Aemetis’ third quarter 2016 gross profit up

By Ann Bailey | November 14, 2016

The gross profit of Aemetis Inc. improved to 9.3 percent in the third quarter of 2016, a 3.4 percent increase over the second quarter, said Eric McAfee, Aemetis Inc. chairman and CEO. With the improvement, Aemetis achieved EBITDA of $3 million during the first nine months of 2016, McAfee said.

The $3 million EBITDA represents a $6 million improvement over the EBITDA loss of $6 million in the third quarter of 2015. Aemetis’ revenues were $39.4 million in the third quarter this year, up from revenues of $38.5 million in the third quarter of 2015. Increases in ethanol and wet distillers volumes drove the increase. Third quarter 2016 gross margin, meanwhile, was $3.7 million, a $2.7 million increase over the gross margin in the third quarter of 2015. The increase in the gross margin resulted from an 11 percent decrease in the price of feedstocks.

Revenues for the first nine months of 2016 were $105.8 million, down from $111.3 million the same period in 2015. The revenues lost during the first nine months of this year were the result of a decline in ethanol volumes during that time period. Aemetos sold 41 milloin gallons in the first nine months of 2016, 1.6 million fewer than it sold in the first nine months of 2015. The net loss of Aemetis Inc.  in the first nine months of this year was $14.2 million. $6.5 million lower than the company’s loss during that same period in 2015.           

Looking ahead, Aemetis expects the record 2016 corn harvest to result in favorable pricing and believes that the ethanol business will perform well during the final quarter of 2016, McAfee said.

“For the fourth quarter of 2016, we believe margins will remain on a positive trend,” he said. “We see significant long-term growth in the ethanol market.”

Aemetis expects to see significant interest rate savings result from its implementation of a $50 million EB-5 funding program that allows the company to continue to repay high-cost senior bridge loan debt. The EB-5 funding program was announced in September 2016, McAfee said.           

In response to questions during Aemetis’ third quarter 2016 investor call, McAfee said that he expects a timely resolution to a dispute between the company and Edeniq over an agreement signed in May 2016 that has been in litigation since September. Aemetis continues to “aggressively pursue acquisition of Edeniq,” McAfee said.

The litigation could go on for years, but McAfee believes a decision will be made much more quickly than the court’s decision. “It’s more of a business issue than a legal issue,” McAfee said. “We don’t believe it’s going to be the court system that will resolve it. We believe this will get worked out relatively quickly.”

Meanwhile, Aemetis is in the permitting and engineering phase of implementing LanzaTech gasification technology to produce ethanol from waste materials. Completion is expected in 2018.