Aemetis discusses pending Edeniq acquisition during investor call

By Ann Bailey | May 12, 2016

The $33.3 million first quarter 2016 revenue of California-based Aemetis Advanced Fuels was $4.3 million less than the company reported for the first quarter that ended March 31, 2015, Aemetis told investors during a May 12 conference call.

The reduction in revenue primarily was the result of a decline in the volume and selling prices of ethanol and distillers grains, Aemetis company officials said.

The company’s first quarter 2016 margin of $3.1 million, meanwhile, was more than $3 million higher than the gross margin of a negative $228,000 for the same period in 2015, the company said. The lower price of first-quarter feedstocks in 2016, compared to the price for the January through March period a year ago resulted in the higher gross margins.

The first quarter 2016 operating loss of $1 million and net loss of $5.1 million also were lower than last year’s Q1 operating loss of $4 million and net loss of $8.6 million.  Cash during the first quarter of 2016 was $325,000, $42,000 more than it was at the end of the fourth quarter in 2015.

While revenue was lower during the first quarter of 2015, Aemetis is optimistic about the company’s expected acquisition of Edeniq, a cellulosic ethanol technology company with headquarters in Visalia, California. Aemetis expects to close in June on the acquisition of the company, which has 29 installations operating at six ethanol plants. The Cellunator units are at the Mid American, Pacific Ethanol, E Energy Adams and Flint Hills Resources plants.

Aemetis announced May 5 it had entered into a definitive agreement to acquire Edeniq which has developed patented innovations that unlock cellulosic sugars through a combination of patented biological processes.  Last year, Edeniq generated about $20 million in revenues and about $6 million in EBITDA, Aemetis said.

Aemetis officials believe that the Edeniq technology puts their company in a leadership position to produce cellulosic advanced fuels. Edeniq’s milling and enzyme technology increases ethanol production from starch by as much as 4 percent and adds as much as 2.5 percent cellulosic ethanol production from existing kernel corn fiber, Aemetis told investors. 

The process results in more ethanol from corn, more corn oil recovered and higher yield or more throughput. The potential revenue increases in a 60 MMgy plant would be $3 million more from starch ethanol and corn oil and $7 million from cellulosic ethanol from corn fiber, including the renewable identification number (RIN) and Low Carbon Fuel Standard credits, for a potential increase of $10 million in additional annual revenue.