Gevo discusses future plans for Luverne plant
Gevo Inc. has announced first quarter financial results, reporting revenue of $5.6 million and a gross loss of $3.8 million. During an investor call, the company described plans to convert its Luverne, Minnesota, biorefinery to exclusively produce isobutanol and hydrocarbon products.
Revenue for the quarter was $5.6 million, down from $6.3 million during the same quarter of 2016. Revenue derived from ethanol sales and related products was $5.5 million, down $300,000 when compared to the first quarter of last year. The decrease is primarily attributed to lower ethanol and distiller grain prices. Hydrocarbon revenues were $100,000, down $200,000 from the same period of 2016. The loss from operations at $7.2 million.
Gross loss was $3.8 million, compared to $2.9 million during the first quarter of last year. Loss from operations was $7.2 million, compared to $5.9 million during the same period of 2016. The non-GAAP cash EBITDA loss was $5.4 million compared to $3.9 million during the first quarter of last year. Net loss was $5.9 million compared to $3.6 million during the first quarter of 2016. The non-GAAP adjusted net loss was $7.9 million, compared to $8 million during the first quarter of last year.The company reported net loss per share of 51 cents for the three months ending March 31, with a non-GAAP adjusted net loss per share of 68 cents.
Gevo produced approximately 100,000 gallons of isobutanol at its Luverne facility during the first quarter. According to the company, it was focused on producing sufficient quantities of isobutanol to meet immediate customer demand and providing enough inventory to support additional market and customer development efforts. Gevo’s production goals were not to maximize production, but to align production with isobutanol sales efforts. As a result, only ethanol was produced during certain periods of the quarter. The company also indicated it may elect to produce only ethanol during the second quarter of the year.
During an investor call, Patrick Gruber, CEO of Gevo, discussed future plans for the Luverne facility. The Gevo team, he said, remains laser focused on getting the company to profitability. He said the company believes the best path to achieve profitability to convert 100 percent of the grind and fermentation capacity at Luverne to its isobutanol and hydrocarbon products, specifically alcohol-to-jet (ATJ) and isooctane.
According to Gruber, Gevo is already executing on the conversion plan and is well into the engineering work needed to make it happen. The expanded plant is expected to have a capacity of more than 12 MMgy. However, Gruber noted the actual size and configuration of the expanded plant will be dependent on customer contracts, capital requirements and financing.
Given the level of engagement by customers, Gruber said the company currently expects 8-10 MMgy of that capacity to be processed into hydrocarbons. He cautioned, however, that could change for a variety of reasons.
To accomplish the build-out of Luverne, Gruber said the company has identified two key near-term goals it must accomplish. First is the restructuring of the company’s balance sheet to lessen its near-term liquidity issues. Second is the need to sign up customers for long-term supply agreements.