Gevo Inc. (NASDAQ:GEVO), citing a strong balance sheet and available cash, said Tuesday it expects to pay off its $12.7 million secured debt balance in full by the end of the year.
The company made the upbeat announcement after reporting its second-quarter 2020 financial results, showing it had a pot of $80.6 million in cash and cash equivalents, compared to just $6.3 million in the previous year. quarter of the previous year.
Additionally, Gevo noted that late last month it began production of approximately 50,000 gallons of renewable isobutanol at its production facility in Luverne, Minnesota. Once the renewable isobutanol is produced, Gevo will ship the isobutanol to the South Hampton plant for use in the production of renewable hydrocarbons in the first quarter of 2021.
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Gevo said it plans to produce an additional 50,000 gallons of renewable isobutanol in the second quarter of 2021 for use at the South Hampton plant. It plans to periodically produce renewable isobutanol in this way until a new, larger hydrocarbon production facility is funded and built.
The company also highlighted another operational breakthrough – a 10-year renewal agreement to supply renewable hydrocarbons to Trafigura Trading LLC. With this agreement, Gevo said it now has approximately 48 MGPY (million gallons per year) of offtake agreements in place, collectively representing approximately $1.5 billion in revenue over the life of the contracts.
For its third quarter, which ended September 30, Gevo said revenue was impacted by its decision in March to end its production of ethanol and distiller grains at the Luverne plant due to restrictions related to COVID-19 and an unfavorable environment for raw materials.
Revenue totaled $200,000 for the quarter, compared to $6.1 million in the same quarter of 2019. Hydrocarbon revenue decreased year over year to $100,000 for the quarter, compared to $600,000.
“With customers stuck and enough money in the bank to complete the engineering and project development work needed to close projects next year, and because we have several interested project capital investors engaged in a due diligence reasonably detailed, I believe our project financing activity with Citigroup is going well so far,” CEO Patrick Gruber said in a statement.
“We continue to work on securing other customer agreements and expect to announce one or more in the coming months. Overall, we are making good progress. We need to keep moving forward and stay on track.” .
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