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VeraSun Energy reports strong second-quarter financial results

Agriculture.com Staff 08/08/2006 @ 7:54am

VeraSun Energy Corporation yesterday announced strong second quarter financial results, with net income for the second quarter of 2006 of $19.6 million or $0.29 per diluted share.

"We had a strong second quarter as ethanol prices rose and many of our refiner customers converted to blending ethanol for its high octane and clean burning characteristics," said VeraSun chairman and CEO Don Endres. "Our results were also driven by the additional volume provided by the expansion of our Aurora, S.D., facility and the addition of our Fort Dodge, Iowa, facility, which increased our ethanol shipments by 36 million gallons for the second quarter of 2006 compared to the 2005 period.

"We are continuing to implement our growth strategy. Construction of our Charles City, Iowa, facility is on schedule, land has been acquired for our planned Welcome, Minn., facility and we selected Hartley, Iowa, as the site location for our planned northwestern Iowa facility," Endres added.

Total revenues increased $118.7 million to $153.1 million for the second quarter of 2006 from $34.5 million for the same period of 2005. The growth was the result of an increase of 36.0 million gallons of ethanol shipped in the quarter reflecting added capacity, as well as a price improvement of $1.04 per gallon of ethanol compared to the second quarter of 2005.

Cost of goods sold increased $54.2 million for the second quarter of 2006 due to the increase in production of 36.0 million gallons. Corn costs increased $25.5 million to $43.0 million from $17.5 million for the same period in 2005. These costs represented 47.7% of cost of goods sold, before taking into account co-product sales.

Natural gas costs increased $8.8 million to $13.5 million from $4.7 million for the same period of 2005, and accounted for 15% of the cost of goods sold. Transportation expense increased $9.0 million to $13.9 million from $4.9 million for the same period of 2005, and accounted for 15.4 percent of cost of goods sold.

Net income increased to $19.6 million for the second quarter of 2006, or 12.8 percent of total revenues, compared to a loss of $3.9 million for the same period of 2005, and included $21.5 million of charges relating to the IPO that affected comparability.

VeraSun Energy Corporation yesterday announced strong second quarter financial results, with net income for the second quarter of 2006 of $19.6 million or $0.29 per diluted share.

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