The Andersons(US:ANDE)2025-11-05 16:11Agribusiness Performance - Agribusiness segment's sales and merchandising revenues increased by $112.9 million to $1,988.9 million, while cost of sales rose by $105.3 million to $1,862.0 million, resulting in a gross profit increase of $7.6 million [112]. - Operating results for the Agribusiness segment were negatively impacted by trade policy uncertainty and low prices, leading to reduced gross profit in grain assets and merchandising businesses [99]. - The Agribusiness segment's sales and merchandising revenues increased by $350.2 million, primarily due to the acquisition of Skyland, which contributed $478.6 million in revenues [122]. Financial Results - The company reported a net income before income taxes of $25.8 million for Q3 2025, compared to $62.2 million in Q3 2024 [110]. - For the nine months ended September 30, 2025, total sales and merchandising revenues increased to $8,472.7 million, up from $8,134.4 million in the same period of 2024, representing a growth of 4.2% [120]. - Gross profit for the nine months ended September 30, 2025, was $482.2 million, slightly up from $480.8 million in the prior year, reflecting a marginal increase of 0.3% [120]. Expenses and Costs - Operating, administrative, and general expenses increased by $35.5 million, largely due to $30.8 million in costs associated with the Skyland acquisition [113]. - Operating, administrative, and general expenses rose by $79.2 million, largely attributed to the acquired Skyland business [123]. Tax and Income - The effective tax rate for Q3 2025 was (0.9)% on income before taxes of $25.8 million, influenced by nontaxable clean fuel production credits [117]. - The company recorded an income tax expense of $5.7 million for the nine months ended September 30, 2025, with an effective tax rate of 10.5% on income before taxes of $53.9 million [129]. Cash Flow and Investments - Net cash provided by operating activities for the first nine months of 2025 was $183.2 million, a significant increase of $120.5 million compared to $62.7 million in the same period of 2024 [138]. - Cash used in financing activities totaled $538.0 million for the nine months ended September 30, 2025, compared to $162.6 million in the same period of 2024, driven by a $425.0 million cash outlay for the TAMH acquisition [140]. - The company anticipates total investments in property, plant, and equipment for 2025 to be approximately $200 million, reflecting a focus on growth initiatives [139]. Assets and Liquidity - Current assets decreased by $369.9 million year-over-year, primarily due to cash used for the acquisition of the remaining interest in TAMH [134]. - As of September 30, 2025, the company had working capital of $630.7 million, a decrease of $522.5 million from the prior year [134]. - As of September 30, 2025, the Company had standby letters of credit outstanding amounting to $2.8 million, suggesting adequate liquidity for operations and capital expenditures [145]. Market and Risk Management - There were no material changes in market risk, specifically commodity and interest rate risk, during the nine months ended September 30, 2025, indicating stable risk management [147]. - The Company is typically in a net short-term borrowing position in the first half of the year, with most short-term borrowings at variable interest rates, indicating potential profitability impact from rising interest rates [144]. Production and Sales Trends - The third quarter nutrient business experienced increased margins and higher year-over-year volumes, with expectations for higher margins in the fourth quarter, although demand may be impacted by low grain prices [101]. - Ethanol production volumes decreased to 182,469 thousand gallons in Q3 2025 from 212,336 thousand gallons in Q3 2024, while renewable feedstocks volumes fell to 348,252 thousand pounds from 415,505 thousand pounds [105]. - The company expects elevation margins and merchandising opportunities to increase in the fourth quarter due to a large harvest and low market prices [100]. Capacity and Growth - Total Agribusiness grain storage capacity increased to approximately 275 million bushels as of September 30, 2025, up from 170 million bushels in 2024, primarily due to the Skyland acquisition [102]. - The Renewables segment's operating results improved by $11.1 million, with year-to-date 2025 45Z tax credits recorded at $20.2 million, despite a decline in sales and merchandising revenues by $56.1 million [114][103].