REG returns to profit in Q2

Renewable Energy Group (REG), a US-based biofuels producer, reported second-quarter net income of $6.9 million, after reporting a loss in the same period a year earlier.

The Ames, Iowa-based company said it had net income of 16 cents per share, for the period ended 30 June, 2016. It posted a net loss of $2 million in Q2 2015.

The biodiesel producer posted revenue of $558.3 million in the period – an increase of 49.4% compared to the same period last year.

Gross profit was $24.9 million, or 4.5% of revenues, compared to gross profit of $15.9 million, or 4.3% of revenues, the company said in a statement. The increase in gross profit was due to the significant increase in gallons sold.

The company recognised $30.5 million in risk management losses compared to $3.6 million in losses in the second quarter of 2015. The higher losses in the second quarter of 2016 are due to the increase in energy prices in the quarter.

REG recognised $13.4 million in other income due to the change in fair value of the convertible debt conversion liability related to the new convertible bonds issued in the quarter.

Gallons produced

The company sold 150.1 million gallons of fuel. Compared to the second quarter of 2015, REG sold 56.2% more gallons of fuel resulting in an increase in revenue of 49.4%.

“This was another strong quarter of growth for revenues, gallons produced and gallons sold," said REG president and CEO Daniel J. Oh.

He added:  "This growth demonstrates the strength of our core biomass-based diesel operations. We continue to make meaningful progress at REG Life Sciences and we increased our ownership in Petrotec to over 90%.

“Furthermore, we repurchased more than 4 million shares of REG common stock with proceeds from our recent convertible note offering, which also provided additional working capital."

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