REG reports progress with renewable diesel, chemical operations

By Erin Voegele | March 05, 2015

The Renewable Energy Group Inc. has released 2014 financial results, reporting revenue of $1.27 billion, down 15 percent from 2013. Net income was $82.5 million, compared to $186.37 million the prior year. Adjusted EBITDA was $107.8 million last year, down 27 percent from the previous year.

The volume of gallons sold reached 287 million, up 11 percent from 2013. The average price of B100 including renewable identification numbers (RINs), however, dropped from $4.58 per gallon in 2013 to $3.62 per gallon last year.

Production capacity increased, reaching 332 million gallons per year. In addition, REG expanded product lines into renewable hydrocarbon and renewable chemicals and expanded geographically into Europe.

In the fourth quarter, REG sold 74 million gallons of biomass based diesel, up 2 percent from the same period of 2013. Revenue was $337.6 million for the quarter, down 14 percent from the same three-month period of the previous year. The average selling price of B100 was $3.03 per gallon, down 29 percent from the third quarter of 2013. Net income attributable to common shareholders was $69.4 million, or $1.61 per share on a fully diluted basis, compared to a net income of $30.1 million, or 80 cents per share on a fully diluted basis during the same quarter of 2013. Adjusted EBITDA was $34 million, down 6 percent from the fourth quarter of the previous year.

"This past year we delivered solid results despite a rapidly declining energy market and market uncertainty," said Daniel J. Oh, president and CEO of REG. "Our business model has enabled us to grow consistently, invest in adjacent opportunities, maneuver through market challenges and do so profitably. Our business is proving itself to be durable, reliable and profitable."

During an investor call, Oh spoke about REG’s recent acquisition of the 75 MMgy Dynamic Fuels facility, which produces renewable hydrocarbon diesel (RHD). The facility, now known as REG Geismar, produced more than 10 million gallons of RHD in the fourth quarter. According to Oh, the facility is already operating at a run-rate of more than 90 percent. While additional upgrades are ongoing, he said REG is confident the Geismar plant will continue to ramp-up in 2015 and become a meaningful contributor to the company’s financial performance.

Oh also briefly discussed the operations of REG Life Sciences. REG acquired the business, which was previously known as LS9, in early 2014. The company is developing a platform to convert simple sugars and glycerin into biobased products. According to Oh, progress is being made to bring products to the market, and the company expects to report revenue from the REG Life Sciences platform during the second half of this year.