REX American Resources reports increasing profitability

By Erin Voegele | April 02, 2013

REX American Resources Corp. has released financial results for its fiscal 2012 fourth quarter and the year ended Jan. 31, 2013. The company currently holds ownership interest in seven ethanol plants throughout the Midwest.

During the final quarter of fiscal year 2012, REX reported that net sales and revenues increased by 2.4 percent to $174.6 million, when compared to the $170.5 million reported for the same period of 2011. Net loss attributed to shareholders during the fourth quarter of 2012 was $4.4 million, which equates to a loss of 54 cents per diluted share. During the fourth quarter of 2011 the company posted a net income of $14.5 million, or $1.72 per diluted share. The reduction is attributed to compressed ethanol margins and lower income from discontinued operations.

REX reported a consolidated gross loss of $2.6 million during the fourth quarter. A gross profit of $20.5 million was reported for the same period of 2011. For the full 12 months of fiscal 2012, revenue increased 60.4 percent to $647.7 million. Gross profit decline for the year, from $34 million in fiscal 2011 to $13.5 in fiscal 2012. A net loss for 2012 of $2.3 million was reported for the year, compared to a net income of $28.3 million in 2011.

While Stuart Rose, REX CEO, noted that fiscal 2012 proved challenging for the entire ethanol sector, particularly during the fourth quarter, spread margins are improving. “Ethanol crush spread margins have strengthened since the beginning of calendar 2013 and REX is well positioned to take advantage of the improving industry environment,” he continued. “Our portfolio of state-of-the-art ethanol plants, and ability to efficiently produce dried distillers grains and corn oil, combined with the Company’s strict operating disciplines, suggests that REX will return to profitability as industry conditions normalize.”

In a call to discuss the financial results, Rose also noted that losses in the fourth quarter were partially offset by higher prices for distillers grains coproduct and a strong market for corn oil. In addition, Rose stressed that industry conditions have changed drastically since the close of 2012. Demand has significantly increased, he said, while supply has tightened. “Crush margins are going up significantly as we speak,” he continued.

“Overall, we're optimistic,” Rose said. “We've shown our strength by being able to remain at full production. We've shown that our plants are among the best in the industry. During these difficult times, we have not just survived. We paid down our debt. We showed that we can operate even during the worst of times at full capacity.”