Aemetis provides update on Edeniq, LanzaTech transactions

By Erin Voegele | August 15, 2016

Aemetis Inc. has released second quarter financial results, reporting improved ethanol pricing and positive margins. The company’s planned acquisition of Edeniq is expected to close during the third quarter.

“Pricing during the quarter improved compared to the same period last year, and gross profit for the first half of 2016 improved significantly over the first half of 2015 based upon favorable pricing on inputs and finished products as well as a grant from the California Energy Commission,” said Eric McAfee, chairman and CEO of Aemetis.. “We expect to implement Edeniq’s cellulosic ethanol technology at our Keyes plant in the first quarter of 2017, which we believe will substantially improve cash flow by increasing the number of gallons of ethanol and distillers oil produced at our plant, as well as generating valuable D3 biofuel RINs when the EPA approves Edeniq’s company registration,” added McAfee.

During an investor call, McAfee noted that the pricing of ethanol improved 3 percent year-over-year during the second quarter. Positive margins were also supported by using remaining grant money from the California Energy Commission related to the use of milo feedstock, he said. During the first half of the year, McAfee said Aemetis’ 60 MMgy ethanol plant in Keyes, California, processed more than 70,000 tons of grain sorghum under the CEC alternative feedstock program. Moving into the second half of the year, McAfee said the company believes margins will continue to be positive due to the expected large corn crop and strong export markets.

Regarding the Edeniq acquisition, McAfee indicated Aemetis is in the process of completing the documentation and approvals required to close the transaction. He also said Edeniq is expected to obtain its first U.S. EPA registration at Pacific Ethanol’s Stockton, California, plant, which will allow the facility to generate D3 renewable identification numbers for cellulosic ethanol output. McAfee said Aemetis intends to install Edeniq equipment at its Keyes plant, and expects EPA approval for that pathway during the first quarter of next year.

In addition, McAfee said the LanzaTech technology that was licensed by Aemetis earlier this year is now in basic engineering for the construction of an 8 MMgy cellulosic ethanol plant. That facility is designed to use orchard wood, forest waste and energy crops as feedstock, he added.

Aemetis reported revenues of $33.1 million for the second quarter, compared to $38.1 million for the same period of the prior year. The decline in revenue was primarily attributed to decreases in ethanol and wet distillers grains volumes. Gross margin for the second quarter was $1.9 million, the same as the gross margin during the second quarter of 2015.

Operating loss was $1.1 million for the second quarter, compared to an operating loss of $1.3 million for the same quarter of last year. Net loss was $5 million, compared to a net loss of $6.3 million during the second quarter of 2015. According to Aemetis, the largest contributor to its net loss is interest expense of $4.4 million. The company said it is continuing to search for lower cost capital. Adjusted EBITDA for the second quarter was $960,000, up from $208,000 during the same period of 2015.