VeraSun has released its third quarter financial statement and the news is not good. While the ethanol company's revenues ending Sept. 30, 2008 had increased 389% from 2007 to $1.084 billion, unlike 2007 when the company had net income of $7.8 million this year saw a net loss of $476.1 million.
On Oct. 31, 2008 VeraSun filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court of the District of Delaware.
"We are working diligently to secure financing in order to maintain operations during these unprecedented, difficult market conditions," said VeraSun CEO Don Endres. "Ethanol margins continue to suffer while our industry continues to increase capacity at the same time as demand for transportation fuel is being reduced."
Endres says in order for the U.S. to realize the vision of reducing reliance on foreign oil it needs to raise the allowed ethanol blend in the existing car fleet and support the move to more Flexible Fuel Vehicles.
During the quarter, VeraSun reported a $118.6 million loss on derivatives and a mark-to-market loss of $40.1 million. The mark-to-market loss consists of an inventory valuation adjustment of $12.9 million and a loss on open forward corn purchase contracts of $27.2 million. The loss was partially offset by a $7.5 million gain related to the sale of corn inventory for the quarter.
Earlier this month, VeraSun announced it had "terminated" chief financial officer Danny Herron. No reason was given, and Bryan Meier, VeraSun's vice president, finance and chief accounting officer, has assumed Herron's duties.
Additional information about VeraSun's bankruptcy and third quarter financial condition are available at their Web site, www.verasun.com.