really one-time issues and last year in this year, um, X-ing out the Z-L-S joint venture is 22 a good baseline to compare for 2025.
Speaker Change: Yeah, I'm at it.
Every year has different challenges in it, right? And 2022 has some favorability in some cases, timing items and others, right? So we've talked before about the hydrocracking and peak years in 2023. It was lower in 2022, but then there was also a different dynamic with sustainable fuels.
We also had some favorable pricing that was really driven by some of the indexation that we've talked about in the past and the eco services that we wouldn't see going forward. So there's a combination of a few things, a hominets, it's a bit of a mix bag.
Speaker Change: Thank you.
And we have no further questions in the queue at this time. This does conclude the EcoVist 3rd quarter 2020's call in webcast. Thank you for your participation and you may disconnect at any time.