Vertex Energy, a Houston-based fuel maker, experienced a decline in its stock prices as its fuels sold for lower prices in the second quarter. The company’s capture rate, which measures the percentage of fuel it is able to obtain from certain materials, fell below the forecasted range, causing concern among investors.
Decrease in Capture Rate
Previously, Vertex Energy had anticipated a capture rate of 50% to 54%. However, the company reported that the actual capture rate for the second quarter was only 30% to 35%. This significant drop was primarily attributed to price fluctuations in fuel markets.
Impact on Benchmark Fuel Spreads
One of the key benchmark fuel spreads for Vertex Energy experienced a decline of approximately 25% in average price compared to the first quarter. Additionally, the company faced price erosion on fuels that were not included in this benchmark. These challenges further impacted Vertex Energy’s financial performance in the second quarter.
Increase in Expenses and Repairs
Vertex Energy also noted a slight increase in expenses during the quarter. This was partly due to necessary repairs to its renewable diesel pumping systems. Despite these repairs, the company successfully achieved its target for renewable diesel production. Moreover, Vertex Energy’s throughput volumes are expected to surpass earlier projections.
Despite these positive developments, the decline in capture rate and the decrease in benchmark fuel spreads had a negative impact on Vertex Energy’s stock prices. As of now, shares have dropped by 19% and year-to-date losses stand at 15%.
