Abengoa highlights Hugoton plant during half year investor call

By Erin Voegele | August 03, 2015

Abengoa has released half year financial results, reporting revenues of €3.39 billion ($3.71 billion), up 3 percent when compared to the first six months of the prior year. EBITDA increased by 9 percent, reaching €650 million, while net income reached €72 million, up 5 percent compared to the same period of 2014.

Conditions regarding the company’s industrial production segment, which includes the bioenergy business, improved significantly in Europe during the second quarter. However, the company said conditions remain challenging in the U.S, impacting margins and EBITDA. Segment revenues decreased 2 percent, reaching €972 million. EBITDA was €16 million, down 80 percent compared to the €84 million reported for the first six months of last year.

During an investor call to discuss the results, Santiago Seage, CEO of Abenoga, noted that bioenergy revenues decreased by 2 percent during the first half of the year, EBITDA margin was $16 million at the end of the first half, with the second quarter representing $23 million of EBITDA. In general, he said the company is seeing significantly higher crush spreads in Europe with a healthy market at this point in time. The second part of the year also looks like it will be strong, he said. The U.S., however, continues to have lower crush spreads than the company would like to see, he said.

Seage also briefly addressed the status of Abengoa’s cellulosic ethanol plant in Hugoton, Kansas. The facility did produce ethanol and electricity during the first half of the year, he said, although at lower than designed capacity. The company’s priority during the second half of the year will be to continue working on improving the process with the objective of ramping up to something close to full capacity next year.

During the call, Seage also indicated Abengoa believes the cellulosic technology will be competitive at reasonably low oil prices. What we need to do now, is improve the process, improve the costs, and roll out the technology, he said.