Green Plains reports Q4 loss, discusses plant improvements

By Erin Voegele | February 21, 2022

Green Plains Inc. released fourth quarter financial results on Feb. 11, reporting a slight decrease in the volume of ethanol produced, but significantly improved crush margins when compared to the same quarter of 2020.

Todd Becker, president and CEO of Green Plains, discussed plant operations and progress being made to realize the company’s transformation plan during a fourth quarter earnings call.

The company achieved a 20 cent per gallon consolidated crush margin for the fourth quarter and a 17 cent per gallon consolidated crush margin for the full year 2021, Becker said. “Overall, in 2021, these results are in line with what was available in the daily average crush as we had significantly overachieved in the first half of the year,” he added. “If we would have not hedged anything all year, our year would have not been substantially different, although the fourth quarter would have been higher, making up for extreme weakness in the first half that we avoided by hedging and risk management.”

According to Becker, operations at the company’s Madison and Mount Vernon plants were impacted by supply chain constraints tied to national chip shortages and labor tightness. Those factors delayed completion of upgrade projects at the two locations and limited the production of opportunistic gallons, he said. “Just this week, we started one side of the new Mount Vernon dryers and expect the full system to be operational late this quarter,” Becker added.

The York location experienced grain bin damage during the fourth quarter, which limited overall utilization at that location, according to Becker. “While we are thankful that no one was hurt as a result of this accident, the combined challenges to the quarter in utilization from these three locations resulted in lost opportunity given the expansion of the crush in the spot market,” he said.

George Simpkins, chief financial officer at Green Plains, said the company’s plants ran at 83 percent capacity during the fourth quarter, up from 76 percent during the same period of 2020.

Becker said the company is seeing strong demand for high protein ingredients and is scheduled to begin a 60 percent protein trial at the Wood River facility soon. “We have a long-term goal of moving beyond protein levels in the 50s and fully operating in the 60s and above, and we'll know more shortly on that opportunity,” he added.

Green Plains is on track to start up MSC systems at the Obion, Mount Vernon and Central City plants in mid-2022, according to Becker. The company also expects to break ground on an MSC system at Tharaldson Ethanol in North Dakota as soon as the ground is thawed.

Becker also discussed the impact of expected strong demand for corn oil. He said the company is seeing robust demand and pricing for the product related to demand for renewable diesel feedstock. In addition, he discussed the company’s clean sugar and carbon capture projects and said Green Plains is closely monitoring the various competing technologies for alcohol-to-jet opportunities.

Green Plains reported a let loss of $9.6 million for the fourth quarter, or a loss of 18 cents per diluted share, compared to a net loss of $49.6 million, or a loss of $1.43 per share, reported for the same period of 2020. Revenues were $808.3 million, compared to $478.8 million.