• EBITDA: $83.3 million, including a $30.7 million gain from the sale of the Birmingham unit train terminal.
• Revenue: $658.7 million, down 26% from the same period last year.
• Net Income: $48.2 million, or $0.69 per diluted share.
• Consolidated Crush Margin: $58.3 million, compared to $52.9 million in the prior year.
• Plant Utilization Rate: 97%, compared to 94% in the same period last year.
• SG&A Costs: $26.7 million, $8.6 million lower than the prior year.
• Interest Expense: $10.1 million, $0.5 million higher than the prior year's third quarter.
• Liquidity: $252 million in cash, cash equivalents, and restricted cash, with $228.5 million available under the working capital revolver.
• Capital Expenditures: $28 million for the quarter, with a year-to-date total of $67.8 million.

• Warning! GuruFocus has detected 4 Warning Signs with GPRE.

Release Date: October 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Green Plains Inc (NASDAQ:GPRE) reported a strong EBITDA of $83.3 million for the third quarter, including a $30.7 million gain from the sale of the Birmingham unit train terminal.
• The company achieved a record quarter for ultra-high protein production and maintained strong corn oil yields.
• Ethanol operating rates reached nearly 97%, demonstrating improved operational performance.
• Green Plains Inc (NASDAQ:GPRE) is on track with its Advantage Nebraska strategy to decarbonize its operations, with significant progress in carbon sequestration projects.
• The company completed the sale of the Birmingham unit train terminal, using proceeds to retire high-priced debt, enhancing financial efficiency.

Negative Points

• Consolidated revenues for the third quarter were $658.7 million, down approximately 26% from the same period a year ago due to lower prices for ethanol, dry distillers grains, and renewable corn oil.
• There was a rapid compression in margins late in the quarter, influenced by weaker oil and gasoline prices.
• The ongoing start-up and commissioning of the CST project in Shenandoah faced delays, impacting immediate earnings contributions.
• Protein margins were lower than expected due to the availability of cheaper competing products.
• The company faces uncertainties regarding ethanol margins and prices, with potential impacts from external market conditions.

Q & A Highlights

Q: Todd, can you discuss what the market needs to see from Green Plains to better reflect the value of your initiatives, particularly Advantage Nebraska and other projects? A: Todd Becker, CEO: The milestones in carbon are critical, and breaking ground on the project soon will be significant. Once we start producing credits, the value of our company should adjust higher. The industry has seen value compressions, but our asset base is undervalued. Our CST technology is a game-changer, and while it's a long-term process, there's significant interest in our products.

Q: Can you elaborate on the long-term value of the CST business compared to the near-term challenges in protein? A: Todd Becker, CEO: The demand for low-carbon dextrose is strong, driven by CPG companies aiming to lower carbon scores. Our technology is disruptive, and we are receiving certifications to sell into consumer markets. The margins for dextrose are significantly higher than for alcohol, and we are seeing global interest in our technology.

Q: How has your outlook for ethanol margins and prices changed, and did the corn basis play out as expected? A: Todd Becker, CEO: We saw margin compression late in the quarter, but recent data shows that production is being absorbed, which should adjust the market. We were affected by weak oil and gasoline prices, but we expect margins to stabilize. The corn basis was better than the past three years, helping margins, and while it's firmer than expected post-harvest, we're not having trouble buying corn.

Q: Can you provide an update on the partnership with Shell and the progress at Tharaldson? A: Leslie Van Der Meulen, EVP Product Marketing and Innovation: The process at York has started, producing cellulosic ethanol. The next step is aligning protein production. At Tharaldson, we're pushing towards full production capacity, with excellent protein quality opening new markets, especially on the West Coast.

Q: What are the key milestones for carbon capture to achieve the second half '25 $70 credit target? A: Todd Becker, CEO: Equipment orders are on track, and we expect to break ground soon. We have permits to operate, and Nebraska is supportive. The pipeline and sequestration wells are progressing, and we expect full rules for 45Z by Q3 next year. The equipment is in manufacture, and we aim to start compressing carbon by Q3 2025.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.