Pacific Ethanol reports record profit in 2014

Source: BY MARK GLOVER, Sacramento Bee • Posted: Thursday, March 5, 2015

Continuing a comeback after a bankruptcy filing six years ago, Pacific Ethanol Inc. said Wednesday that it rang up a record profits in 2014.

PEI reported record net income available to common shareholders of $20 million, or 88 cents a share, for all of 2014. The income represented a major improvement compared with a loss of $2 million, or 17 cents a share, in 2013. In 2012, PEI reported a loss of $19 million.

Fourth-quarter net income was $12.2 million, or 50 cents a share, compared with a profit of $8.3 million, or 54 cents per share, in the final quarter of 2013.

The Sacramento-based ethanol producer also set annual records in net sales – $1.1 billion in 2014, compared with $908.4 million in 2013 – and in operating income, $91.4 million last year vs. $18.9 million for 2013.

On Wednesday, Paul Koehler, PEI’s vice president of corporate development, said the results bode well for 2015. This year “has started off a little choppier with a bit of an oversupply of ethanol vs. demand,” he said. “But that’s seasonal in the first quarter, and we expect that to balance out and expect 2015 to be a solid year.”

He said PEI’s long road back from its production units’ 2009 bankruptcy “has just been focusing our attention on improving performance of our plants and marketing business and working through the vagaries of the industry.”

Following its filing, the company lost control to lenders of its four ethanol production plants – in Stockton, Madera, Idaho and Oregon – but eventually brought them out of bankruptcy in June 2010. “Tenacity is one of those things that has paid off,” said Koehler.

The company also has been helped by a drop in corn prices, which makes ethanol production more profitable.

In a statement Wednesday accompanying its earnings report, PEI President and CEO Neil Koehler said: “Our record financial and operating results in 2014 are a culmination of numerous efficiency and debt-reduction initiatives we implemented over the past several years combined with strong market fundamentals.”

PEI closed 2014 by announcing it is buying Illinois-based ethanol producer Aventine Renewable Energy Holdings Inc. in a stock-for-stock transaction valued at nearly $200 million.

In his statement, CEO Koehler noted that “we are both reinvesting in our production assets and pursuing a merger with Aventine that will redefine Pacific Ethanol’s competitive position in the ethanol industry, making us the fifth largest ethanol producer and marketer in the country.”

PEI’s stock rose 17 cents, to $9.33 a share, Wednesday on the Nasdaq. The company’s financial report was released after the market closed; in after-hours trading, the stock price spiked another $1.08, or more than 11.5 percent, to end the day at $10.41 a share.

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