FutureFuel ‘encouraged by underlying margins on biodiesel’
In its first-quarter financials released in early May, biodiesel producer FutureFuel Corp. reported a net loss of $8.8 million, a nearly $30 million swing from its net income of $19 million in the first quarter of 2020. Revenue was $41.5 million compared to $53.1 million in the first three months of last year. Adjusted EBITDA was negative $7.8 million, down 177 percent from $10.2 million in the first quarter of 2020.
“The story of our first quarter is dominated by one week in February when Winter Storm Uri brought severe disruption to the operation of our Batesville, Arkansas, manufacturing site,” said Tom McKinlay, chief operating officer. “Natural gas prices soared to 14,000 percent of their normal values and production was curtailed in an effort to reduce natural gas consumption to its absolute minimum. Shutting down in such freezing conditions meant that the subsequent start-up was more problematic and took longer than we would typically anticipate.”
This loss of production reduced the company’s revenue by approximately $3 million, and the increased energy costs of $7.8 million led to the $8.8 million net loss for the quarter.
“Nevertheless,” McKinlay continued, “we are encouraged by the underlying margins on biodiesel, absent the impact of extreme energy costs. We are beginning to see improved opportunity in our chemicals segment with a strong sense that the worst effects of the COVID-19 pandemic in the U.S. may be behind us.”
FutureFuel owns and operates a biodiesel production facility in Batesville, Arkansas, capable of producing 59 million gallons per year. The biodiesel plant, which also refines its glycerin coproduct, features both batch and continuous processing and is capable of utilizing multiple feedstocks. Raw material inputs include distillers corn oil, used cooking oil, tallow, lard and soybean oil. FutureFuel is a BQ-9000-certified producer.