Pacific Ethanol's net income reaches $71 million

by World Grain Staff
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SACRAMENTO, CALIFORNIA, U.S. — Pacific Ethanol, Inc., reported on March 28 net income for 2010 of $71 million, an improvement from the net loss of $311.4 million in 2009.

The net income for 2010 included a $119.4 million non-cash gain from bankruptcy exit, a $12.1 million non-cash loss on the company’s investment in the Front Range ethanol plant and $11.7 million in net fair value adjustments from the company’s convertible note and warrant financing.

Operating loss for the fourth-quarter ended Dec. 31, 2010, was $2.9 million, a decrease from the $253.1 million loss for the same period in 2009. Net loss to common stockholders for the fourth quarter was $12.1 million.

“Pacific Ethanol achieved significant milestones in 2010, including strengthening our balance sheet while preserving the company’s equity value and renewing the growth of our core businesses of producing and marketing low carbon renewable fuels,” said Neil Koehler, the company’s president and chief executive officer. “In addition to continuing to deliver superior logistics and value to its customers, Kinergy maintained its strong growth in marketed ethanol gallons. During the fourth quarter, we resumed production at the 60 million gallon Stockton facility. Our objective is to resume operations to an annual rate of 200 million gallons at all four Pacific Ethanol plants to best position the company to meet the increasing demand for low-carbon ethanol in the Western U.S.”

Net sales were $328.3 million for 2010, compared to $316.6 million for 2009. Total gallons sold were 271.6 million in 2010, an increase of 98.9 million gallons over the 172.7 million gallons sold in 2009.

Net sales were $134.2 million for the fourth quarter of 2010, compared to $87.9 million for the fourth quarter of 2009. Total gallons sold were 76 million for the fourth quarter of 2010, an increase of 25.5 million gallons over the 50.5 million gallons sold in the fourth quarter of 2009.

The quarter-over-quarter and year-over-year increases in net sales are primarily attributed to operation of the Magic Valley facility during 2010 whereas it was idle for much of 2009, and an increase in sales of other third-party gallons.

Fourth quarter 2010 gross profit was $1 million, compared to $1.4 million in the fourth quarter of 2009. Corn costs for the fourth quarter of 2010 increased at a higher rate than ethanol prices compared to the fourth quarter of 2009, resulting in a lower gross profit.
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