REG Q3 financials: more biodiesel sales but less revenue

By Renewable Energy Group Inc. | November 05, 2014

Renewable Energy Group Inc. announced its financial results for the third quarter ended Sept. 30.

Revenues for the quarter were $384.3 million. Compared to the third quarter of 2013, REG sold 14.4 percent more gallons of biomass-based diesel, while revenues decreased by 16.2 percent and Adjusted EBITDA decreased by 77.7 percent.

“Our third quarter results reflect a very solid financial performance despite weak market conditions, while we worked to bring REG Geismar online and continued to invest in product development,” said Daniel J. Oh, president and CEO. “Our traditional biodiesel business saw double digit volume growth of gallons sold and produced, compared to the third quarter of last year. The Mason City upgrades, which now allow that biorefinery to use lower cost feedstocks, were completed on time and within budget, and reflect our continued investment and focus on the biomass-based diesel business.”

Oh continued, “We are very pleased with the progress at REG Geismar and operations start-up that was completed safely, timely and within our budget expectations.”

Third Quarter 2014 Operating Highlights

For the third quarter, REG sold 88.8 million gallons of biodiesel, an increase of 14.4 percent compared to the third quarter of 2013. REG produced 63.8 million gallons of biodiesel during the quarter, a 12.3 percent increase when compared to the third quarter of 2013. The balance of the gallons sold consisted of 18.0 million gallons purchased from third parties and resold through the company’s distribution network and 7.0 million gallons from inventory.

REG continues to invest in its fleet of biomass-based diesel plants. The company completed the upgrades at REG Mason City and the upgrades at REG Newton are progressing as planned.

REG Geismar began production and selling renewable hydrocarbon diesel in October, restarting the plant the company acquired in June. The 75 MMgy nameplate capacity biorefinery had been in stand-by mode since December 2012.

Third Quarter 2014 Financial Results

Revenues of $384.3 million decreased 16.2 percent when compared to the third quarter of 2013. The decline is attributable to a reduction in average sales price and lower RIN prices, which more than offset the 14.4 percent increase in gallons sold. The average price per gallon of biodiesel sold during the third quarter was $3.54, or 28.5 percent lower than in the same quarter of 2013.

Gross profit was $22.7 million, or 5.9 percent of revenues, compared to gross profit of $57.8 million, or 12.6 percent of revenues, for the third quarter of 2013. The decrease in gross profit resulted from margin compression caused by lower selling prices.

Operating income was $6.0 million, compared to $45.2 million for the third quarter of 2013.

Net income attributable to common stockholders was $4.5 million, or $0.11 per share on a fully diluted basis. This compares to $78.5 million, or $2.31 per share on a fully diluted basis in the third quarter of 2013, which included tax benefits of $42.1 million, or $1.12 per share on a fully diluted basis.

Third Quarter 2014 Balance Sheet

At Sept. 30, REG had liquid assets, which includes cash, cash equivalents and marketable securities, of $128.6 million, an increase of $2.7 million during the quarter.

At Sept. 30, accounts receivable were $35.4 million, or eight days of sales, a decrease of $13.0 million from June 30. Inventory was $49.4 million, or 12 days of sales, a decrease of $20.8 million during the quarter.

For more detailed information and tables pertaining to REG’s third quarter financials, click here


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