Murphy USA reports production, yield increase for Hereford plant

By Erin Voegele | May 06, 2015

Murphy USA has released financial results for the first quarter, reporting that while the company’s Texas ethanol plant generated an operating loss during the first three months of the year, the plant set records in terms of production and yield.

According to Murphy USA, its Hereford, Texas, ethanol plant generated an operating loss of $600,000 for the first quarter, compared to a net gain of $1.2 million during the same period of the prior year. Plant production, however, increased 30 percent to 22.3 million gallons and yield increased 6.8 percent to 2.82 gallons per bushel.

“The lower results at Hereford in the current quarter were the result of lower crush spreads caused by lower ethanol prices, partially offset by significantly higher yields,” said Mindy West, chief financial officer of Murphy USA, during an investor call.

Andrew Clyde, CEO of Murphy USA, also spoke briefly about the Hereford plant during the call. “A real bright spot this quarter was our Hereford ethanol plant,” he said. “While it lost half a million dollars due to weak market crush spreads, it set records for production and yield.”

Clyde noted that the company completed corn oil and starch extraction investments at the plant on time and on budget, and said early tests are in line with, or better than, expectations.

According to Clyde, the company just completed the one-year anniversary of a staff retention and motivation program. “Plant staff experienced zero voluntary attrition in the last 12 months,” he added. “That team has shown us what the operating potential of the plant really is, and with crush spreads greatly improved since quarter-end, and new revenue and improvement streams online, we can start to consider the timing for realizing the full value for this non-core, but well-performing, asset.

Regarding renewable identification numbers (RINs), Murphy USA said income generated from the sale of RINs increased to $37.6 million during the quarter, up from $17.6 million during the same period of 2014. The company indicated it sold 54 million RINs during the quarter at an average price of 70 cents each.

Overall, Murphy USA reported net income $22.9 million, up from $9.6 million during the first quarter of last year. Earnings per share, assuming dilution, were 50 cents, compared to 21 cents during the same quarter of the previous year. Average retail fuel prices for the quarter were $2.10 per gallon, down from $3.23 per gallon during the first quarter of 2014.