REG releases Q2 financials; closes strongest quarter ever

By Renewable Energy Group Inc. | July 30, 2013

Renewable Energy Group Inc. announced its financial results for the second quarter ended June 30.

REG sold 69.2 million gallons of biodiesel in the second quarter 2013, an increase of 28 percent compared to the second quarter of 2012. Revenues of $387.1 million increased 42 percent year over year. The company achieved adjusted EBITDA of $41.6 million during the second quarter 2013.

“This was our strongest quarter ever for production and gallons sold,” said Daniel J. Oh, president and CEO. “Market demand for biodiesel remained strong due, in part, to demand for biomass-based diesel RINs. REG’s substantial revenue growth this quarter can also be attributed to manufacturing and operational improvement at our biorefineries and gallons produced via a tolling agreement.”

On July 29, REG’s acquisition of a 30 MMgy biodiesel plant from Soy Energy LLC was approved by Soy Energy unit holders. REG intends to quickly start repairs and begin production using soybean oil and lower free fatty acid feedstock as soon as possible. Also, during second quarter, major multifeedstock upgrades were completed at the Albert Lea, Minn., biorefinery and repairs, upgrades and start-up occurred at our New Boston, Texas biorefinery. Additionally, construction began on an Illinois River barge load-out at the Seneca, Ill., location.

Oh added, “A key element of our strategy is to grow production capacity by acquiring economically priced biodiesel plants, upgrading existing refinery technology to utilize lower cost raw materials, enhancing finished product margin opportunities and completing existing projects. Executing construction plans on-time and on-budget last quarter has further reinforced our strategy and our ability to execute it.”

Operating Highlights

The 69.2 million gallons of biodiesel sold in the quarter represents record volume for REG. As a reflection of implementing yield and throughput improvement programs across the company’s manufacturing sites, REG produced 56.5 million gallons of biodiesel during the quarter, which included 6.4 million toll manufactured gallons. This compares to 43.1 million gallons year-over-year.

Market demand for biodiesel strengthened as the quarter progressed. Biomass-based diesel RIN (D4) prices increased from $0.77 at the beginning of second quarter and ended the quarter at $1.07 per RIN. The increase in biodiesel RIN prices appears to reflect the ongoing fulfillment of the 2013 renewable volume obligations (RVO), as well as biodiesel RINs purchased for conventional renewable fuel (D6) RIN obligations. Biodiesel RINs can be used to fulfill the advanced biofuel and renewable fuel RVO in addition to the biomass-based diesel category. The industry appears to be on track to meet its 2013 RVO with the EPA reporting more than 635 million gallons of domestically produced biodiesel nationwide through the end of June.

Q2 Financial Results

All figures refer to the quarter ending June 30, 2013, unless otherwise noted. Adjusted EBITDA comparisons with the second quarter of 2012 include pro-rata volume based adjustments to the 2012 results to reflect the retroactive reinstatement of the Biodiesel Mixture Excise Tax Credit, commonly referred to as the blenders tax credit (BTC).

During the quarter, the average B100 price per gallon sold by REG was $4.70, a 3 percent increase year over year. REG sold 69.2 million gallons of biodiesel, an increase of 28 percent when compared to second quarter of 2012.

Revenues of $387.1 million increased 42 percent when compared to the second quarter of 2012.

Gross profit was $50.2 million, a 62 percent increase when compared to the second quarter of 2012.

Operating income of $39.0 million increased 95 percent year over year.

Net income attributable to common stockholders was $19.6 million, or $0.62 fully diluted per share. This compares to $11.3 million, or $0.39 fully diluted per share in the second quarter of 2012.

Adjusted EBITDA, defined as earnings before interest, taxes, depreciation and amortization and further adjusted for certain items … was $41.6 million. This compares to second quarter 2012 originally reported adjusted EBITDA of $26.5 million. This is before the company’s retrospective pro-rata volume allocation of the 2012 retroactive blenders tax credit in the amount of $16.6 million. After adjusting for allocation of the blenders tax credit, second quarter 2012 adjusted EBITDA totaled $43.1 million.

For more information, visit REG’s website


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