REG posts record fourth-quarter profit, year-end earnings up

By Bryan Sims | February 28, 2012

Ames, Iowa-based biodiesel producer Renewable Energy Group Inc. reported record profits of $29.5 million for fourth quarter 2011 ending Dec. 31, compared to $5.5 million for the same time in 2010. The company generated $267 million in revenues for the quarter compared to $70 million during the same period in 2010.

For the full year, REG reported earnings of $107 million in 2011 compared to just $8 million in 2010. Revenues for 2011 resulted in $824 million, a 281 percent increase over 2010, “due to improved per-gallon pricing and an increase in gallons sold over the previous period,” according to a company statement.

For 2011, REG’s average B100 sales price per gallon was $5.23, an increase of 58 percent over 2010. The company said it sold a total of 150 million gallons of biodiesel in 2011—an increase of 121 percent versus 2010—attributing the improvement of biodiesel pricing and demand to favorable public policy, RFS2, higher prices for fossil-based diesel and higher RIN prices. Gallons sold in the fourth quarter increased 126 percent over the same quarter in 2010 to 47.5 million gallons.

“Biodiesel demand is growing due to the implementation of RFS2,” stated Daniel Oh, president and CEO of REG. “We are building a business with competitive advantages that can meet this demand. Going into 2012, we believe we are well-positioned as the leading producer of biodiesel from low cost feedstocks in the U.S.”

REG met increased demand for biodiesel head-on by capitalizing on creating capacity utilization and improving throughput at all of its production facilities, the acquisition and restart of a previously idled 30 MMgy plant in Albert Lea, Minn., and by having a full year of production from two lines at its 60 MMgy plant in Seneca, Ill., which commenced production in August 2010. The 2011 fourth quarter represented the first full quarter of revenue contribution from the Albert Lea plant. REG added that it plans to retrofit the facility to expand its production capabilities to run on low-cost feedstocks, which is expected to improve its operating margins upon completion. In addition to its Albert Lea and Seneca plants, REG owns or operates plants in Ralston and Newton, Iowa, in addition to facility in Danville, Ill., and a plant in Seabrook, Texas. The company has plants under construction in Clovis, N.M., Emporia, Kan., and New Orleans.

In January, REG completed an IPO of shares of common stock in which it sold 7.2 million shares at a price of $10 per share, raising a total of $72 million. In addition, REG established a five-year $40 million working capital line of credit with Wells Fargo that replaced a then-existing $10 million line of credit.


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