Vertex Energy Sees Strong Sales Volumes in First-Quarter 2015, Builds Up Refining Facilities in Louisiana

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Researched by Industrial Info Resources (Sugar Land, Texas)--Vertex Energy (NASDAQ:VTNR) (Houston, Texas), an environmental services company that handles commercial chemical products and runs several U.S. refineries, reflected many other energy-related companies in the first quarter of 2015 as the persistent weakness in oil prices more than offset a strong growth in sales volumes. The company reported net losses of $16.97 million for the quarter, compared with net income of $862,165 in first-quarter 2014.

Vertex executives stressed that losses only totaled $5.92 million when excluding income taxes; interest expenses; depreciation; amortization; and provisions for doubtful accounts. Using this measurement for the same period last year shows a gain of $1.67 million.

As part of its expanding North American Petroleum Refining Project Database, Industrial Info is tracking a major project at Vertex's Myrtle Grove Refinery in Belle Chasse, Louisiana. The company is evaluating the renovation of a former ethanol production facility, including the $40 million addition of a hydrotreater unit. The unused ethanol facility will be repurposed to produce white oils or base oils from vacuum gas oil, which will be shipped from the company's nearby Marrero Re-Refinery; the new unit is expected to have a capacity of 500 barrels per day. The project is expected to kick off in the first quarter of 2016 and to be completed by the first quarter of 2017.

Total revenues stood at $37.68 million, a 20.41% decrease from the first quarter of 2014. The effects of weak oil prices shrouded the company's 32% gain in volumes of product sold. During the quarter, Vertex adopted a new service fee model for the collection of used motor oil and environmental services that executives expect will lower the cost of oil at the refineries. Also, subsidiary Vertex Refining NV LLC signed a new lease for a re-refinery plant in Churchill County, Nevada, that produces base lubricating oils.

Vertex's per barrel margin during the quarter was down 97%, a result of the weak commodity prices.

"The last nine months has been a difficult time in every segment of the oil business, and Vertex Energy has weathered the storm," said Benjamin Cowart, the president, chairman and chief executive officer of Vertex, in a conference call. "Our spreads are good and have definitely improved. We have altered our business to suit the low-price climate, and have taken steps to reduce operational cost."

Vertex executives are optimistic that the company can return to profitability this year. They expect Vertex's Thermal Chemical Extraction Process (TCEP) facility will increase production throughout the remainder of 2015, with a major cost reduction anticipated from the shifting of volumes to the facility in Marrero, Louisiana.

"Prices are dynamic in the market, oil prices are up," Cowart said. :We have seen some benefit in our purchase discounts, as well as a rattling index on our inventories as we go into the second quarter. So that's a positive thing."

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.