Pacific Ethanol looking to gain from positive conditions in Q4
Madera, California biorefinery. Source: Pacific Ethanol Inc. License: All Rights Reserved.
US ethanol producer and marketer Pacific Ethanol Inc (NASDAQ:PEIX) on Wednesday said it is well positioned to benefit from positive market conditions in the final quarter of 2016 as it reported a net loss of USD 3.8 million (EUR 3.4m) for the third quarter.
The company is currently seeing its best production margins of the year as a result of strong ethanol demand and low corn input costs thanks to a record corn crop, said chief executive Neil Koehler.
The third-quarter net loss compares to a USD-15-million loss a year ago and reflects more than USD 11 million of extraordinary costs that include "higher beginning inventory valuation, lower margins in the company’s ethanol trading business resulting from the intra-quarter drop in ethanol prices, significant repair expenses and non-cash mark-to-market adjustments related to open hedge positions."
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose to USD 9.3 million from USD 2.4 million.
Sales gained 10% to USD 417.8 million as the company sold a record 243.7 million gallons (922.5 million litres) of ethanol due to increased output from its eight plants, as well as a 16% rise third-party sales.
In the first nine months of the year, net loss narrowed to USD 12.6 million from USD 19 million, with sales increasing to USD 1.18 billion from USD 814.4 million.