By Maria Church
May 16, 2017 - Rentech, Inc., is reporting a gross loss from continuing operations for the first quarter of 2017 of $0.7 million. A year ago the company reported a gross profit of $0.1 million. Operating loss from those continuing operations for the first quarter of 2017 was $31.0 million, as compared to $10 million in the prior year period.
Consolidated revenues from continuing operations for the first quarter of 2017 were $32.2 million, as compared to $39.9 million in the prior year period.
During the first quarter of 2017, Rentech recorded impairment charges of $20.9 million relating to Fulghum Fibres. Revenues from Fulghum Fibres were down in the first quarter, $19.9 million as compared to $27.4 million for the same period last year.
“Prior to our decision to idle the Wawa facility in February 2017, we agreed to deliver approximately 336,000 metric tons of pellets to Drax in 2017. In January 2017, we shipped approximately 48,000 metric tons to Drax. In March 2017, Drax agreed to cancel the next two shipments for 2017 without any penalties, leaving us with an obligation to deliver approximately 193,000 metric tons for this year. In April 2017, we shipped most of Wawa’s remaining inventory of approximately 12,000 metric tons of pellets to Drax pursuant to an amendment to the Drax contract; this shipment does not affect our delivery obligations for 2017. Further amendments to the delivery schedule under the Drax contract will most likely occur as a result of the continued idling of the facility. At this time, we cannot make a determination if any penalties will be associated with future changes to the contract. Rentech, Inc. has guaranteed the payment obligations of the Drax contract up to a maximum amount of CAD$20 million,” the company reported in its quartly results.