The low ethanol margin environment in the US affected the first-quarter (Q1) performance of sector players Green Plains, Pacific Ethanol, and Archer Daniels Midland Company (ADM).
Green Plains’ net loss widened to USD 42.8 million in the first quarter of 2019 from USD 24.1 million a year ago, and revenues contracted by 36% to USD 642.3 million. Ethanol production fell to 155 million from 280.4 million gallons.
“We believe that the worst of the low ethanol margin cycle is behind us, as margins have improved since the end of January,” said CEO Todd Becker.
Pacific Ethanol’s Q1 loss also expanded, to USD 12.9 million from USD 7.8 million a year ago, while the company also said market conditions are improving. Revenues were down 11% to USD 355.8 million. It sold 211.8 million gallons.
US-based agricultor processor ADM, one of the leading producers of ethanol in the country, in late April reported an operating loss of USD 74 million from its bioproducts segment due to the weak ethanol industry environment. It said it would create a new ethanol subsidiary to hold its dry mills in Nebraska, Iowa and Illinois. It will explore strategic alternatives for that unit, including a potential spin-off of the business to existing ADM shareholders.
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US ethanol makers post Q1 losses on low margins