Written by The Business Journal Staff
Sacramento-based low-carbon fuel producer Pacific Ethanol on Wednesday reported its financial results for the three months ended March 31.
For the first quarter of 2016, the company reported net sales grew 66 percent to $342.4 million.
Pacific’s gross profit during the quarter was $1.1 million, an increase of $2.1 million compared to Q1 2015, when the company reported a loss.
Although the company still booked a net loss of $13.5 million for the quarter, Pacific President and CEO Neil Koehler was upbeat about the results.
“For the first quarter of 2016, we reported net sales of $342.4 million, gross profit of $1.1 million and a positive Adjusted EBITDA of $1.6 million, all of which represent significant growth over the same period last year,” Koehler said. “We also paid off $17 million of our term debt in the first quarter resulting in our four Western ethanol plants becoming completely debt free.”
Koehler blamed “seasonal patterns in supply and demand” for creating “a challenging market environment,” but added that the company “continued to execute well on our strategy to leverage our diverse base of production and marketing assets to expand our share of the renewable fuel and co-product markets.”
“Current ethanol production margins have improved over the first quarter levels as both production and inventory have moderated in the face of growing ethanol demand,” Koehler added.
Pacific Ethanol’s stock, traded on the NASDAQ under the ticker PEIX, reacted positively to the earnings news, climbing more than 1 percent to $4.32 in Thursday morning trading.
“With our production assets uniquely positioned in the Midwest and Western United States, we are able to spread our commodity and basis price risks across diverse markets and products,” Koehler said. “In addition, our diverse revenue base helps mitigate our exposure to ethanol pricing pressure as we are able to improve our performance across margin cycles.”