"Although we are not happy with the financial results we presented for the first half of 2010, we feel comfortable with the direction in which we're headed," said Alon USA Energy Inc. (NYSE:ALJ) president Paul Eisman following the publication of the company's financial report for the second quarter, in which Alon USA posted a net loss of $29.3 million.
Eisman added, "We have plans for improving the financial performance of our refineries, and we believe that they will ultimately show positive cash flow from current operations, despite the hard economic times."
Following continuous losses in recent quarters, Alon USA's cash flow has fallen to $7.7 million, and its total debt is $932 million. In order to strengthen the balance sheet, the company announced, together with the its financial report, that it intends to hold a rights offering to raise a net $40 million.
Alon Israel Oil Company Ltd., controlled by David Wiessman, Shraga Biran, and the Kibbutz Purchasing Organizations, own 76% of Alon USA. Alon Israel indicated to Alon USA that it intends to participate in the rights offering, and invest $30 million in the company.
Alon USA's second quarter loss was almost double the net loss of $52.9 million posted in the corresponding quarter of 2009, but less than the net loss of $52.9 million posted in the preceding quarter. Altogether, the company's net loss was over $80 million in the first half.
Alon USA owns oil refineries in Texas, Louisiana, and California. It acquired a refinery in Bakersfield, California, for $30 million earlier this year from financially troubled Flying J Inc.
Alon USA's share price fell 3.9% in New York on Friday to $6.46, giving a market cap of $350 million.
Published by Globes [online], Israel business news - www.globes-online.com - on August 8, 2010
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