Good morning and a warm welcome to ReFuels Q4 2025 results, representing the period January to March 2025. With me today to present the results, we have, as usual, CEO Philip Fjeld and CFO and Managing Director Baden Gowrie-Smith. After the presentation, we will have a Q&A session, and you can submit your written questions during the webcast. With that, I hand the word over to Philip.
Thank you very much, Aulan, and good morning to everyone who's watching this live. Hello to everyone who's watching this on demand or catch-up. I'll take you through what we've done in our Q4 in the previous quarter. Before I do that, I'll just set the scene slightly as to where we're at and what we're doing. We're on a journey to decarbonize the U.K.'s truck fleet, or Europe's truck fleet, as you want, but we're focused on the U.K. for now. We've got a very strong leadership position in the market in the U.K. Probably about 95% of all CNG trucks on the road use our network. We've just opened a new station. That takes us up to 16 large public access stations in the U.K. We're now north of 2,000 trucks that use our network exclusively.
We are very proud of the fact that for calendar year 2024, we helped our customers save north of 216,000 tons of greenhouse gas emissions by running on 100% sustainable and renewable biomethane. What does a typical station look like? For those of you who have seen our presentations before, you will probably recognize this slide. Why have we not renewed it or we keep it here? It is because it is a very good visual, a very good illustration as to what we do. We are not into retail of coffees and snacks. What we do is build very large public access, very efficient, high-capacity renewable energy vector, if you want, dispensing facilities. This is a good example. This is New Cliff, Northeast England. Can do 14 trucks simultaneously, about 800 trucks per day at full capacity.
A very, very efficient way of putting renewable energy into trucks, probably not anything more efficient in the market today. They are unmanned, which you will see later on, is a very good way to scale our business going forward. We are very pleased and quite proud with the previous quarter. We have started to turn a corner. We listed two years ago. There have been, I would say, market forces that have not necessarily been in our favor over the past two years. Regardless, we have been executing on a plan to take the company to where it is today and to take it also further into the future with further growth.
It is good now to finally be able to demonstrate to our investors and to the broader market what this company is capable of doing, even though we are still far away from, I would say, fulfilling and extracting its true potential. It is the first quarter of profit since listing two years ago. We have had good growth in the biomethane dispensed to our customers. I mentioned it previously. We have got north of 2,000 trucks now that use our station exclusively. A lot more to come over the coming quarters. Once again, 6x2, which we will touch upon later in the presentation as well. We now have the first confirmed orders for customers of the Scania 6x2, which will be delivered over the coming months, unlocking a six times larger market than the 4x2 market that we have currently been confined to.
We are pretty much done with the biomethane sourcing that we need for this calendar year. Our team are very busy also sourcing for next year. That gives us much better visibility on earnings and margins going forward than we've previously had. Also mentioned our Livingston station that we announced earlier this week. Our second station in Scotland once again opens up important new customers to us. Finally, we've of course gone through this before through the announcement, but the transaction or the finalization of the transaction with Foresight that we announced in April has given us a very strong platform from where to not just conduct our day-to-day business, but also to grow from. If you look at that structure, what does it do?
It brings basically the verticals we've previously had, which has been the biomethane sourcing and trading of certificates, CNG Fuels being the engine room, if you want, and then also CNG Foresight, where the stations used to sit. That is all now been brought under the CNG Fuels umbrella, which means we're internalizing cash flows and so on and so forth, and therefore makes it easier for us to execute on the strategy that we've got. What we've now basically created is a self-funding, self-funding from an equity perspective platform that we can now focus on growing again. We've been a bit in sort of hiatus the last year whilst we've been negotiating this. As you will see also from some of Baden's slides later on, we are in a strong financial position and that strength to just continue to compound and accelerate as we go forward.
Here we are. If we then look at the operational review, we are now north of 2,000 trucks using our stations on average through the month. That has gotten us up to close to 10% of the so-called 4x2 truck market in the U.K. That is only a small sliver, if you want, of the overall articulated truck market out there. On the graph on the left-hand side and to some extent, sorry, the right-hand side, but also to some extent the left-hand side, you will see that there is, you know, this is not a straight curve that goes upwards. There is always some seasonality in there, month and month, you know, some months have more days than others. You have Christmas in certain periods, Easter, so on and so forth. The overall trajectory here is heading pretty much upwards.
