Pacific Ethanol has record 2016 second quarter sales

By Ann Bailey | July 28, 2016

Pacific Ethanol reported record sales of $422.9 million for the second quarter of 2016, an 86 percent increase over the $227.6 million in sales the company reported in the second quarter of 2015.

The strong second quarter 2016 sales were the result of a record 232.2 million gallons sold, Pacific Ethanol said. The company attributed the increase in gallons sold to increased production capacity from its Midwest asserts and higher third-party sales.

“Industry fundamentals have improved since the first quarter of 2016 and our company was well-positioned to deliver strong operating results,” said Neil Koehler, Pacific Ethanol president and CEO. “Our success in improving plant performance across the fleet and realizing significant synergies from our acquisition of our Midwest assets allowed us to generate significant operating income within the stronger market environment.”

Record demand for gasoline that has resulted from lower fuel prices and higher vehicle sales has supported the ethanol industry, Koehler said.

Pacific Ethanol owns eight biorefineries with a combined production capacity of 515 MMgy of fuel grade ethanol. The company sells ethanol with combined marketing volume of more than 800 MMgy through its subsidiary, Kinergy. Pacific Ethanol investments in its plants include installation of industrial scale membrane system at Madera plant, producing cellulosic ethanol at the Stockton plant and evaluating additional opportunities, including solar power and anaerobic digestion, the company said.

Pacific Ethanol’s second quarter 2016 gross profit was $17.7 million, nearly three times Pacific Ethanol’s gross profit of $6.3 million in the second quarter of 2015. The increase reflected improved production margins compared to last year. Pacific Ethanol’s net income in the second quarter of 2016 was 4.7 million or 11 cents per share, the company said in the earnings report.

Export levels in 2016 are on track to exceed 2015 and expectations are that they will be as much as 1 billion gallons for the ethanol industry, Pacific Ethanol said. This fall’s U.S. corn crop has potential to yield record production, corn stocks are the highest since the 1960s and corn prices are the lowest in five years, which means the commodity can produce ethanol at a lower cost than Brazilian sugar.

“Ethanol remains the lowest cost and cleanest octane,” Koehler said.