CEO: US BioEnergy will be one of the largest ethanol shippers in 2008
US BioEnergy Corp. (Nasdaq: USBE) CEO Gordon Ommen said the ethanol producer’s expansion plans will allow the company to maintain its market position and build long-term value. Along with new ethanol plan construction, the company is building a transportation system that will allow it to move ethanol more efficiently from its facilities. Ommen made the comments during a midday conference call.
“This positions US BioEnergy to become one of the largest volume shippers of ethanol in the U.S. by the end of 2008, adding transportation efficiency to our growing list of competitive advantages,” Ommen said.
Before the opening, US BioEnergy reported third-quarter net income of $11.1 million, or $0.15 per share, above analyst estimates of $0.08 per share and up 34% from $8.3 million, or $0.12 per share, a year earlier.
For the three months ended Sept. 30, the St. Paul, Minn.-based company’s revenue totaled $148.3 million, below Wall Street projections of $154.9 million and compared with $154.4 million during the prior-year period.
Despite lower ethanol prices and sales, US BioEnergy achieved greater quarterly income by selling more volume and cutting costs. Before taking hedging-related gains and losses into account, the company’s corn costs averaged $1.25 per gallon of ethanol sold, compared with $1.35 per gallon of ethanol sold a year earlier. The firm’s total cost of goods sold during the three-month period decreased 10% to $121.3 million, from $135.2 million during the third quarter of 2006.
During the third quarter, ethanol production increased 7% to 73.1 million gallons, from 68.2 million gallons during the same period of 2006. Ommen said the company also squeezed more ethanol out of the corn it purchased, with a conversion ratio of 2.87, from 2.86 during the second quarter.
“We believe this is one of, if not the best, conversion ratios in the industry,” Ommen said.
US BioEnergy’s selling, general and administrative expenses were relatively flat at $10.8 million, from $10.2 million a year earlier.
The company will open four new plants during 2008. CFO Rich Atkinson said the firm will hire 45 to 50 employees at each plant during 2008.
During the third quarter, US BioEnergy acquired Millennium Ethanol, LLC for $133 million. Millennium changed its name to US Bio Marion following the acquisition.
During midday trading, USBE shares are up 12.7%, or $0.81, at $7.19. Over the last 52 weeks, shares have ranged from $6.20 to $17.72.