The growth we've had over the last year has been good. I wouldn't call it strong, but we're confident based on what we're now seeing that that growth rate should accelerate going forward, even though it's always harder to grow from a higher base. Going forward, based on what we see now with regards to customer interest, we're confident that we will accelerate growth going forward. If you then look at what is it we provide to our customers, the majority of our customer base are very focused on decarbonizing their transport operations. How do they best do that? As of today, they don't really have that many options, pretty much biodiesel or biomethane, particularly for the heavy long-haul operations, which is our core market. We provide biomethane, which is 100% renewable and sustainable gas to our customers.
Not only does it offer the benefit of massively reducing your greenhouse gas emissions 80-90%, sometimes more than 90% compared to running a regular diesel truck, but it also offers you cost savings, which we've added in the last couple of quarters here. It also offers, sorry, considerable cost savings over biodiesel, biodiesel here being represented by HVO. There has been an increasing focus in, I would say, the media landscape, but also in the broader industry landscape that sourcing the feedstock you need to produce HVO might be challenging and might sometime not provide the assurance level that it should. I don't want any way to take away from this call that HVO is a bad fuel to run your truck on. HVO done properly is an amazing solution to decarbonize your trucks.
The challenge really lies in this is a globally traded market for the feedstocks, typically used cooking oil, other types of waste, fats that can be used to produce biodiesel. Of course, the product itself is globally traded. Because of that, the so-called chain of custody, the quality of assurance here can be challenging. If you then look at biomethane, this is very much a locally produced fuel. The feedstocks, whether they are food waste, manures from farms, other agricultural waste or residues, sewage sludge, this is not put on a tanker and sailed across the ocean. This is locally sourced. Therefore, the provenance and actually the chain of custody of knowing that the feedstock is 100% proper and is genuinely what it says on the tin is so much easier compared to other supply chains such as liquid biofuels.
When you look at the investment that's currently going into the sector in Europe, and these are just figures that have recently been announced, we expect to see continued growth in that investment going forward. We are in a world currently and for the foreseeable future where we don't see a shortage of feedstocks to produce biomethane, nor the actual end product, which is important for us. Mentioned the 6x2 on many presentations previously. It's now actually nice to be able to stand here and say, listen, what we've said is now starting to happen. Iveco have had a 6x2 model for a while. They've released a new version of their 6x2, a much improved version of the 6x2 model with very strong customer interest. Scania released their 6x2 last year. We've now had the first customer orders confirmed.
They're actually being ordered and delivered earlier than we thought, with the first ones going into operation over the summer months. When you look at this graph or this chart, it's pretty obvious that we are more or less non-existent in the 6x2 market. We've got just below 100 6x2s currently going through our network, but the potential there is huge. If we can replicate what we've done in the 4x2 market, but probably at an accelerated pace, it's going to be really exciting going forward. As part of the Foresight transaction, we are on a trajectory now and have set out a business plan over the next three years to double our capacity, both of grid-connected stations and on the so-called MRSs, mobile refueling stations, where we're going to take ourselves.
We're going to add another nine large high-capacity stations and also add a number of MRSs. In addition, we continue to explore early-stage developments. Why? Because our view of the market, of course, adapts and future interest from customers actually feeds into where we need to prioritize sites going forward. Sites that we maybe think we're going to build in 18 months' time, one of those might be discarded and another one put in, depending on how customer demand and how new customers decide to come on board. We recently opened Livingston earlier this week. It's been great there to see Tesco have 40 plus trucks going through there on day one and very strong interest from customers, surrounding customers starting to use that site.
The next one to go into development is a site in Magor, where we are, where you can see there, there's not a digger on site yet, but that's not that far away. That will be another large capacity station. We will advise our investors of the future ones to come at our next earnings release in August. We have the mobile refueling stations where we've now got 11, 10 physical ones today and 11, which is on order slash build. I say on order slash build because we ordered certain components, but of course, we do all the integration and all the build ourselves. Our target there is for 30 by 2028.
