Aemetis Inc. has released first quarter financial results, reporting increased ethanol revenues but reduced gross margins. In addition, the company reported its biodiesel business in India is growing. 

“During the first quarter, ethanol revenues increased by 12 percent on higher ethanol volume and prices compared to the first quarter of 2016, but gross margins were negatively impacted by an increase in feedstock costs due to an unusually wet winter in California and the resulting higher rail costs,” said Eric McAfee, chairman and CEO of Aemetis.  “During the second quarter, rail costs have returned to more normal levels and ethanol margins have improved as corn prices remain moderated.  Our business in India has entered a growth phase by recently winning a biodiesel supply contract with domestic Oil Marketing Companies in India, and we are finalizing an international biodiesel supply contract with a major oil company.  These new customers are in addition to our existing bulk and fleet customers in India.”

Aemetis owns a 60 Mmgy ethanol plant in Keyes, California, along with a 50 MMgy biodiesel facility in India.

Aemetis reported revenues of $31.6 million, down from $33.3 million for the same period of last year. Increased ethanol production and average selling price, which was offset by lower volumes of biodiesel sales.

Gross loss for the quarter was $600,000, compared to gross profit of $2.1 million during the same quarter of 2016. The company also reported that gross margins declined due to higher feedstock costs, principally from rail dislocation associated with winter weather in California and lower distillers grain prices.

Operating loss was $4 million, compared to an operating loss of $1 million reported for the same three months of last year. Net loss was $8.5 million, compared to a net loss of $5.1 million during the first quarter of 2016. Adjusted EBITDA loss was $2.4 million, compared to adjusted EBITDA of $250,000 for the same period of last year.

During an investor call, McAfee noted the company’s ethanol business grew 12 percent during the quarter, when compared to the first quarter of last year. Moving into the second quarter of this year, he said he expects revenues and margins to follow a positive trend due to stronger gasoline demand, stability in the enforcement of the Renewable Fuels Standard, strong demand for low-carbon fuels in California and in growing forward markets.

McAfee also provided an update of the company’s advanced biofuel projects. In 2016, the company signed an agreement to acquire Edeniq, which has technology to convert corn kernel fiber into cellulosic ethanol. He said the company is pleased with the progress of litigation related to the enforcement of the signed definitive agreement and believes that the documents disclosed to it during the discovery process strongly support its claims. McAfee also indicated mediation in the matter is scheduled to occur before mid-August.

The LanzaTech advanced biofuels project is continuing to achieve milestones, he added. According to McAfee, the company achieved a key permit for the project in January and has executed a lease for the project site. The company has also received phase one approval for a loan guarantee from the USDA.

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