GTL Resources' revenue nearly doubles

By Holly Jessen | June 10, 2010
Posted June 23, 2010

GTL Resources, the company that owns and operates Illinois River Energy LLC, reported revenue of $216.6 million in the fiscal year that ended March 31. That's a 49 percent increase from the previous year's total of $145.5 million.

Pre-tax profit was at $14.2 million, an increase of $32.9 million from last yearwhen the company had an annual loss of $18.4 million. For shareholders, basic earnings per share were 39 cents, said Julia Henderson, non-executive chairman. Stack that up next to a nearly 51 cent loss per share last year. "This much stronger performance for the Group was driven primarily by running IRE, the Group's ethanol plant in Rochelle, Ill., at its expanded volume for the full year and by achieving significantly improved ethanol commodity margins," she said.

Although the plants nameplate capacity is 100 MMgy, the company completed process improvements and is currently producing between 110 to 115 MMgy. In the last year, the company sold 103 million gallons of ethanol, a 61 percent increase from the previous year's 64 million gallons. In addition, GTL shipped 283,000 tons of distillers grains, a 66 percent increase over last year.

The increased production came despite a small fire in October 2009 that forced the ethanol plant to shut down half of its production for 43 days, said Richard Ruebe, CEO of GTL Group. The company has received business interruption insurance claim reimbursements for $500,000 and another $1 million is expected. Losses were for repair and replacement of damaged equipment and business interruption.

The company and its commercial partners have invested more than $1 million in two bio-refinery pilot operations at the site of the ethanol plant. It is partnering with Quality Technology International Inc. to research using dry fractionation to produce high oil germ for the edible oil market. A second partnership is with Prairie Gold Inc. to extract zein protein from corn flour for possible use in the food and pharmaceutical industries as an edible, biodegradable coating and encapsulant. "GTL's view is that to be successful long-term in the biofuels business, we will have to do more than simply ferment corn into ethanol," Ruebe said.

As expected, commodity margins are currently lower than the highs experienced during the fourth quarter of 2009. Current margins are at the same levels now as they were last year, however. The company expects industry capacity utilization will increase slowly over the next year. "Whilst we may not necessarily see a repeat of the high margins achieved in calendar year 2009," Ruebe said, "we believe that as higher ethanol blend levels work their way into the market, supply versus demand will move in the company's favor and ethanol margins should ultimately benefit."