Aventine Renewable Energy Holdings

Nov 4, 2015

Enlarge Pacific Ethanol reported a $15 million loss in the third quarter, despite a rise in sales. A huge increase in sales didn’t help Sacramento-based Pacific Ethanol Inc. earn a profit in the third quarter this year. The renewable fuel company lost $15 million in its third quarter, compared to a gain of $3.7 million in the year-earlier period. Part of that was a one-time charge of $8.7 million for the purchase of assets from Aventine Renewable Energy Holdings Inc. , a large Midwestern ethanol producer. Enlarge Pacific Ethanol reported a $15 million loss in the third quarter, despite a rise in sales. The company saw sales rise 38 percent, from $275.6 million in the third quarter last year to $380.6 million in the third quarter this year. Through three quarters, Pacific Ethanol (Nasdaq: PEIX) lost $19 million, down from a gain of $7.8 million though the first nine months the previous year. Part of the decrease in earnings through the first nine months comes from major expenses. The company in June paid $3.8 million to re-purchase the final 4 percent of its four production plants, which it had sold during the downturn, in addition to the cost of buying the Aventine plant. The company closed the acquisition of Aventine on July 1, which more than doubled Pacific Ethanol’s capacity. Also, as has been the case for most of this year, market forces hit both revenue and profits. The company uses corn to produce ethanol for motor fuel. Because of market swings in prices, the company produced more ethanol, but because of low gasoline fuel prices, got paid less for it. Pacific Ethanol sold 211.6 million gallons of ethanol in the third quarter, up 58 percent from $133.7 million gallons in the same period the year earlier. It sold the fuel for an average price of $1.67 per gallon in the third quarter this year, down 28 percent from an average price of $2.32 per gallon in the year-earlier period. “We remain focused on optimizing all of our assets, expanding our ethanol marketing, and building on our success of implementing plant improvement and yield enhancement initiatives," said CEO Neil Koehler in a news release. "We are well positioned to expand our market share and improve our financial results.” Mark Anderson covers technology, agriculture, banking and finance, venture capital, energy, mining and hospitality for the Sacramento Business Journal. Related Content