BEI reports increased revenues from US ethanol

SINCE finalising the acquisition of the Denco ethanol plant in Minnesota in January this year, Babcock & Brown Environmental Investments said today that the increasing sale price of ethanol in the United States could increase its expected earnings for the full year by around 35%.

Ethanol produced at the Denco plant is pooled with that of other producers into a collectively owned marketing company, the Renewable Products Marketing Group.

BEI said today that the projected $A24.25 million in earnings before interest, taxes, depreciation and amortisation, described in its capital raising efforts for the Denco purchase, represented a pro-forma Base Case.

However, the sales price achieved by RPMG throughout May was higher than assumed in BEI’s Base Case, and the company announced today it expected its EBITDA for the six months to June 2006 would be around $A16.5 million.

On an annualised basis, the company reported the sales price achieved by RPMG – based on the Australian dollar remaining at around US75c – represents an increase of around 35% over initial projections.