The Andersons reports record income for its ethanol group

The Andersons Inc. has released financial results for the fourth quarter and full year results for 2013, reporting record operating income of $50.6 million for the company’s ethanol group. In 2012, the group reported a $3.7 million loss.

Overall, The Andersons reported net income attributable to the company of $89.9 million in 2013, or $3.18 per diluted share, on $5.6 billion in revenues. In 2012, the company reported earnings of $79.5 million, or $2.82 per diluted share on revenues of $5.3 billion.

For the fourth quarter, The Andersons reported earnings of $30.7 million, or $1.08 per diluted share, on revenues of $1.6 billion. During the same period of 2012, the company reported net income of $15 million, or 53 cents per diluted share, on revenues of $1.7 billion.

The Andersons attributed the increase in operating income for its ethanol group to higher ethanol margins, which were impacted by solid ethanol export demand and lower corn costs. The company’s ethanol plants also benefited from improved production rates and increased coproduct sales of corn oil, E8 and distillers dried grains.

Total revenues for the ethanol group were $832 million, up from $743 million in 2012. The Andersons attributed the revenue increase to a full year of production at the Denison, Iowa, plant and increased average ethanol prices.

The ethanol group’s quarterly results set a new company record, reaching an operating income of $26.6 million on revenues of $197 million. During the same quarter of 2012, the segment reported a loss of $800,000 on revenues of $215 million.

During a call to discuss the company’s financial results, Harold Reed, chief operating officer of The Andersons, called the ethanol group’s full year results exceptional. “The higher income is the result of significantly increased earnings from our investments in the ethanol limited liability companies,” he said, noting that the LLCs were positively impacted by higher ethanol margins. Reed also noted that the company’s ethanol team has worked diligently to optimize margins, yield, production rate and coproduct sales.

Mike Anderson, chairman and CEO of The Andersons, added that moving into 2014, the company’s ethanol group is still experiencing good margins. “They are not at the level seen in late 2013, but they are well above the margin seen in the first half of 2013,” he said, noting that the volatility of the ethanol market makes future margins difficult to predict.

The grain group reported 2013 operating income of $46.8 million, down from $63.6 million in 2012. Total revenues for 2013 were $3.6 million, up from $3.3 million in 2012. High revenue is attributed to greater sales volumes. The grain group’s fourth quarter operating income was $22.2 million on revenues of $1.1 million. During the fourth quarter of 2012, the company reported operating income of $18.1 million on revenues of $1.2 billion.

The rail group reported operating income of $42.8 million in both 2013 and 2012. The plant nutrient group reported an operating income of $27.3 million on revenues of $709 million and the turf and specialty group’s full year operating income was a record $4.7 million on revenues of $141 million. The retail group reported an operating loss of $7.5 million in 2013, which included $47 million in one-time costs.