GPRE reports successful 2010, continues to diversify

By Holly Jessen | March 04, 2011

In 2010, Green Plains Renewable Energy Inc. acquired grain elevators and ethanol plants while also moving forward with its corn oil extraction and algae projects—all while maintaining a healthy bottom line.

The company’s net income for the year was $48 million, up from $19 million in 2009. Revenues totaled $2.1 billion for the year, up from $1.3 billion in 2009. "We generated substantial growth in profitability in 2010 compared with 2009, with an increase in income before tax of more than 200 percent,” said Todd Becker, president and CEO. “We are focused on continuing to profitably grow each of our businesses in the future.”

Net income was down to $16.4 million in the fourth quarter of 2010, when compared to net income of $23.1 million in the same time period last year. On the other hand, revenues nearly doubled, going from $436.7 million in the fourth quarter of 2009 to $756.8 million in the fourth quarter of 2010. "We completed 2010 with a strong fourth quarter,” he said. “Systematic improvements to our production processes combined with immediate benefits realized from the execution of our growth strategy produced excellent financial results.”

The company cited diversifying their business as a critically important strategy for the future. That strategy certainly came into play over the last year, beginning in April with the acquisition of five grain elevators in western Tennessee with grain storage capacity of 11.7 million bushels. It also finished building grain storage facilities to increase its capacity by another 1.1 million bushels. GPRE’s agribusiness segment now has a total capacity of 31.4 million bushels.

GPRE plans to continue to aggressively grow its agribusiness operations by buying or building more grain handling facilities, particularly in Tennessee, Iowa and other locations close to its ethanol plants. "We have found this formula to be effective in maximizing profitability for both segments," Becker said.

Adding ethanol capacity is also a big part of the plan. In 2010 the company acquired plants in Riga, Mich., and Lakota, Iowa, which now have combined capacities of 160 MMgy. The first plant acquisition of 2011, a 55 MMgy plant in Fergus Falls, Minn., will wrap up in March. The company will own nine ethanol plants with a combined capacity of 735 MMgy. Buying plants isn’t the only way the company has increased its capacity. GPRE provided information about capacity increases to EPM twice in the last year, adding a total of more than 45 MMgy in ethanol production at its plants. 

Another way GPRE has diversified its cash flows is through corn oil extraction. The technology has been installed at three plants and will be installed at all GPRE plants by second quarter 2011. In the fourth quarter of 2010 the company sold about 5 million pounds of corn oil. “Once fully implemented, this project has the potential to produce more than 100 million pounds of corn oil and generate incremental operating income in excess of $30 million annually, based on current market prices," Becker said.

Operating income in the marketing and distribution segment was up thanks to the fact that GPRE is producing more ethanol and has added corn oil extraction. The marketing and distribution segment had operating income of $4.2 million in the fourth quarter of 2010 compared to $1.5 million in the same time period of 2009. The company sold 84.5 million gallons more ethanol in the fourth quarter of 2010 compared to the fourth quarter of 2009. "We expect to generate at least $50 million of total operating income annually from corn oil production, our agribusiness operations, and marketing, blending and distribution activities," he said.

GPRE’s algae project is located at its Shenandoah, Iowa, plant. The company announced in February that it had completed construction of its commercial scale GrowerHarvester, a trademarked product.