Pacific Ethanol reports positive third quarter results

By Holly Jessen | November 14, 2013

Pacific Ethanol Inc. recently reported its financial results for its third quarter, as well as for the first three quarters of the year.  

“Our results for the third quarter of 2013 reflect an improved market environment and the positive impact of our increased ownership of the Pacific Ethanol plants over the year-ago period,” said Neil Koehler, president and CEO of Pacific Ethanol. “We further diversified our revenue and feedstock as sorghum contributed significantly to our feedstock supply during the quarter, and we began production of corn oil at our Stockton plant in October.”

Pacific Ethanol owns 85 percent interest in New PE Holdco LLC, which owns four ethanol production facilities in Boardman, Ore., Burley, Idaho, and Stockton, Calif., and one idled facility in Madera, Calif. The company also has two subsidiaries, Kinergy Marketing LLC, that does the marketing for the Pacific Ethanol plants and other third-party facilities, and Pacific Ag. Products LLC, which markets wet distillers grains.

Recently, Pacific Ethanol hedged its position to lock in saving at least $3 million in feedstock costs next year. In early October, the company purchased surplus raw beet sugar to blend with corn for ethanol production. 

Koehler also talked about the California Low-Carbon Fuel Standard. “Oregon and Washington recently joined California and British Columbia by agreeing to implement their own low-carbon fuel standards with the vision of building an integrated market for low-carbon fuels on the West Coast, which is an exciting growth opportunity for Pacific Ethanol.”  

For the third quarter, the three months ending Sept. 30, the company’s net sales were $233.9 million, an increase of $18 million compared to the same time period last year. The company said that increase was attributable to more gallons of ethanol sold, offset slightly by a reduced average sales price per gallon.

Gross profit was also up, hitting $3.5 million, a total increase of $6 million. In the third quarter of 2013 the company experienced a loss of $2.4 million. Still, it was pointed out that this improvement in gross margin was slowed by declining ethanol process, uncommonly high corn prices and related derivative losses.

Operating income was also up, reaching $1 million. In the same time period last year the company had an operating loss of $5.3 million.

Looking at the first three quarters of 2013, the company’s net sales were $693.1 million, up from the $619 million in net sales in the same time period last year. Loss available to common stockholders was $10.3 million, compared to $14.5 million in the first three quarters of 2012.