Gevo releases Q3 financial results
Gevo Inc. has released its financial results for the quarter ended Sept. 30, posting revenues of $600,000 for the quarter. This is a significant reduction compared to the $17.5 million in revenue reported for the same period of last year.
According to information released by Gevo, revenue for the most recent quarter was generated mainly under the company’s agreement with the Coca-Cola Co., and from ongoing research agreements. Last year’s higher revenue was attributed to the sale of ethanol and related products. Gevo suspended ethanol production in May, and was engaged in startup operations for the production of isobutanol at its Luverne, Minn., facility during the third quarter of 2012.
The quarter’s research and development expenses were up compared to those last year. Gevo reported $5.4 million in research and development expenses for the three months ended Sept. 30, with is slightly more than the $5.2 million reported for the same quarter of last year. Selling, generation and administrative expenses also increased, from $7.6 million last year to $13.5 million. That increase is attributed to ongoing litigation with Butamax and expenses to support initial commercialization activities.
Overall, the net loss for the third quarter of 2012 was $12.1 million, a slight reduction when compared to the $12.3 million loss posted during the same period of last year.
"With Luverne's initial startup work behind us, we are now turning our attention to further increasing future isobutanol production rates," said Patrick Gruber, CEO of Gevo. "We accomplished our initial goals of proving that we can produce isobutanol at large scale, generating bio-isobutanol for business development, and, most importantly, capturing the ’know-how’ to run a large plant, including the identification of process bottlenecks. Our goal now is to resume isobutanol production in 2013 when Luverne can generate a positive contribution margin producing isobutanol and we can become a consistent supplier to our customers. Our process technology team is currently focused on increasing isobutanol production rates and is doing work on the process technology and equipment at the plant to further enhance isobutanol production rates.”
With isobutanol production temporarily paused, Gevo plans to produce ethanol in the short-term. In addition to demonstrating the flexibility of the technology to its partners, the move will also allow Gevo to improve its cash flow.
During a call to discuss the quarterly results, Gruber stressed that the decision on whether to produce ethanol or leave the plant idle will depend on what makes the most financial sense. When it costs less to idle the plant than it does to produce ethanol, the plant will idle. Alternatively, when a profit can be made through ethanol production, the facility will operate.
The quarterly report also provided an overview of Gevo’s recent developments. In October, the company was awarded a follow-on biojet fuel order from the Defense Logistics Agency for 45,000 gallons of fuel, which will be delivered in 2013 and used for U.S. Air Force testing. Gevo also signed a letter of intent with Midwest AgEnergy Group LLC to evaluate the technical and economic considerations of retrofitting one or more of MAG ethanol plants to produce isobutanol.