Aventine posts second-quarter losses

By Bryan Sims | July 08, 2008
Web exclusive posted August 4, 2008 at 10:29 a.m. CST

Pekin, Ill.-based Aventine Renewable Energy Holdings Inc., a leading producer and marketer of ethanol, posted a $1.9 million net loss in its second-quarter earnings report but also reported that it sold a record 220.3 million gallons of ethanol during that same period.

During the same period a year ago, the company reported a profit of $12.6 million. The profit decline was due to losses on its auction-rate securities that were sold in June and had to be claimed on Aventine's second-quarter earnings report. The company now has liquidated all of its remaining auction-rate securities, raising $97.1 million in the sale. In February, Aventine warned that it may have to delay construction on two new ethanol plants because some of its assets had unexpectedly been tied up in auction-rate securities that it couldn't sell. As a result, as of June 30 total liquidity was $245.7 million.

Aventine generated total revenue of $601.6 million versus $394.9 million the same quarter last year. The company also sold a record 220.3 million gallons of ethanol during the second quarter compared to 158.7 million gallons last year.

"The continued strong demand for ethanol reflects the new realities of high oil and gas prices, resulting in a record number of gallons shipped during the quarter," said Ron Miller, Aventine president and chief executive officer. "Ethanol remains the best available opportunity to help the American consumer reduce the increasingly negative impact on their household budget as a result of high gas prices."

Corn costs during the quarter rose $5.38 per bushel—92 cents lower than the Chicago Board of Trade average—compared with $3.99 per bushel last year.

In its quarterly report, Aventine also said it has entered into a purchase agreement with Nebraska Energy Coop., its minority partner in Nebraska Energy LLC, to purchase the 21.58 percent of Nebraska Energy LLC it doesn't already own by issuing 1 million shares of common stock to acquire the remaining interest. The transaction will close pending approval by existing shareholders of Nebraska Energy Cooperative.

To view Aventine's 2Q report, visit http://www.aventinerei.com/pdfs/Aventine%202nd%20quarter%20earnings%20release.pdf.