CropEnergies hits record-high operating profit

By Lisa Gibson | May 24, 2017

The reopening of a United Kingdom ethanol plant brought increased revenue for Germany-based CropEnergies AG in its 2016-‘17 fiscal year, and led to a record operating profit of 98 million euros ($109.9 million). The company reports its revenue at 802 million euros, 11 percent higher than the previous year’s 723 million euros.

CropEnergies’ Wilton, U.K., ethanol plant reopened in July 2016, after being closed for more than a year as ethanol prices hit a low that was insufficient to balance costs of production, said Joachim Lutz, CEO of CropEnergies. “We have used the time of the shutdown to carry out a number of improvements, which is now paying off, as the plant is running very successfully at high capacity utilization,” Lutz said. “Now, the price level better reflects the superior quality of a ‘green’ renewable fuel, which contributes to a much more environmentally friendly mobility.” The company’s bioethanol production in 2016-‘17 increased to 1.03 million cubic meters (272 million gallons), from the previous year’s 837,000 cubic meters.

CropEnergies also increased its production of food and animal feeds, from 352,000 metric tons (388,000 tons) in 2015-‘16 to 574,000 metric tons in 2016-‘17, the company reports.

CropEnergies expects increased ethanol demand in Europe for the 2017-‘18 fiscal year, driven in part by the European Union’s goal of 10 percent renewable energy in the transportation sector by 2020, Lutz said.

Prices for ethanol in Europe have fluctuated heavily, prone to high volatility with thin liquidity, Lutz said. “For some time periods, pricing and economics have not been plausible or logical. The more liquid the market becomes and the more clearly the advantages of ethanol vs. fossil oil are seen, the more stable pricing will get.”