Aventine’s Profit Nears $55 Million

By Steve Tarter, Journal Star, Peoria, Ill.

Feb. 23–PEKIN — Aventine Renewable Energy Holdings Inc., a Pekin-based ethanol producer, capped a strong performance in 2006 by more than doubling earnings in the fourth quarter over the previous year.

The company had a fourth quarter profit of $12.8 million, or 30 cents a share, compared with a profit of $5.3 million, or 12 cents a share, in the fourth quarter of 2005.

For the year, Aventine’s profit was $54.9 million, or $1.39 a share, compared with a profit of $32.2 million, or 89 cents a share, in 2005.

In its earnings report released Friday, Aventine reflected the boom period for the U.S. ethanol industry that saw record growth in 2006. According to the Washington-based Renewable Fuels Association, U.S. plants produced 4.9 billion gallons of ethanol last year with an additional 3 billion gallons forecast for this year.

Aventine boosted production at its Pekin facility with the opening of a second plant earlier this year. That increases annual production at the Pekin facility to 157 million gallons.

Aventine is also considering adding capacity at its main Pekin plant while going ahead with plans to expand operations in Aurora, Neb., and Mount Vernon, Ind., said Les Nelson, director of investor relations.

Aventine CEO Ron Miller said the company took advantage of increases in the spot price of ethanol late in the fourth quarter “to reduce inventory and ship record volumes.”

The average selling price of ethanol in 2006 was $2.18 a gallon, up from $1.63 in 2005.

While corn prices were up in the fourth quarter, averaging $2.90 a bushel, up from $2.31 a bushel in the third quarter, the prices were well below the Chicago Board of trade average daily closing price of $3.44 a bushel, said Miller.

Under the company’s stock repurchase program, Aventine repurchased 50,000 shares of its common stock during the fourth quarter at an average price of $23.04 a share.

In looking at 2007, Nelson said the company’s position was that corn was overpriced and might settle between $3 to $3.50 a bushel later in the year.

Citing “favorable political winds” in support of ethanol, Nelson said “even the big oil companies accept 10 percent ethanol now.”

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AVR,