REG: Operations improving at Geismar facility

By Erin Voegele | November 04, 2016

Renewable Energy Group Inc. recently released third quarter financial results, providing updates of operations at its Geismar renewable hydrocarbon diesel facility, its biodiesel operations, and other activities.

During an investor call, Daniel Oh, president and CEO of REG, said operations at the Geismar plant were mixed during the third quarter, but are steadily improving. The facility lost 10 days of production due to local area flooding in Louisiana in August. While the plant itself did not experience any flooding, he said, employees were unable to get to the facility. In addition, scheduled maintenance was pulled forward from October to September, resulting in an additional 27 days of downtime during the quarter. As a result, Oh said the facility will be running more than originally intended during the fourth quarter.

Since the maintenance turnaround was completed, Oh said Geismar has been running consistency at approximately 95 percent capacity. The plant produced 5 million gallons of renewable hydrocarbon diesel in October after coming online on Oct. 5, he added, compared to 7.1 million gallons produced at the facility during the entire third quarter. According to Oh, there is no planned downtime at the Geismar facility for the remainder of the year.

Overall, REG sold a total of 163.1 million gallons of fuel during the third quarter, up 36 percent. The company produced 114.8 million gallons of biomass-based diesel during the quarter, up 35.2 percent. The average price per gallon of biomass-based diesel increased by 22.2 percent, reaching $3.14, as a result of generally improving market conditions and reinstatement of the biodiesel mixture excise tax credit (BTC).  

"We achieved solid growth in the third quarter with significant increases in gallons sold, gallons produced, revenue and adjusted EBITDA," Oh said. "REG Life Sciences delivered its first commercial product last week, our biomass-based diesel fleet is operating efficiently and profitably and REG Geismar is up and running well with no planned downtime for the remainder of the year. We believe we are positioned for a strong finish to the year."

Revenues for the quarter were $624.6 million. Gross profit was $47.3 million, compared to $4.4 million during the third quarter of 2015. Net income attributable to common stockholders was $22.9 million, or 59 cents per share on a fully diluted basis, compared to a net loss of $15.7 million, or 36 cents per share on a fully diluted basis, during the same quarter of last year.