REG unveils third quarter 2017 results

US advanced biofuels producer Renewable Energy Group has unveiled its third quarter financial result, reporting a net loss attributable to common stockholders of $11.4 million (€9.86m), compared to net income of $22.9 million in the third quarter of 2016.

All figures refer to the quarter ending 30 September, 2017.

Revenues for the quarter were $627 million on 151.5 million gallons of fuel sold.

According to REG, revenues in the third quarter were essentially flat compared to the prior year period despite the lapse of the federal Biodiesel Mixture Excise Tax Credit (BTC).

The absence of the BTC and a 7.1% decrease in gallons sold were offset by revenues from higher sales of separated RINs and a 2.2% increase in average selling price per gallon.  Adjusted EBITDA for the quarter was negative $1.5 million compared to Adjusted EBITDA in the third quarter of 2016 of $31.6 million.  The prior year Net income and Adjusted EBITDA includes net benefits from the BTC, which was in effect at that time.

"Our third quarter performance met our guidance in spite of a $25 million risk management loss," said REG interim president and CEO Randy Howard. 

Trade case

He added: "In addition, subsidised Argentine biodiesel imports continued at record levels through most of August when the preliminary trade duties were imposed.  Assuming that the federal government follows past practice and retroactively reinstates the BTC for 2017, we estimate that our Adjusted EBITDA for business conducted in first nine months of 2017 will be approximately $172 million, already surpassing our goal for the year of $150 million, so we believe that we are on track for a record year.

"We are continuing our effort to optimise our operations and make progress on our growth initiatives around renewable diesel.  Recent developments in the trade case and renewable volume obligations are positive and we look forward to further clarity in the fourth quarter on retroactive reinstatement of the BTC and possible reform to a domestic production incentive."

REG is an international producer of biomass-based diesel, a developer of renewable chemicals and North America's largest producer of advanced biofuels.