Sacramento, California-based renewable fuels producer and marketer Pacific Ethanol anticipates improved production margins in 2018, as exports and domestic demand for transportation fuels strengthen ahead of the summer driving season.
Pacific Ethanol produced a record 150.4mn gallons of ethanol during the fourth quarter of 2017, while production capacity utilization registered 96%, a 22% and 2 percentage point (p.p.) rise, respectively, compared to the same period in 2016. Gallons sold during the quarter totaled 240mn gal, a 0.4% fall from the prior year, while net sales totaled $395.3mn during the quarter, an 11% fall from the previous year driven primarily by weakened average ethanol sales prices, which fell 15% to $1.52/gal.
While quarterly data proved bearish, full-year 2017 statistics indicated further renewable fuel market bullishness, as domestic and global consumption trends continue to advance alongside GHG reduction efforts.
The company produced 527.2mn gal of ethanol during FY17, a 9% rise from the prior year, and a new company record. Total gallons sold and net sales during the period totaled 952mn gal and $1.63bn, a 3% and 0.5% respective rise from 2016 figures.
Full-year 2017 average ethanol sales price fell by 3% to $1.62/gal, while production capacity utilization registered 95%, a 2p.p. increase from 2016.
Gross profit fell to $5.9mn from $54.4mn during the previous year, due to the companies July acquisition of Illinois Corn Processing (ICP).
Pacific Ethanol president and CEO Neil Koehler stated that the company has improved their platform by further diversifying their product mix with the ICP acquisition and gained efficiencies through consolidating 250mn gal of ethanol and high-quality alcohol production at one site in Pekin, Illinois.
“We remain focused on reducing costs at all of our facilities, optimizing the profitability of our marketing business, and maintaining a strong balance sheet,” Koehler added.
Pacific Ethanol owns and operates nine bio-refinery plants across the US Midwest and West Coast, with a combined production capacity of 605mn gal annually.