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Energy crop company Ceres, Inc. (Nasdaq:CERE) today announced financial results for the quarter ended May 31, 2013 and provided an update on its business in Brazil, its largest immediate commercial opportunity.
The company reported that its mill customers in Brazil have made continued progress in crop performance this season, which concluded in May. For mills that reported results, yields of sugars that can be fermented into ethanol were approximately 50% higher on average across mill locations than the previous season primarily as a result of product improvements related to biomass quality and productivity, better crop management and favorable growing conditions at most planting locations. Yields from location to location, however, showed greater variability than expected. Ceres sweet sorghum hybrids were developed to complement existing sugarcane feedstock supplies and extend the ethanol production season in Brazil.
“We have clearly demonstrated that economically compelling yields can be achieved with our products,” said Richard Hamilton, President and Chief Executive Officer of Ceres. “While further optimizations and additional hybrids are needed to consistently achieve high yields across wide-area plantings, we believe that we are well positioned to take a leading role in the ongoing development of the sweet sorghum market in Brazil.”
Due in part to the variability of this season’s yields, the company anticipates that many of its mill customers will repeat smaller scale commercial plantings before committing to broad, large-scale adoption. “As a result, we expect total sweet sorghum seed sales next season to grow more modestly than originally anticipated,” said Hamilton.
Ceres Chief Financial Officer Paul Kuc noted that the company continues to prioritize investments in its sorghum pipeline and its opportunity in Brazil, while closely monitoring its working capital levels. “As we move forward, we intend to maintain the strength of our balance sheet with these priorities in mind,” he said.