The Andersons reports a profitable quarter for ethanol business

By Erin Voegele | August 07, 2017

The Andersons Inc. recently released second quarter financial results, reporting its ethanol group earned $4.7 million of pretax income attributable to the company despite weaker year-over-year margins, down from $6.2 million during the same period of last year.

During an investor call, The Andersons CEO Pat Bowe said the ethanol business called the ethanol business “solidly profitable despite lower year-over-year margins, which were driven by higher industry production and stocks.”

Bowe also noted the company’s ethanol group is doing a good job of driving production efficiency, with all four of its ethanol plants running well. He also said that margins began to improve in late July, and cited declining ethanol stocks, moderating corn prices, record exports, strong gasoline demand and a favorable 2018 Renewable Fuel Standard proposal as good signs for ethanol moving forward.

The Andersons’ four ethanol plants produced a record 116 million gallons during the second quarter, with 214 million gallons produced during the first half of the year, up a respective 19 percent and 12 percent over the same periods of 2016.

The company also indicated the ethanol group continued to incur discounts on DDGS during the quarter due to problems with vomitoxin in the vicinities of the group’s three eastern facilities, though at a lower rate than in the first quarter. Lower international demand for DDGS also continued to pressure pricing and margins.

Overall, The Andersons reported a net loss of $26.7 million, or 94 cents per diluted share, and adjusted net income of $15.3 million, or 54 cents per diluted share, up 6 percent over the prior year.