SIRE releases first quarter financial results

By Erin Voegele | February 15, 2016

On Feb. 10, Southwest Iowa Renewable Energy LLC released financial results for its first quarter of fiscal 2016, reporting net income of $1.1 million, or $82.99 per basic unit, for the three-month period ending Dec. 31, down from $9.8 million or $737.45 per basis unit, for the same period of the prior year.

Revenue from continuing operations was $53.2 million for the quarter, down from $72.5 million during the first quarter of the 2015 fiscal year. Modified EBITDA, which is defined as earnings before interest, income taxes, depreciation, amortization, unrealized hedging gains and losses, and other significant noncash expenses was $4.4 million, down from $16.7 million during the same quarter of the previous fiscal year.

SIRE had $3 million in cash and cash equivalents and $33.5 million available under revolving loan agreements, for a total cash and available borrowings of $36.5 million at Dec. 31.

“During this first quarter of fiscal 2016, we continued to drive down our cost per gallon, implementing several efficiency measures, as well as capitalizing on lower utility costs,” said Brian Cahill, president and CEO of SIRE. “The harvest season went well for us, as we are now receiving Enogen corn, and utilizing our new 1 million bushel bins.”

According to information released by SIRE, the company voluntarily slowed production during the first quarter during times of compressed margins, producing 29.1 million gallons during the three-month period. “We continue to focus on running the plant efficiently, always seeking the right balance of optimizing the yield and profit,” Cahill said.

Denatured and undenatured ethanol accounted for $41.58 million in revenue during the quarter, or 78.2 percent or company product revenue during the quarter. During the same period of the previous year, ethanol accounted for $58.6 million in revenue, or 82.2 percent of company product revenue. Distillers grains accounted for 17.6 percent of revenue at $9.39 million during the first quarter of fiscal year 2016, compared to 13.9 percent at $10.08 million during the same period of the previous year. Corn oil accounted for 3.9 percent of revenue, or $1.9 million, in revenue during the quarter, compared to 3.6 million, or $2.62 million, in revenue during the same period of last year. Other products accounted for 0.6 percent or revenue, or $333,000, during the most recent quarter, compared to 0.3 percent, or $237,000, during the same three-months of previous fiscal year.