KiOR announces Q1 results, progress at Columbus facility
KiOR Inc. has released financial results for the first quarter of 2013, noting continued progress with operations at its facility in Columbus, Miss. The company announced the initial shipments of cellulosic diesel from the plant in mid-March.
"The on-stream percentage of our core technology in the first quarter improved approximately 500 percent over the fourth quarter. Most of our individual run times are longer than the previous runs, and we are working toward taking the facility into a steady state of operations,” said Fred Cannon, president and CEO of KiOR. “"Most significantly, our core technology is continuing to operate as designed, and the facility is producing high quality oil and cellulosic fuel. With these positive trends, we expect that our fuel shipments will increase and become more frequent."
During a call to discuss the quarterly results, Cannon said the company’s core technology continues to perform at or above expectations. He also noted the facility is currently running. During the first three months of 2013, the conversion unit at the Columbus facility operated for a total of 441 hours, Cannon continued. That runtime equated to a on-stream percentage of approximately 20 percent, a 500 percent improvement compared to the final quarter of last year.
“In general, each run at the facility is longer than the previous one, and we are seeing these longer runs without any compromise in the high quality of the oil that the facility produces,” Cannon said, noting that KiOR’s BFCC technology has performed consistently throughout these runs. “These are the types of trends that we’d like to see,” he continued. “We want our run times to be longer and our downtimes to be shorter.”
Cannon also addressed downtimes at the facility. According to Cannon, when the team identifies something that needs to be fixed or calibrated, those actions are completed with the utmost concern for employee safety and the long-term condition of the plant. As a result, those adjustments can take a few days to a couple of weeks to make. “That time allows us to bring the full operation down safely, make our changes, fixes or adjustments, check and test our work, and then take the right amount of time to carefully bring it back up again according to our start-up and operating procedures.”
Cannon estimated that approximately 70 percent of the downtime experienced during the quarter was associated with addressing typical issues in the plant’s vapor recovery unit (VRU). Issues in the VRU reflect the impact of typical variable start-up operations and minor problems elsewhere in the plant, he explained. “The good news is these issues are not indicative of major design issues or an issue with our core BFCC technology,” Cannon said. The remaining plant downtime in the quarter is attributed to one-time mechanical issues in the utilities and wood processing systems. Those issues have since been corrected.
Moving into the second quarter, Cannon said he expects the on-stream percentage and average production run to increase when compared to the first quarter. “We have already had a production run at the converter in April that nearly matched our average performance during the first quarter,” he said. The plant is currently expected to produce between 300,000 and 500,000 gallons of fuel during the second quarter, which is on track with KiOR’s production range of 3 million to 5 million gallons for 2013.
During the call, Cannon also addressed the renewable fuel standard (RFS), noting that current discussions of the program are focused extensively on ethanol, not the cellulosic or other fuels the RFS was designed to generate. “Somewhere along the line, the renewable fuel standard became little more than the ethanol fuel standard in the public and political narratives,” he said. “Nothing could be further from the truth.” Rather, Cannon noted that some companies, like KiOR, are working to develop sustainable, renewable, hydrocarbon fuels.
Regarding financial results for the quarter, KiOR reported a net loss of $31.3 million, or 30 cents per share, compared to a net loss of $29.7 million, or 28 cents per share, during the fourth quarter of 2012. Net loss for the first quarter of last year was $16.8 million, or 16 cents per share.
KiOR reported total revenues of $71,000 during the first quarter of 2013, with $52,000 of that related to the sale of finished blended diesel containing cellulosic diesel from the company’s research and development facility. The remainder was related to production from the Columbus facility. In comparison, KiOR reported no revenues during the first quarter of 2012, and $87,000 in revenues for the fourth quarter of 2012.