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green and sustainable business

Biofuels activity gives Verenium hope

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vereniumVerenium Corp., which develops next-generation cellulosic ethanol and high performance specialty enzymes, reported a “strong start” for the year, with a dramatic improvement in the net bottom line.

While the Cambridge, MA company posted a net first quarter loss of $286,000 that was a huge improvement compared to its first quarter 2008 loss of $23.1 million.

The story was not quite the same regarding its operating losses – revenue minus operating expenses – because they continue to mount. Its operating loss increased 7 percent over the last year’s first quarter to $18.4 million.

Verenium says it has made significant progress so far this year, especially in the biofuels segment of its business. Earlier this year it entered into a 50-50 joint venture with BP to develop, own and operate cellulosic ethanol facilities using non-food feedstocks with a total commitment of $45 million in funding and assets from the two partners.

It also identified Highlands County, FL as the location for a first commercial-scale cellulosic ethanol facility. This facility will be developed as part of the joint venture with BP and is expected to provide the region with approximately 140 full-time jobs once commercial operations begin. The project was awarded a $7.0 million grant as part of Florida’s “Farm to Fuel” initiative. The joint venture also submitted a loan guarantee application to the Department of Energy during the quarter.

Also in the first quarter, Verenium began the “optimization phase” of its 1.4 million gallon/year demonstration-scale plant in Jennings, LA.  In a corporate move, it consolidated its R&D organization to include the Jennings pilot plant and demonstration-scale biofuels facilities under Greg Powers, EVP of Research and Development.

Verenium has also appointed James E. Levine, an energy banking and finance executive from Goldman Sachs, as EVP/CFO to support efforts to rebuild its capital structure and secure financing for commercial projects.

During the quarter it implemented “aggressive expense management initiatives” to decrease operating expenses. Operating expenses in the first quarter increased slightly, however, by $321,000, to $32.7 million.

On the balance sheet, Verenium reported that its cash position – including cash, cash equivalents and short-term investments – had more than doubled since Dec. 31 to $15.8 million.

Carlos A. Riva, president and CEO, commented in the company’s financial release: “As we look toward commercial operations, we continue to be very encouraged by the political climate and support for alternative energy and, specifically, biofuels.”

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Written by William DiBenedetto

12 May, 2009 at 10:17 am

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