Renewable Energy Group posts Q1 2016 profit

Renewable Energy Group (REG), a US-based biofuels producer, reported first-quarter net income of $1.6 million, after reporting a loss in the same period a year earlier.

The Iowa-based company said it had profit of 4 cents per share. Losses, adjusted for non-recurring gains, were 1 cent per share.

The biodiesel producer posted revenue of $305.6 million in the period on 98 million gallons of fuel sold. Compared to the first quarter of 2015, REG sold 63.7% more gallons of fuel resulting in an increase of 32.3%.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter was $9.9 million compared to negative $30.2 million in the prior year period.

Gross profit was $25.1 million, or 8.2% of revenues, compared to gross loss of $16.2 million, or 7% of revenues. The increase in gross profit was due to the significant increase in gallons sold along with a better margin environment.

Elsewhere, the company said it sold a total of 98.0 million gallons of fuel, an increase of 63.7, compared to the same period last year. REG added that it produced 86.2 million gallons of biomass-based diesel during the quarter, a 42.1% increase.

The average price per gallon sold of biomass-based diesel decreased by 7.9% to $2.92 which was due to lower heating oil and RIN prices.

"The REG team delivered solid execution in the quarter. We continued optimizing our fleet of plants while integrating our newest biorefinery in DeForest, Wisconsin and bringing REG Geismar back online," said REG President and CEO Daniel J. Oh.

He added: "A more stable regulatory environment in the US enabled us to focus on growing our business."