Renewable Energy Group, Inc. (REGI) swung to a net profit for the quarter ended Sep. 30, 2016. The company has made a net profit of $22.93 million, or $ 0.59 a share in the quarter, against a net loss of $15.68 million, or $0.36 a share in the last year period.
Revenue during the quarter surged 58.19 percent to $624.64 million from $394.86 million in the previous year period. Gross margin for the quarter expanded 646 basis points over the previous year period to 7.58 percent. Operating margin for the quarter period stood at positive 4.04 percent as compared to a negative 4.45 percent for the previous year period.
Operating income for the quarter was $25.21 million, compared with an operating loss of $17.59 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $31.62 million compared with $16.90 million in the prior year period. At the same time, adjusted EBITDA margin improved 78 basis points in the quarter to 5.06 percent from 4.28 percent in the last year period.
"We achieved solid growth in the third quarter with significant increases in gallons sold, gallons produced, revenue and adjusted EBITDA," said REG president and chief executive officer Daniel J. Oh. "REG Life Sciences delivered its first commercial product last week, our biomass-based diesel fleet is operating efficiently and profitably and REG Geismar is up and running well with no planned downtime for the remainder of the year. We believe we are positioned for a strong finish to the year."
Working capital increases sharply
Renewable Energy Group, Inc. has recorded an increase in the working capital over the last year. It stood at $202.50 million as at Sep. 30, 2016, up 68.13 percent or $82.06 million from $120.44 million on Sep. 30, 2015. Current ratio was at 2.52 as on Sep. 30, 2016, up from 1.89 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 8 days for the quarter from 17 days for the last year period. Days sales outstanding were almost stable at 12 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 8 days for the quarter compared with 21 days for the previous year period. At the same time, days payable outstanding went down to 12 days for the quarter from 17 for the same period last year.
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