Based on just the last weeks and a couple of months, the interest from our customer base, existing and new customers of us deploying mobile refueling stations has, I would not say taken us by surprise, but it is definitely a lot stronger than we would have expected just six months ago. If you then look at the certificate prices that we rely on to source biomethane, we are now up at a GBP 0.25-0.26 level. It has been there for a while. Baden will give a better view as to the margins that we are making there. What we are now seeing is that the biodiesel market is more balanced. The feedstock market that, of course, feeds into the biodiesel market is also more balanced. There are various specific drivers in Asia, which is also pushing up the feedstock prices, which again is helping to push up certificates.
Does that mean that 2025, 2026 is where it's going to remain forever? There's one thing that's certain with this market is that the answer there is no. Let's see how that further develops over time. As of today, yeah, we're in a pretty good position there. I'll hand it over to Baden before I provide a summary towards the end.
Thank you very much, Philip. We've titled this Locking in the Biomethane Margins for the Second Half, and I'll tell you why. We've continued to see certificate prices improve over the last couple of quarters.
In the last quarter, we recognized GBP 0.23 per RTFC on average, slightly below the current market price, but that's due to the forward sales that we had conducted both earlier in the obligation year and towards the end of last year, given that you can sell forward RTFCs not just for the obligation year, the calendar year you're currently in, but also for the year that follows, which is a hedging strategy, which I can update you on shortly. Margins have continued to recover. As you can see on the right, when we remove the accounting adjustments, which require a difference between spot treatment and forward treatment, we see that we have a 28% gross margin on RTFC sales for the quarter we've just had.
GBP 73 million RTFCs were sold, but that did include the carryover of GBP 13.7 million, which again is an accounting treatment from the prior quarter. So GBP 60 million RTFCs actually sold in this period, and those were all delivered at spot. As Philip's mentioned, we are fully sourced for 2025 year, and sourcing for 2026 year is progressing. The most important part of that is that we have also been able to sell forward these RTFCs to lock in the margins on the biomethane purchases. That gives us great visibility on having healthy earnings throughout the second half of 2025 and moving into 2026. On the next slide, I'll run you through how we're able to use market conditions to lock in these margins better. The margins you see here on the side remove the distortion of this accounting treatment.
Here you can see the volumes, a straight line in volume growth, which of course is not, sadly, not something we always see. Trucks will obviously arrive when they want to arrive and generally seasonally. What this is used here to demonstrate is that over the period of a year where we continue to see increased volume growth, we do not have to balance the biomethane for our customers in every quarter of each year. Now, to try and clear up some confusion around this, the obligation year for the RTFO is a calendar year obligation. That is the year in which the obligated fuel suppliers who must provide certain amounts of biofuel will need to buy certificates and balance the amount of biofuel that they sell through the year.
For us, it means it enables us to dispense CNG and Bio-CNG throughout the year and dispense CNG to customers and then balance it in certain quarters to make sure that over the course of the calendar year, we are fully sourced to the extent that we physically can. Customers do, however, care that their Q4, which is the calendar Q1, is ideally fully sourced because, of course, of their annual reports, they are able to disclose that they were fully sourced for their biomethane. However, for us, it is important that we are fully sourced over the calendar year because after the calendar year, you are unable to then catch up biomethane, which you are short.
What this means is that you will see in these forward periods that although we are generating very healthy margins and we have very healthy look-through, you will see that our calendar Q2 and Q3, which is our reporting Q3 and Q4, will usually have a higher amount of certificate sales and matched off against higher biomethane purchases because we will be trying to fill our customers' final quarter of their financial year. Most importantly, as you can see here, the Q4 calendar year for us to be fully sourced, to be fully sourced that period. That actually comes at a huge benefit for us.
It enables us to time the purchases of our biomethane for when we see favorable market conditions, time the delivery of that biomethane, and then we can also forward sell RTFCs for specific periods to match that biomethane, but also to deliver RTFCs to customers at the time that they want to receive, that they want to be receiving RTFCs. There are also various other benefits, such as when gas is able to be shipped where we source from the continent. In all, this one-year obligation period provides us great flexibility for customers and for ourselves and to benefit customers. What we've seen, what we've been doing for the last couple of months is fully sourcing for this calendar year, being able to sell the RTFCs forward to lock in those margins.
