GPRE surpasses expectations, revenue soars

By Luke Geiver | February 09, 2010
Posted Feb. 22, 2010

Green Plains Renewable Energy Inc., the fourth largest ethanol producer in the U.S. at nearly 480 MMgy from six plants, exceeded expected production capacity for the fourth quarter ending in December, boosting total revenue for the quarter to $436.7 million in 2009, up from $183.2 million in 2008. Operating in three segments: marketing and distribution, ethanol production, and agribusiness, GPRE attributed the surge in revenue to the ethanol operations segment. "We generated significantly higher operating income during the quarter primarily due to a strong performance from our ethanol production segment," said Todd Becker, president and CEO of GPRE.

At nearly 122 million gallons of ethanol sold in the fourth quarter, 2009 ethanol sales for GPRE rose 80 percent from 2008's total of $104.8 million to $235.9 million in 2009. According to Becker, "The combination of higher production volumes, a stronger margin environment, and harvest activities for agribusiness resulted in a record quarter." Debottlenecking their ethanol facilities helped the six plants owned by GPRE to produce more ethanol than expected. The added production capability, combined with a record corn harvest resulted in the record setting quarter, and now has GPRE confident with the state of the industry. "During 2009 and more recently, we have continued to see demand for ethanol increase driven by expanded mandates and positive blend margins," Becker said. "We believe our industry, and more importantly, our company is on solid footing for the coming years."

For now, GPRE appears to be focused on maintaining the profit trends shown in 2009. The company will remain in "defensive mode" with future spending, Becker said during a conference call regarding its financial report. Even in a conservative spending mode, GPRE plans to continue developing existing blending terminals such as the recently purchased Houston-based Blendstar LLC facility. "We want to get closer to a niche market and underserved areas," Becker said about GPRE's distribution segment. And in reference to the record profits he said, "Our business model has been tested through one of the most challenging environments the ethanol industry has seen and continues to prove itself."