Alto Ingredients reports profitable Q1

By Erin Voegele | May 13, 2021

Alto Ingredients Inc. released first quarter financial results on May 12, reporting solid performance for the three-month period. Mike Kandris, CEO of Alto Ingredients, discussed plans for several capital improvement projects, including carbon capture and storage (CCS).

Kandris opened the company’s first quarter earnings call by noting Alto Ingredients sold 19 million gallons of specialty alcohol during the quarter. It was also the company’s fourth consecutive quarter of gross profit and positive adjusted EBITDA, he said, which reflects the benefits of focusing on specialty alcohols and essential ingredients. “This is a more sustainable and profitable business model than fuel-grade ethanol alone,” he said.

During the quarter, Alto Ingredients announced plans to sell its Madera, California-based ethanol plant to Seaboard Energy California LLC. Kandris confirmed the sale of the 40 MMgy facility is scheduled to close during the second quarter.

Kandris also discussed several capital projects underway at Alto Ingredients. One project that is currently underway, he said, will expand the annual production capacity at the company’s yeast facility by 15 percent. Another project will upgrade the feed dryers at the Pekin, Illinois, plant to produce higher-value feed while improving overall plant efficiency and reliability. Both projects are scheduled to be operational before the end of the third quarter.

Regarding CCS, Kandris said Alto Ingredients is actively engaged in discussions to develop a project at the Pekin site, which sits atop the Mount Simon Sandstone formation. He said the company will share more information on the project in the future. In addition, Alto Ingredients plans to expand protein production at its dry mill facilities.

“While it is too early to provide specific details, we believe the economics are compelling,” Kandris said. “We will provide greater details on these projects over the coming months once contractual arrangements are finalized.”

Alto Ingredients reported net sales of $218.7 million for the first quarter, down from $311.4 million during same quarter of 2020. Gross project was $13.8 million, compared to a gross loss of $12.9 million. Operating income was $5.6 million, compared to an operating loss of $23.1 million. Net income available to common stockholders was $4.4 million, or 6 cents per share, compared to a net loss of $25.4 million, or 47 cents per share. Adjusted EBITDA was $13.6 million, compared to negative $12.4 million in the first quarter of 2020.