The Andersons(US:ANDE)2023-05-03 16:00Financial Performance - The Company reported total sales and merchandising revenues of $3,881,238 thousand for Q1 2023, a decrease from $3,977,954 thousand in Q1 2022 [99][100]. - Operating results for the Renewables segment decreased by $43.7 million, despite a $156.3 million increase in sales and merchandising revenues [103]. - Nutrient & Industrial segment operating results decreased by $21.2 million, with sales and merchandising revenues down $46.1 million and fertilizer prices decreasing by almost 60% [105]. - The Trade segment's operating results improved by $35.7 million compared to the prior year, with a gross profit increase of $49.6 million attributed to strong asset and merchandising performance [101]. Inventory and Production - Agricultural inventories on hand were 99.6 million bushels as of March 31, 2023, down from 188.9 million bushels a year earlier, indicating a significant reduction in available stock [91]. - Ethanol volumes shipped decreased to 186,566 thousand gallons in Q1 2023 from 197,318 thousand gallons in Q1 2022, reflecting a decline in production [94]. - The Nutrient & Industrial segment's operating results decreased from record levels in the prior year, with a total of 315 thousand tons sold in Q1 2023 compared to 210,042 thousand tons in Q1 2022 [97][95]. Expenses and Liabilities - Operating, administrative and general expenses increased by $12.4 million year-over-year, primarily due to $6.2 million in higher labor, benefits, and incentives [102]. - Interest expense rose by $3.6 million due to increasing interest rates on the Company's short-term line of credit compared to the prior year [102]. - Current liabilities from continuing operations decreased by $940.3 million, mainly due to reduced utilization of the Company's short-term revolving credit line [114]. Future Outlook and Investments - The Company anticipates improved second quarter volumes in the Nutrient & Industrial segment due to strong farmer income and high planted acres, despite some margin decline not likely to be recovered [95]. - The Company expects to invest approximately $125 million in property, plant, and equipment in 2023, with spending split evenly between growth projects and maintaining current facilities [117]. - The Company believes that current market conditions in agriculture are strong, with a positive long-term outlook despite recent market fluctuations [89]. Cash Flow and Dividends - Working capital from continuing operations increased by $70.3 million to $938.2 million as of March 31, 2023 [112]. - The Company paid $6.3 million in dividends in Q1 2023, compared to $6.1 million in the prior period [119]. - As of March 31, 2023, the Company had $1,294.9 million available for borrowing, with $220.8 million being non-recourse [118]. Impairments and Charges - The Renewables segment experienced a decrease in operating results due to an impairment charge on the ELEMENT joint venture, which was placed into receivership [93]. - An asset impairment charge of $87.2 million was recorded for the ELEMENT ethanol plant, with approximately $44.4 million attributable to noncontrolling interest [104]. - The asset-based business contributed approximately $24 million to gross profit, aided by $17 million in insurance proceeds from a fire incident at a Michigan grain asset [101]. Storage Capacity - Total Trade storage space capacity was approximately 180 million bushels as of March 31, 2023, comparable to the prior year, indicating stable storage capabilities [91].