Gevo releases Q4 results, provides operational update
Gevo Inc. has announced financial results for the final quarter of 2012. The company reported revenue of $1.9 for the three months ended Dec. 31, a decrease compared to the $$14.2 million reported during the same period of 2011. Gevo attributes the drop to the suspension of ethanol production at its Luverne, Minn., plant in May 2012.
As previously announced, Gevo concluded initial startup operations at the Luverne plant for isobutnaol production during the final quarter of 2012, but temporarily paused production at the facility to focus on technology optimization to enhance isobutanol production rates.
During the quarter, research and development expenses decreased from the year prior, from $5.9 million during the fourth quarter of 2011 to $4.3 million during the same period of 2012. The higher expense level in 2011 is attributed to work performed at the South Hampton Resources Inc. facility in Texas to develop a hydrocarbon pilot plant. That work was completed in the final quarter of 2011.
Selling, general, administrative and other expenses also decreased to $7.8 million during the quarter, from $8.9 million during the same period of 2011. The reduction is attributed to several factors, including lower compensation expenses that resulted from the decision of Gevo’s executive officers to waive their 2012 bonus payments. However, that decrease was partially offset by increased legal expenses, including those to support the company’s ongoing litigation with Butamax. The net loss for the quarter was $13.2 million.
During a call to discuss the results, Gevo CEO Pat Gruber said the company remains on track to resume ethanol production in 2013. “Our current objectives remain the same,” he said. "Number one, produce consistent quantities and quality of isobutanol in order to meet customer demand. And two, produce isobutanol at economically viable rates. As many of you know, our trial of Butamax starts on April 1. In light of its pending litigation, I can't talk about details of technology or specific timing.”
According to Gruber, there are four primary steps will be part of the process to restart isobutanol production, the first of which is the litigation, which is expected to maintain Gevo’s freedom to operate. Second, the company must demonstrate that its process optimization activities have successfully minimized the risk of infection and/or contamination of fermentation at the Luverne plant. The third step is to utilize next-generation strains of biocatalyst to produce isobutnaol using the fully integrated commercial-scale system. Finally, the company aims to produce consistent quantities and qualities of isobutanol at economically viable rates this year.