KiOR on budget, on track for opening first commercial biofuels plant in 2012

In Texas, KiOR, announced a fourth quarter 2011 net loss of $14.9 million, or $0.15 per share, compared to a net loss of $14.8 million, or $0.15 per share, for the third quarter of 2011. Net loss for the fourth quarter of 2010 totaled $9.7 million, or $0.11 per share. Net loss for the full year 2011 was $64.1 million, or $0.87 per share, compared to a net loss of $45.9 million, or $0.56 per share in 2010.  The cash balance stood at $132 million at year-end, down from $152 million as of the end of Q3.

KiOR did not recognize revenue during 2011, as its activities remained focused on construction of its first commercial facility in Columbus, Mississippi, research and development (R&D) designed to improve production yields and obtaining necessary financing for its expansion plan.

“Today, the construction stands at over 75% complete, and we remain on target to meet our goal of first production in the second half of the year.” said KiOR CEO Fred Cannon.

The company reports that the cost of the first commercial plant remains at $222 million and that start up remains on target for the second half of this year. The company also announced that it has focused on a site in Natchez, MS for a second facility, instead of a site in Newton, MS which will now be the site of a third commercial project. Management said that the site has river access for feedstock and product shipments, and natural gas pipeline and electric power already on site.

Analysts comment

Rob Stone and James Medvedeff of Cowen & Company wrote: “Q4:11 loss was in line with St. The first commercial plant is slightly ahead of construction schedule and on budget. A new second site, Natchez, MS, offers numerous advantages. Fundraising is planned once Columbus proves out. KIOR set conservative yield expectations while the first plant ramps, but R&D progress in several areas points to L-T improvement. We see 50% plus upside in KIOR relative to the market in 12 months.”

At Raymond James, Pavel Molchanov wrote: “Balancing our positive view on the company’s technology platform with scale-up and project financing risk, we reiterate our Outperform rating. Consistent with Gen2 peers, we apply a discounted cash flow approach to arrive at a DCF value of $14.10 per share (see page 2 for details).  Shares are currently trading at 82% of our DCF estimate, and our new target price of $14.00 (up from $13.50) is based on the DCF.”