Soybean prices crush Ames-based biodiesel maker's profits
Renewable Energy Group expecting $7M loss for 3rd quarter
Renewable Energy Group, the nation's largest biodiesel maker, is feeling the pinch of high soybean prices.
The Ames-based company Monday said it now expects a much wider loss for its third fiscal quarter. On an EBITDA basis, the company expects to lose $7 million versus a previously forecast loss of $2 million.
The wider loss is expected despite an improved sales forecast of 60 million to 63 million gallons of biodiesel, versus previous guidance of 55 to 60 million gallons.
The change is directly related to movements in commodity prices, a company statement said, a steep depreciation in the price of RINs (renewable identification numbers for tax credit purposes) and tighter margins than expected the company said.REG President and CEO Daniel Oh said the company remains optimistic about long-term prospects for Renewable Energy Group and the biodiesel industry despite the fluctuations in its markets. He said the company still has a strong balance sheet and the company's flexible feedstock technology provides it with a long-term cost advantage.