The Andersons report quarterly record for ethanol operations

By Erin Voegele | August 08, 2014

The Andersons Inc. has released financial results for the second quarter, reporting record operating income of $33.9 million for its Ethanol Group. According to the company, the Ethanol Group realized excellent margins at all plants, with margins supported by ongoing increases in export demand, lower corn prices and excellent operating metrics. The Ethanol Group also had record E85 sales and increased distillers dried grains (DDG) and corn oil sales.

Overall, The Andersons reported net income of $44.3 million, up from $28.5 million the previous year. Revenues were $1.3 billion for the quarter, compared to $1.6 billion for the same period of 2013. Gross profit was $121.5 million, up from $103.2 million last year. The quarterly gross profit margin was 9.3 percent, up from 6.6 percent during the second quarter of last year.

During a call to discuss the quarterly results, Mike Anderson, chairman and CEO of The Andersons, noted the Ethanol Group’s earnings in the first six months of this year actually exceed any prior year full-year results. Ethanol margins were strong, he said, and the company seized that opportunity by producing a record amount of ethanol during the second quarter.

Harold Reed, chief operating officer of The Andersons, added that revenue for the Ethanol Group reached $226 million during the quarter, up from $222 million last year. While the gallons of ethanol sold increased 8 percent, revenue only increased about 2 percent, as the average price per gallon of ethanol sold declined. During the first half of the year, Reed noted the Ethanol Group has reported operating income of $53.7 million on revenues of $415 million. During the same period of last year, the Ethanol Group reported operating income of $13.1 million on revenues of $422 million.

According to Reed, the Ethanol Group has continuously made improvements to its ethanol production facilities. Capital investments that have been made to increase plant efficiency have been beneficial for both the production of ethanol and coproducts, he added.