Neil Koehler, president and CEO of Pacific Ethanol Inc., announced on May 13 the company is gradually increasing production as fuel demand increases and margins improve. The company is now operating at approximately 50 percent capacity after idling more than 60 percent of its ethanol production capacity due to falling fuel demand caused by the COVID-19 pandemic.
Koehler discussed Pacific Ethanol&rsquo;s current production status during the company&rsquo;s first quarter earnings call. He opened the call by acknowledging those most affected by the pandemic and thanking health care professionals and first responders for their work in fighting the COVID-19 pandemic.
He noted Pacific Ethanol is an essential business that provides low-carbon, renewable fuels, pharmaceutical-grade alcohol and high-protein feed products. &ldquo;I&rsquo;m pleased to report that we have operated safely with our full workforce at our operating facilities,&rdquo; he said. &ldquo;I&rsquo;d like to thank our employees for their commitment. They&rsquo;ve been able to continue to work with physical distancing and other protective protocols now as part of our standard operating procedures.&rdquo;
Koehler discussed the pandemic&rsquo;s impact on fuel demand and said the company initially idled more than 60 percent of its ethanol production capacity due to low fuel demand and a negative margin environment.
He said the overall market is beginning to recover from the historic downturn. &ldquo;We entered the first quarter with a continued supply and demand imbalance, which negatively impacted margins,&rdquo; Koehler said, noting that stay-at-home orders and other COVID-19-related factors caused demand for ethanol and gasoline to drop by approximately 50 percent.
&ldquo;With the collapse in ethanol prices and margins, the industry responded quickly through an unprecedented idling of approximately 50 percent of capacity,&rdquo; he continued, noting Pacific Ethanol was quick to idle ethanol production capacity that was not cash flow positive.
&ldquo;Based on increasing demand and improving margins, we are gradually increasing production and are currently operating at about 50 percent of total capacity,&rdquo; Koehler said. While fuel demand has been rebounding in recent weeks, he stressed that production margins are still challenging. &ldquo;While there is still a long way to go in both demand and margins, we are encouraged by this trend,&rdquo; he added. &ldquo;We will continue to monitor market trends and adjust our production levels in response to market signals.&rdquo;
Pacific Ethanol reported first quarter net sale of $311.4 million, down from $355.8 million during the same period of last year. Total gallons sold reached 184.9 million, down from 211.8 million. Total production gallons sold was 116.5 million, down from 122.5 million. Gross loss was $12.9 million, compared to a gross loss of $2.3 million reported for the first quarter of 2019. Operating loss was $23.1 million, compared to $10.5 million. Loss available to common stockholders was $25.4 million, or 47 cents per share, compared to $13.2 million, or 29 cents per share, during the first quarter of last year. Adjusted EBITDA was negative $12.3 million, compared to positive $1.6 million.
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Neil Koehler, president and CEO of Pacific Ethanol Inc., announced on May 13 the company is gradually increasing production as fuel demand increase and margins improve. The company is now operating at approximately 50 percent capacity.

Pacific Ethanol gradually increases ethanol production volumes

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