SIRE releases financial results, expects good financial year

Southwest Iowa Renewable Energy

May 7, 2015

BY Southwest Iowa Renewable Energy LLC

On May 6, Southwest Iowa Renewable Energy LLC announced its unaudited financial results for the three and six months ended March 31, 2015.

SIRE reported net income for the six months ended March 31, 2015 of $6.9 million or $519.10 per basic unit compared to $30.0 million or $2,283.09 per basic unit for the six months ended March 31, 2014, and SIRE reported a net loss of $2.9 million or $218.35 per basic unit for the three months ended March 31, 2015, compared to a net income of $19.2 million or $1,456.94 per basic unit for the three months ended March 31, 2014.

SIRE revenue from operations was $128.0 million in the six months ended March 31, 2015 compared to $163.2 million in the six months ended March 31, 2014 and $55.5 million in the three months ended March 31, 2015 compared to $83.0 million in the three months ended March 31, 2014.

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Modified EBITDA, which is defined as earnings before interest, income taxes, depreciation, amortization, unrealized hedging gains and losses, and other significant noncash expenses was $17.7 million for the six months ended March 31, 2015, compared to $39.1 million for the six months ended March 31, 2014 and $1.0 million for the three months ended March 31, 2015, compared to $23.3 million for the three months ended March 31, 2014.

SIRE had $6.8 million in cash and cash equivalents and $15.6 million available under revolving loan agreements, for a total cash and available borrowings of $22.4 million at March 31, 2015. The cash flow from operations was $19.6 million compared to $31.5 million for the six months ended March 31, 2015 and 2014, respectively.

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Brian Cahill, president and CEO of SIRE stated, “During this second quarter of fiscal 2015, margins compressed significantly, as energy prices declined overall, with ethanol adjusting to remain very competitive with wholesale gasoline. Demand for ethanol continues to be strong with the lower prices, both in the U.S. and abroad. The industry has continued to adjust and we expect we will have another good year."

During the second quarter of Fiscal 2015, SIRE produced 28.6 million gallons of ethanol, slowing production at times when rail transportation was not available, as well as accelerating the annual maintenance shutdown and related expenses, to March rather than April, when it historically occurred. Cahill commented - "We continue to focus on running the plant efficiently, with a balance of optimizing the yield and profit." SIRE recorded a $4.7 million non-cash charge in the first quarter and a $0.6 million fair value adjustment in the second quarter in conjunction with the final payment of subordinated debt, and the related put option issued to ICM Inc. in December 2014.

2015 Second Quarter Highlights:
- SIRE declared a dividend of $1,000 per unit, which was paid in January.
- SIRE accelerated the annual shutdown to March due to lower crush margins in the second quarter.

 

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