SIRE reports increased ethanol production, challenging margins

By Erin Voegele | February 19, 2019

Southwest Iowa Renewable Energy LLC recently released financial results for the three months ended Dec. 31, reporting the company was impacted by a difficult margin environment. Ethanol production volumes, however, were up.

SIRE, a 140 MMgy facility located in Council Bluffs, Iowa, said it produced 33.2 million gallons of ethanol during the first quarter of fiscal year 2019, the three-month period ended Dec. 31, up from 31.7 million gallons produced during the same period of the previous financial year.  

"We continue to evaluate and implement new production technology to expand our income stream,” said Mike Jerke, president and CEO of SIRE, in a statement. “We continue to focus on running the plant efficiently, increasing our ethanol yield, with a balance of optimizing the yield and profit, and at the same time scrutinizing our expenses."

Jerke indicated SIRE experienced very tight margins during the quarter, which continues the trend the company realized in previous quarters. He also noted corn prices have increased by almost 9 percent, while ethanol prices have remained well below last year’s levels. SIRE, however, saw increased price and demand improvement for its distillers grains during the quarter, he said.

SIRE reported a net loss of $1.2 million, or $87.57 per basic unit, for the quarter, compared to net income of $1.2 million, or $88.62 per basic unit, for the same period of the previous fiscal year.

Revenue from operations was $53.4 million, up from $50.3 million during the same quarter of the 2018 financial year.

Modified EBITDA was $900,000 for the quarter, compared to $4.2 million during the same period of the previous year.

Revenue from ethanol sales fell to $39.62 million during the quarter, accounting for 74.2 percent of SIRE’s quarterly revenue, down from $39.72 million and 78.6 percent of revenue during the same quarter of the previous year. Distillers grains accounted for 19.9 percent of revenue, at $10.64 million, for the quarter, compared to 15.9 percent, or $8.03 million, during the first quarter of fiscal year 2018. The share of revenue from corn oil was also up, reaching $2.56 million, or 5.4 percent of revenue, compared to $2.56 million, or 5.1 percent of revenue during the same period of the previous year. Revenue from other sources accounted for 0.5 percent, or $262,000, during the first quarter of fiscal 2019, compared to 0.4 percent, or $237,000, during the same period of the previous year.