In separate reports, Australian Biodiesel Group announced a loss after tax of nearly $14 million and Australian Renewable Fuels of just over $5 million.
Australian Biodiesel Group
ABG described its $18.3 million revenue result, or sale of 17.5 million litres of biodiesel, as “well below expectations”.
The company announced in December that it was mothballing its Berkeley Vale plant in New South Wales as it finalised commissioning of the larger and more efficient 160 million litre per annum Narangba plant, also located in the state.
As of last week, ABG said the Narangba plant had produced 5 million litres of biodiesel.
ABG attributed its “poor financial performance” to a variety of factors, namely production problems; drought-induced rising feedstock prices; lower world oil prices; new fuel excise laws; and the negligible uptake of biodiesel by oil majors.
In a bid to improve its financial position, ABG says it has extensively reviewed regulatory and market changes, subsequently changing its business strategy.
Among other things, the company says it plans to increase the blend ratio to 20%, use cheaper feedstock such as tallow and used cooking oil, and look to secure longer term contracts.
Despite the net loss, ABG said it was confident the company would be able to pay its outstanding debts, partly via a capital raising currently being negotiated.
Australian Renewable Fuels
With production problems of its own during 2006, ARF is planning a move into the more lucrative North American market.
“The board has observed that support for the biofuels sector in the US is both bipartisan and strong,” ARF managing director Darryl Butcher said, pointing to the various government incentives.
“The next half-year will see a sustained focus by the company on reducing costs and increasing sales in Australia as well as the completion of pre-development work for our first project in the US.”
Having undergone a recent corporate restructure, ARF has biodiesel production from its two plants in Largs Bay, South Australia, and at Picton, Western Australia.
Revenue for 2006 was $4 million, compared with $78,000 in the prior year, while the net loss jumped from $926,000 to $5.1 million.