We're doing that for the 2026 year already to get clear visibility of earnings and obviously more stability for the year and a half ahead. Here are the financial highlights. Obviously, very pleased to show the ReFuels, which is the listed entity that we currently have. This is under the old structure. The new structure, the transaction with Foresight, concluded in early April. This is the final quarter where we will be reporting all of the earnings from the prior structure. Obviously, very happy to show that we had healthy profit over the quarter of GBP 3.4 million, GBP 4.2 million of unadjusted EBITDA, and GBP 4.7 million once we adjust out for the non-cash items and timing differences.
You can see we've had a huge increase in gross profit over the year, just showing how the business has really developed from GBP 17 million for the financial year versus GBP 2.3 million for the prior year. Really a very substantial increase. The EBITDA from this quarter was substantial enough, even on an unadjusted basis, to take the financial year 2025 into a positive EBITDA, positive cash generation year. Obviously, very happy to be able to show that. The cash flows did not really move around a lot. That is largely due to working capital changes. We had a very large increase in trade receivables during the period. Again, as you can see, a massive increase from the prior year in the performance of our cash basis as well. Finally, on the overheads, we've been really, really cost-conscious.
We've been very careful in managing the existing resources for the business, which we have designed to be able to look after and manage a nationwide network of stations. We've seen a decrease from GBP 0.32 down to GBP 0.25 from the Q4 to Q4 on a per kilo basis. Actually, if you strip out the transaction costs and the recent transactions, it gets down to around GBP 0.19. Obviously, very substantial improvements in our cost per kilo from the growing economies, increasing kilos through an existing network that has plenty of capacity. Yes, really, really lovely to see this as well. What's this slide showing? I know I've shown it before, but for those of you who haven't watched these presentations, this is the station network itself.
Again, this is under the old structure where this was actually owned by the CNG Foresight Joint Venture. This is the stations purely by themselves, how are they performing over time, trucks going through them, and the EBITDA they are generating. The EBITDA they are generating previously has obviously been building up and we are now at GBP 1.82 million for the Q4 period, up from GBP 1.57 million, same period last year. The station network generated GBP 7 million of EBITDA over the year. What we anticipate is that once the existing order book we have and those confirmed orders from the OEMs and customers is delivered, we will be over the GBP 12 million of annualized EBITDA per year, which is enough revenue to cover the entire cost base of the operating costs of the CNG Fuels stations, the MRS business, the construction business, and future research and development.
Moving the biomethane side of the business, moving the biomethane business to one side, the entire station network business and its growth will be able to be funded by the stations very shortly off our existing order book. Beyond there, obviously, we have substantial growth and scale, given that we now have a network that can hold about 10,500 trucks, and we are currently just over 2,000. Trucks and lorries are starting to speed up again. You can see a reasonable uptick there. This is the three-month rolling average. We are now over 2,000 going through the stations. We are seeing these starting to come back through. Yeah, that will continue to drive towards that positive EBITDA soon. Finally, this is the new CNG Fuels pro forma group.
Now, this is what we will be showing every quarter going forward because, of course, ReFuels will become a minority holder of the shares in CNG Fuels. And so we'll not be consolidating these earnings up. We are going to show the ReFuels accounting performance, of course. We will also be showing CNG Fuels pro forma so that the ReFuels and the investors and the market can see what the 40% ownership looks like, which has a ratchet mechanism which takes us up beyond that in the future. As you can see, as a group, which is now newly formed, had it been in existence in the last quarter, we would have had EBITDA in the period of GBP 5.7 million. What you can see from the last quarter to this quarter is there's quite a big jump.
There were some adjustments, transaction costs, elements of payroll, etc., which needed to be adjusted out. Actually, what we would have seen here is a slightly lower EBITDA in this quarter, a higher EBITDA in Q3, and a much more smooth increase over time. What we have now, of course, is we have got the two revenue streams coming into this business. We have got the RTFCs, biomethane, and RTFC generation, which we now have great visibility on for the next 12 months or so. Then we have got the CNG station business, which you have just seen is improving on a quarter-by-quarter basis. The combination of those should form a fantastic platform for growth and profitability into the future. Thank you.
