Verenium, Aventine report sharp sales increases

Verenium Corporation reported quarterly revenues of $15.2 million, up from $11.3 million in the first quarter of 2007, as it commences start-up at a 1.4 Mgy demonstration scale facility in Louisiana for its cellulosic ethanol from wood waste.

Meanwhile, Aventine reported sales of 211 million gallons, up 20% over 2007 and is on track to achieve an ethanol marketing capacity of 1.2 Bgy by the end of 2008.

Raymond James analyst Pavel Molchanov commented: “Aventine posted operating earnings of $0.26 per diluted share in 1Q08, well above our estimate of $0.01 and consensus of $0.08. The company has reached the halfway mark on the construction of its two new ethanol facilities – Aurora West (Nebraska) and Mount Vernon (Indiana) – scheduled to be brought online during 1Q09. Despite the sharp rise in corn prices during the quarter, the company’s active hedging strategy tempered the pressure on its crush spread ($0.60/gal vs. the benchmark average of $0.55). Additionally, the overall commodity boom has led to higher co-product pricing (41% of corn cost), providing another hedge against the current elevated corn price environment. While only slightly increasing our gross margin assumption by 0.5% for 2008, we are significantly raising our EPS estimates (shown below), showing the power of operating leverage.”

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