Aemetis narrows Q3 net loss

Aemetis, a California-based advanced renewable fuels and biochemicals company, reported a narrower financial third-quarter net loss due to continued cost cuts.

The US firm reported a net loss of $4.1 million (€3.79m) for the three months ended 30 September, 2016, compared with a net loss of $5.8 million for the same period last year.

Revenues were $39.4 million for the third quarter of 2016, compared to $38.5 million for the third quarter of 2015. The increase in revenue was primarily attributable to increases in ethanol and wet distiller’s grain volumes.

Gross margin for the third quarter of 2016 was $3.7 million, a major improvement over the gross margin of $1.0 million during the third quarter of 2015. Gross margin improvement was due to an 11% decrease in the cost of feedstock.

Operating income was $357,000 for the third quarter of 2016, compared to an operating loss of $1.9 million for the same period in 2015.

We continue to experience good operational results from our North America ethanol business with gross margins at 10.3% of segment revenues. Our largest contributor to the net loss is interest expense of $4.5 million. We continue our efforts to lower our cost of capital through a combination of debt refinancing as well as escrow releases from the EB-5 financings.
 
The fundamental health and improvement in our operating North America business is reflected in Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) for the third quarter of 2016, which increased to $1.75 million compared to Adjusted EBITDA loss of $522 thousand for the same period in 2015.
 
Cash at the end of the third quarter of 2016 was $652 thousand, compared to $283 thousand at the end of the fourth quarter of 2015.

Strong demand for low-carbon fuels

Speaking on a conference call, CEO Eric McAfee, said: “In our ethanol business, during the third quarter of 2016, gross margins expanded over last year by 730 basis points to 10.3%.

“The gross margin expansion was largely due to reduction in our feedstock cost, which we expect to continue during the current crop year. Lower price of corn and increasing demand for low-carbon fuels this year has significantly improved the margin environment for corn ethanol production.

“The price of ethanol has shown strength and stability in the second half of this year. The ethanol business improved in the third quarter as the consumption of gasoline reached a new high of 9.7 million barrels per day surpassing the previous record of 9.6 million barrels per day set back in 2007 according to EAA.”