Southwest Iowa Renewable Energy, LLC (” SIRE
Results for Fiscal 2015 and 2014 (Amounts in 000’s)
Book Value (Members’ Equity)
Book Value per basic unit
SIRE reported net income of $13.8 million or $1,032.57 per basic unit for Fiscal 2015, compared to a net income of $48.6 million or$3,681.03 per basic unit for Fiscal 2014.
Modified EBITDA was $29.2 million for Fiscal 2015, compared to $78.1 million for Fiscal 2014. This is defined as net income plus interest expense net of interest income, plus depreciation and amortization, or EBITDA, then adjusted for unrealized hedging losses, gain on involuntary conversion, and other non-cash credits and charges to net income.
Southwest Iowa Renewable Energy had $3.0 million in cash and cash equivalents and $29.1 million available under revolving loan agreements, for total cash and available borrowings of $32.1 million at September 30, 2015.
Brian Cahill, SIRE’s President and CEO stated, “During Fiscal 2015, margins dropped significantly compared to Fiscal 2014, which was a record year for the industry. Demand for ethanol continues to be strong with the lower prices, both in the U.S. and abroad.”
“We continue to explore additional sources of profit, including collaborating with partner firms providing new revenue streams for SIRE, as well as continuing to evaluate and implement new production technology. We will continue to focus on running the plant efficiently, with a balance of optimizing the yield and profit.”
During Fiscal 2014, SIRE recorded a $4.7 million non-cash charge and a $0.9 million fair value adjustment (also non-cash) in conjunction with the final payment of subordinated debt, and the related put option issued to ICM, Inc. SIRE also recorded a cash gain of $2.1 million related to the repair and replacement of the steamline bridge.
- SIRE retired ALL remaining convertible subordinated debt, totalling approximately $27.0 million
- In connection with these final payments, SIRE entered into an agreement with ICM, granting ICM the right to sell to the Company (“Put Option”) their 1,018 units
- SIRE entered into new service agreements with Bunge for five years, with one five year optional extension
- SIRE declared a dividend of $1,000 per unit, which was paid in January, 2015
- SIRE completed repairing the steamline and again has the ability to utilize either natural gas or steam
- SIRE completed construction of two additional grain bins, adding capacity of 1.0 million bushels
- SIRE commenced utilizing the Enogen corn in its ethanol production
- SIRE extended the term of the Steam Service Contract with MidAmerican Energy Company to 2024
“Our book value per share is now $7,602 per unit,” continued Cahill, “with $1,032.57 profit per basic unit for Fiscal 2015.”
During Fiscal 2015, Southwest Iowa Renewable Energy sold 119.9 million gallons of ethanol. Cahill commented, “Margins continue to be tight, as the low price of corn has been matched by the low price of oil and ethanol. The EPA volumes, finally released on November 30, while not what we wanted, and lower than the RFS law, are higher than earlier EPA proposals. We expect Fiscal 2016 to see continued tight margins, with a high focus on efficiency in the industry.”