Aemetis reports improved margins, demand following first quarter

By Erin Voegele | May 08, 2015

Aemetis Inc. has released first quarter financial results, reporting revenues of $34.7 million for the quarter, compared to $60.7 million during the same period of the prior year. Gross loss for the quarter was $200,000, compared to a gross profit of $15.6 during the first quarter of 2014. The company attributed the decrease in revenues and gross profit to a decline in the per-gallon price of ethanol as well as lower per-ton prices for wet distillers grains (WDG). According to Aemetis, WDG pricing suffered from reduced dairy production in California along with lower overall feed prices in the market.

The company reported an operating loss of $4 million for the quarter, compared to operating income of $12.7 million for the same quarter of 2014. Net loss was $8.6 million, compared to net income of $7.7 million during the first quarter of the previous year. Adjusted EBITDA was a loss of $2.7 million, compared to adjusted EBITDA of $14.2 million during the same three-months of 2014.

During an investor call, Eric McAfee, CEO of Aemetis, indicated the company’s Keyes, California, ethanol plant continues to run with operational excellence at capacity, but noted the industry as a whole suffered from excess inventory over the winter.

“A primary cause of excess national ethanol inventory is the lack of enforcement of the federal renewable fuel standard by the EPA,” McAfee added. “As a direct result of this lack of enforcement of existing law, the inventory of ethanol in the U.S. rose during the winter of 2014/2015 due to a lack of distribution of biofuels by oil companies.”

While margins were compressed during the first quarter, McAfee noted margins have improved over the past few weeks, along with stronger ethanol pricing. ” As summer driving season approaches, we expect this trend to continue as the demand for ethanol is increasing and national inventory levels are falling,” he said.

McAfee also discussed Aemetis’s biodiesel operations, noting that the company’s biodiesel plant in India is benefiting from growth in the domestic market.

He also addressed the company’s renewable jet and diesel fuel business. “During our last business update call, we noted that Aemetis was the first company to sign a global technology license with Chevron Lummus and Applied Research Associates, known as ARA, for the production of 100 percent replacement renewable jet fuel and diesel. To our knowledge, every other approved renewable jet fuel technology is limited to a 50 percent blend with petroleum jet fuel due to a lack of aromatics that provide lubrication,” he said.