Green Plains (GPRE) Q4 2025 Earnings Transcript

Core Insights - The company has achieved significant operational improvements, resulting in a Q4 adjusted EBITDA of $49.1 million, an increase of over $67 million compared to the previous year [1][11] - The company is benefiting from the 45Z clean fuel production tax credit, generating $27.7 million in Q4, which is contributing to the overall financial performance [1][11] - The company has increased production capacities across several facilities, with a new total capacity of 730 million gallons per year, reflecting a 10% increase [2][3] Financial Performance - For Q4 2025, the company reported a net income of $11.9 million, compared to a net loss of $54.9 million in Q4 2024 [10] - Revenue for Q4 was $428.8 million, down 26.6% year-over-year, primarily due to the sale of the Obion plant and idling of the Fairmont facility [12] - SG&A expenses totaled $22.9 million, a decrease of $2.8 million from the previous year, indicating effective cost management [12] Production and Capacity - The company has increased production capacities at several facilities, with Central City and Wood River now at 120 million gallons per year each, and other plants adjusted accordingly [2] - The start-up of CO2 compression equipment at Nebraska plants has made carbon capture fully operational, contributing to lower carbon intensity scores [2][3] Strategic Initiatives - The company is focusing on five strategic priorities, including improving energy efficiency, evaluating carbon sequestration opportunities, and expanding grain storage capabilities [21][22] - The introduction of new leadership in finance and legal functions aims to enhance governance and strategic transactions [8] Market Outlook - The company anticipates that carbon-related opportunities could generate at least $188 million of adjusted EBITDA in 2026, subject to production volumes and carbon intensity factors [5][36] - Strong export demand for ethanol and a record corn crop are expected to support the company's market position [6][17] Regulatory Environment - The release of proposed 45C clean fuel production credit regulations is seen as a positive development for the industry, providing clarity and supporting decarbonization efforts [7] - The company is actively marketing its 2026 tax credits and expects to announce agreements soon, reflecting strong interest from counterparties [5][25]