Renewable Energy Group (REG) has reported its third quarter results for 2019, highlighting ‘satisfactory’ performance in spite of uncertainty surrounding the lapsed biodiesel tax credit and the increased number of small refinery exemptions under the Trump administration.
Revenues for the quarter were $584.4 million (€527.2 million) from 187.5 million gallons of fuel sold. Net loss from continuing operations attributable to common stockholders was $13.8 million (€12.4 million), which includes an $11.1 million (€10 million) charge related to the closure of the company’s biodiesel plant in New Boston, Texas.
Adjusted EBITDA in the third quarter was $10.6 million (€9.6 million), down from $39.4 million (€35.5 million) in the corresponding quarter of 2018.
“Our performance was satisfactory even in the face of the uncertainty around the lapsed BTC [biodiesel tax credit] and excessive small refinery waivers, both of which contributed to compressed margins,” said Cynthia Warner, president and CEO of REG. “We generated positive adjusted EBITDA of $11 million, which does not include the potential benefit of a retroactive BTC reinstatement. Importantly, we improved our product mix by increasing renewable diesel sales and concentrating on the most profitable gallons and market placement.
“We are committed to running a profitable business, with or without the BTC. Our profit improvement, growth and value creation strategies are taking root and we believe provide a foundation for success in the future."
Biodiesel fuel sales
The company reported sales of 187.5 million gallons of fuel in the third quarter of 2019, an increase of 4.9%. REG produced a total of 137.1 million gallons of biomass-based diesel during the quarter, with production at Geismar, the company’s renewable diesel biorefinery in Louisiana, up 7%.
Revenues were down 2%, resulting from an 8.9% lower average selling price for all biomass-based diesel gallons, which was partially offset by an increase in gallons sold. The average selling price per gallon was $2.76 (€2.49), down largely due to lower biodiesel prices, partially offset by higher realised prices from international renewable diesel sales. REG’s average US biodiesel price was down 14.4% from the third quarter of 2018.
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