Those poor deluded souls, excited by Bill Gates's investing in Pacific Ethanol (NASDAQ GM: PEIX), "Meeting the demand for clean burning fuels", will feel let down after the Sacramento refiner revealed the third-quarters loss just got worse, although the adjustment won't affect the company's cash outlays.
The corn based ethanol producer has announced it's increasing its non-cash "impairment charge" resulting from its decision last fall to suspend construction on the new plant in the Imperial Valley.
The charge was increased to US$40.9 million. Last week, in announcing its earnings, the company had pegged the charge at $26.6 million.
That brings the company's total loss for the quarter came to $69.2 million, or $1.23 a share. With profit margins eroded by lower ethanol prices and higher costs for corn, investors saw the shares down 3 cents to 70 cents.
Despite this setback the company are still upbeat and claim that they have achieved their goal of
220 million gallons per year of ethanol production capacity in 2008 - which they intend to grow to 420 million gallons total capacity per year in 2010.
In addition, they are working to identify and develop other renewable fuel technologies, such as cellulose-based ethanol production and bio-diesel.
Bill's Cascade Investments which had 21% of the company however saw the light almost exactly a year ago on November 18th 2007 and bailed out. They converted its preferred stock to 10.5 million common shares and selling. He lost US$24 million on the investment. He paid US$84 million for his stake in 2005.
US average ethanol producer price last week was US$ 1.8768 per gallon (ethanolmarket.com) , the pump price for gasoline (EIA) this week is US$2.08 .
Corn used for ethanol production for 2007/8 is said to have increased to 3.3 billion bushels, up from expected use of 2.125 billion bushels in 2006/07.