Gevo reports loss of $7.3M for Q1 3015 as revenues improve
In Colorado, Gevo announced a net loss of $7.3 million for Q1 2015 compared to $12.0 million in Q1 2014. The company ended the first quarter with cash and cash equivalents of $4.4 million, and the exercise of warrants since the beginning of April 2015 is expected to result in net proceeds of $6.2 million.
Revenue in first quarter 2015 was $5.9 million, as compared to $0.9 million for the same quarter in 2014, but down from Q4 2014 revenues of $14M due to a combination of 1) lower ethanol prices and 2) lower overall ethanol and isobutanol production. Gevo took advantage of weaker ethanol margins in the quarter to take the plant down for various maintenance initiatives, which resulted in an overall decrease in alcohol gallons produced in the quarter.
Gevo’s plant in Luverne, Minn., continued to operate under the Side-by-Side (SBS) operating mode, providing the capability of producing both isobutanol and ethanol simultaneously. Isobutanol batches were successfully run in the quarter, in order to prove out several process improvements, as well as to support due diligence efforts by potential licensees. The projected economics of full-scale isobutanol production have been validated by third parties, with isobutanol EBITDA margins on an optimized basis estimated to be $0.50 to $1.00 per gallon.
Capital raising
Gevo also announced that it intends to offer and sell, subject to market and other conditions, common stock units. Each common stock unit will consist of one share of common stock and Series C warrants to purchase a certain number of shares of common stock. The units are to be sold by Gevo subject to market and other conditions in an underwritten public offering.
In connection with the offering, Cowen and Company, LLC is acting as sole manager. A shelf registration statement relating to the shares of common stock and warrants to be issued in the proposed offering was filed with the Securities and Exchange Commission (SEC) and is effective.
Partnership activity
Gevo pointed to significant partnership announcements in isobutanol with Praj Industries and Alaska Airlines. Gevo has been working with Praj “on numerous fronts to license and commercialize Gevo’s isobutanol technology worldwide.” Earlier this month, Gevo signed a strategic alliance agreement with Alaska Airlines, whereby Alaska Airlines will purchase Gevo’s renewable jet fuel and fly the first-ever commercial flight on alcohol-to-jet fuel (ATJ). Gevo expects to receive ASTM International certification for its jet fuel in mid-to-late 2015 and the flight is expected to occur shortly thereafter.
The company said that “it continues to see strong interest in its alcohol-to-hydrocarbons technologies, both using isobutanol and ethanol as feedstocks to produce end products such as jet fuel, isooctane, para-xylene, propylene and hydrogen. Besides its new relationship with Alaska Airlines, Gevo still anticipates establishing and announcing multiple new strategic partnerships in 2015 to accelerate the development of its hydrocarbons business. These new partnerships are expected to lead to potential investments, R&D collaborations, product sales and/or licensing opportunities.”
“We continue to receive strong interest in licensing our isobutanol technology both domestically and internationally. We are making good progress in solidifying our relationship with Praj, which we expect will be very important in accelerating our licensing and development efforts,” said Dr. Patrick Gruber, Gevo’s Chief Executive Officer.
“The interest we are seeing from potential strategic partners in our downstream technologies to convert alcohols into hydrocarbon products is highly encouraging. We are very pleased to be working with Alaska Airlines as our commercial launch partner for Gevo’s renewable jet fuel. Our jet fuel is truly a drop-in solution that could help insulate commercial airlines from spikes in fuel costs while also achieving their sustainability goals. By the end of 2015, Gevo expects to be in an excellent position to meaningfully grow its jet fuel business, both for commercial airlines and military applications. By achieving our goal of establishing multiple new strategic partnerships in 2015, we expect to be in a very good position to accelerate other hydrocarbon platforms, such as renewable propylene and renewable hydrogen,” added Gruber.
Category: Top Stories