Thank you very much, Baden Gowrie-Smith. There we are. Camera's back on.
I will provide a brief summary and outlook, and then we go into questions. I can see there are some questions that have been submitted. As Baden went through, a bit of a watershed moment for us here. We have been executing on the plan that we are now finally starting to see the bare fruits. We have an EBITDA profitable year, and I would say a positive outlook with regards to healthy earnings going forward, not only for 2025, but that is also now stretching into 2026. We have got the underlying growth in trucks here that are coming through. The vast majority of those are 4x2s because that is the visibility we have got. The 6x2 market, we are, of course, very excited about. Really hard there to put more accurate estimates as to what that could mean for us. We are seeing unprecedented interest in trials and demos for 6x2 vehicles.
The first orders of the Scania have come through once again. That is very encouraging. Probably actually come through and being delivered earlier than we thought. We will be able to provide more hard evidence on the uptake of the 6x2s over the coming quarters. If you then look at where we are at with regards to the transaction we did with Foresight, what we have achieved there is to put the overall group on very solid footing. We are fully equity funded. We are busy running a debt process at the moment that is making good progress. As such, we are in a very, very good position to accelerate our growth going forward. I think what is also good to mention here is we previously talked a bit about biodiesel, biomethane, etc.
Whilst there are potential challenges and, I would say, assurance complications with certain parts of the biodiesel chain, what we see with regards to biomethane, the access to feedstock, the growth that's coming here, we today can't see any supply issues that would affect our growth in this market. I think what we've been saying for a long, long time now, that biomethane in Europe is now starting to see the start of a megatrend. That's now actually being delivered upon as well. All in all, very pleased with where we're at now, and we've got some really exciting quarters and years ahead of us. With that, we will probably drop the slides and go into some Q&A.
Good. We can move into Q&A. First, a question is, do you have any views on the U.S.-U.K. trade deal and potential impact on the U.K. biofuels/RTFC market?
I'll take that one. The answer is yes, we do. I won't get too complicated here, but the U.K.-U.S. trade deal, the way it stands at the moment, will make the U.K. bioethanol sector or will put the U.K. bioethanol sector in a very, very difficult position. That's been in the press in the last weeks, the last month. How will that affect RTFC pricing? A lot of the bioethanol that comes in is so-called single counting. There is a so-called crop cap. There's only so much of that bioethanol that comes into the RTFC market. I don't think we're expecting to see a direct impact on RTFC prices as such. Clearly, the overall impact on the U.K. industry is not great because bioethanol production in the U.K. doesn't just provide bioethanol.
It provides food-grade CO2, which is important for the food and beverage sector in this country. It's important for abattoirs that use CO2 during the slaughter process. It produces animal feed. It has a massive impact on farmers that supply into the sector. As a broader economy, the bioethanol sector and losing the bioethanol production in the U.K. is not great at all. When it comes to RTFCs, probably not going to be a large impact, at least not short term.
Good. Next question in regards to the rollout plan. Is the plan for operational cash flow to finance the nine new stations over the next three years? How do you structure the financing for stations with regards to debt and equity? What percentage of the CapEx can the ReFuels equity ticket typically be?
Yeah, I'll take that one. Thank you. Is the plan to operate to fund the cash flow over the next few years? Yes, absolutely. The shareholders do not intend to pull cash out of the business. We are fully aligned on business growth over the next couple of years. The nine new stations is a check size that would work, that could well work with cash flow and a conservative debt facility. We are progressing really well on that at the moment. We anticipate that we will be able to commence the development of some additional stations very, very shortly. That debt facility is designed to bring forward our capacity to get into development as quickly as possible for these next sites because we really want to keep the momentum going here. How do we fund with regards to debt to equity?
At the moment, as I say, we're looking at a fairly conservative facility given the size of the asset portfolio we have that underpins it. That can be revisited in the future if need be. When it comes to ReFuels equity, ReFuels and equity finance, we are fully equity financed at this point. Cash flow generation over the next couple of years is fairly substantial. Clearly, if it looks like we'll need to build a lot more CNG stations, then we'll revisit how we revisit what the capital structure should be looking like and the speed of growth. At the moment, we feel this is a really good place to be.
