SIRE reports improved quarterly margins

By Erin Voegele | August 13, 2015

Southwest Iowa Renewable Energy LLC has released financial results for its fiscal year 2015 third quarter, the three months ended June 30. SIRE reported net income of $6.1 million, or $457.04 per basic unit, for the quarter, compared to $5.6 million, or $421.05 per basic unit, reported for the same quarter of 2014.

Revenue from operations was $58.2 million for the third quarter, down from $88.2 million for the same three months of the prior year. Modified EBITDA was $9.4 million, down from $24 million reported for the third quarter of fiscal 2014.

SIRE has $3 million in cash and equivalents and $20.5 million available under revolving loan agreements, for a total cash and available borrowings of $23.5 million at June 30.

 “During this third quarter of fiscal 2015, margins improved significantly over the second quarter, but were still well short of last year’s margins,” said Brian Cahill, president and CEO of SIRE. “Demand for ethanol continues to be strong with the lower prices, both in the U.S. and abroad. The industry has continued to adjust and we expect we will have another good year.”

During the third quarter of fiscal 2015, SIRE indicated it completed repairing its steamline, and once again has the ability to utilize either natural gas or steam. SIRE also completed construction of two additional grain bins, adding 1 million bushels of capacity. In addition, the company commenced tests using Enogen corn and accelerated the annual shutdown to March due to lower crush margins during the second quarter.

According to Cahill, SIRE produced 31.5 million gallons of ethanol during the quarter. Regarding product revenue, information released by the company notes nearly three-fourths of the quarter revenue came from ethanol. SIRE said denatured and undenatured ethanol accounted for $42.34 million in product revenue during the quarter, or 72.7 percent of total quarterly revenues. Distillers grains accounted for $13.23, or 22.7 percent, of quarterly revenue, while corn oil accounted for $2.32 million, or 4 percent of quarterly revenue. Other products contributed $341,000, or 0.6 percent, of quarterly revenues. During the same period of last year, denatured and undenatured ethanol accounted for 77.6 percent of quarterly revenues, while distillers grains, corn oil and other products accounted for 18.8 percent, 3.2 percent and 0.4 percent of quarterly revenues, respectively.