Aemetis reports second-quarter loss

US bioethanol producer Aemetis has reported a net loss of $5 million (€4.48m) for the second quarter ended 30 June, 2016, due to a high interest expense.

Revenues were $33.1 million for the second quarter of 2016, compared to $38.1 million for the second quarter of 2015. The decline in revenue was primarily attributable to decreases in ethanol and wet distiller’s grain volumes.

The company, which also deals with speciality chemicals, said gross margin for the second quarter of 2016 was $1.9 million, the same as the gross margin of $1.9 million during the second quarter of 2015.

Selling, general and administrative expenses were $2.9 million in the second quarter of 2016, compared to $3.1 million in the second quarter of 2015. The decrease in selling, general and administrative expenses was driven by lower spending in the areas of salaries and stock compensation compared to the same period of the prior year.

Operating loss was $1.1 million for the second quarter of 2016, compared to an operating loss of $1.3 million for the same period in 2015.

Net loss was $5 million for the second quarter of 2016, compared to a net loss of $6.3 million for the second quarter of 2015.

In a conference call on Aemetis’ results, chief financial officer Todd Waltz said: “We continue to search for lower cost capital through a combination of debt refinancing as well as escrow releases from the first EB-5 (foreign investment programme) financing.”

California Energy Commission

Speaking at the same conference, CEO Eric McAfee added: “In Q2, 2016 the pricing of corn ethanol improved by 3% year-over-year. Positive margins were also supported by using the remaining grant money from the California Energy Commission related to the use of milo feedstock.

“During the first six months of 2016, our Keyes plant processed more than 70,000 tonnes of grains sorghum under the CEC alternative feed stock program. During Q3 and Q4 2016, we believe margins will continue to be positive due to the expected large corn drop and a stronger export market for ethanol.

“A primary component of our expenses is interest and feeds on our senior debt. Our biofuel plant in California has created a significant number of jobs, allowing Aemetis to raise debt using the Federal EB-5 programme at only a 3% interest rate with no principal payments for up to five years.”

Providing a second-quarter overview, McAfee added: “Pricing during the quarter improved compared to the same period last year, and gross profit for the first half of 2016 improved significantly over the first half of 2015 based upon favourable pricing on inputs and finished products as well as a grant from the California Energy Commission,”

This article was written by Liz Gyekye, editor of Biofuels International.