Good. Next question is on the 6x2 trucks. What is the trial feedback for the new 6x2 CNG trucks? Do you have any more insight into production capacity for these trucks?
Good question. I'll do the production capacity one first, maybe. From what we're hearing from the OEMs, they can combined produce into the thousands per year. What we're always being told, because of course, they adapt to market conditions, right? Whether they come out with a new diesel model that's incredibly popular, they'll, of course, adjust their production platform accordingly. They will do exactly the same here. Short term, meaning the next 12-18 months, we're being told combined, it's several thousand. If demand overshoots that, then I'm sure, and they've told us, but I'm sure that they will adapt to deliver even further. If you look at the interest, the interest is incredible. The feedback we're getting is also incredible for both of the new products that have come out, the Scania 6x2 and the new revamped Iveco 6x2.
These are game-changing vehicles as such. It's something that we've been hoping and waiting for for the last 8 to 10 years. They've now been delivered, and the feedback is as good or better than we had been expected. The list to trial these vehicles is worryingly long. It's a nice problem to have, but there are currently too few demo trucks on the road in the U.K. The manufacturers are dealing with that as we speak. That also means there is going to be a slight lag here in getting bums on seats, basically, so that fleets can actually trial them because the majority of fleets want to trial them before they order. Which is why, as I said previously, it's going to take us a couple of quarters here to see really how rapidly the order book ramps.
The indication so far is very encouraging, given that we're already seeing considerable orders being placed. The larger ones beyond that, the 50s and the 100s and the 100s plus, we're expecting to see later this year or early next year.
Good. Next question on the new structure. How do you plan reporting going forward for the new structure?
Yeah, I touched on that very briefly. What we've done is taken feedback from a number of people and considered how investors may want to see this best. We think providing a segmental reporting going forward, splitting the biomethane and RTFC side of the business from the station side of the business to the extent that we can, given obviously they're heavily interlinked, will be really valuable for everyone to be able to see how they grow and move at their own pace. Then we will be able to obviously show the consolidated CNG Fuels group, which ReFuels owns a substantial stake in going forward, so that, again, people can see how that value grows and develops over time as volumes, which are volumes which are common to the group in total, continue to grow.
Good. I see I have one final question here, and it is you are forecasting a large increase in the purchase of mobile refueling stations as opposed to grid-connected stations. Is this a shift in strategy?
Yeah, good question. Depends how you define shift in strategy. We are clearly driven by what our customers are demanding and what our customers want. You can call it an adaptation to ensure that we can fulfill as much customer demand as soon as possible.
What we are unfortunately seeing in the U.K., and probably not the U.K. alone, is that developing fixed infrastructure in this country is just getting worse and worse. The timelines are being stretched out, dealing with landowners, getting planning permission, doing all the surveys, getting all the grid connections, whether it is electrical or gas connections. All of these things take a very, very long time. There is nothing controversial about a CNG station. We have never had planning approval turned down because people object to having a CNG station. It does not provide any ground pollution, air pollution, noise pollution, anything like that. It is just the process you need to go through. That is holding back our growth, particularly now that we are seeing some really large new customers come on board with very ambitious/aggressive adoption plans going forward. We expect the 6x2 will just accelerate this. We need to make a choice.
Do we want to continue to only do grid-connected stations and limit our role in the mobile refueling station market to only certain customers in certain locations? Or do we want to bring customer demand forward, make sure they can adopt as many trucks as possible by accelerating the number of MRSs we have in operation? Given that we are a customer-driven organization, we'll go for the latter option, which is to make sure that they can adopt as many trucks as possible. That's really where it's come from. It's come from a realization that fixed infrastructure takes time. It's complicated, and unfortunately, to some extent, is outside of our control on the timelines. MRSs are inside of our control. It takes about eight months from we order one until it's in operation. It doesn't require planning permission, and we control all the logistics.
Yeah, this has been driven by customer interest. As such, it should help us accelerate the growth in a lot of customers' adoption plans.
Good. There are no more questions. I hand it back to you, Philip, for final closing remarks.
Thank you very much. Yeah, thank you for everyone who's showing an interest in the company. Thank you for tuning in, and we look forward to seeing you on the next one, which is towards the end of August.