Core Insights - REX American Resources reported record ethanol sales volume for fiscal 2025, with 290 million gallons sold, slightly up from 289.7 million gallons in fiscal 2024 [2][4][7] - The company characterized fiscal 2025 as "exceptional" and "transformative," highlighting strong export demand and a solid balance sheet with no bank debt [3][5] - The fourth quarter saw a significant increase in net income attributable to shareholders, reaching $43.7 million compared to $11.1 million in the previous year [12][13] Financial Performance - Gross profit for fiscal 2025 was $93.7 million, an increase from $91.5 million in fiscal 2024, with fourth-quarter gross profit rising to $28.9 million from $17.6 million [9] - SG&A expenses increased to $32.6 million in fiscal 2025 from $27.1 million in fiscal 2024, with fourth-quarter SG&A rising to about $12.3 million from $6.2 million [10] - Net income attributable to REX shareholders for fiscal 2025 was $83.0 million, up from $58.2 million in fiscal 2024, with diluted EPS reaching an all-time high of $2.50 [12][13] Co-Product Performance - Dried distillers grains (DDGs) sales volume decreased by 3% to 612,000 tons in fiscal 2025, with fourth-quarter volume declining about 9% year over year [1] - Modified distillers grains volume increased to 81,900 tons in fiscal 2025 from about 70,000 tons in fiscal 2024, with an average selling price of approximately $65.82 per ton [7] - Corn oil sales increased to approximately 97.0 million pounds in fiscal 2025, up from 88.1 million pounds in fiscal 2024, with an average selling price of $0.54 per pound [8] Expansion and Initiatives - The One Earth Energy expansion project is nearing completion, expected to reach 200 million gallons annual capacity by fiscal 2026 [6][15] - The carbon capture facility is complete but awaiting permits for the Class VI well and pipeline, with the company engaged with regulatory bodies [16][17] - REX has invested approximately $166 million in carbon capture and ethanol expansion projects, remaining within its budget of $220 million to $230 million [18] Market Environment and Outlook - The company anticipates a profitable start to fiscal 2026, supported by strong exports and the benefits from the 45Z tax credit [5][19] - Management noted that U.S. ethanol export volumes reached record levels in 2025, with continued strength into 2026 [20] - Favorable corn supplies are expected to support manageable input costs and healthy crush margins [21]

Strategic Performance and Operational Drivers - Achieved record fiscal 2025 EPS and net income, attributed to strong export demand, favorable commodity pricing, and high operational efficiency [5] - Recognized $28,000,000 in 45Z tax credits for the full fiscal year 2025, significantly boosting fourth-quarter net income [5] - Maintained 22 consecutive quarters of profitability by managing the spread between improved ethanol pricing and reduced corn costs [5] - Expanded ethanol sales volumes to an all-time high of 290,000,000 gallons, supported by robust global demand for lower-carbon fuels [5] - Strengthened the balance sheet to include $375,800,000 in cash and zero bank debt, providing flexibility for major capital projects [5] - Capitalized on strong corn oil demand, with sales volumes increasing 10% year-over-year to approximately 97,000,000 pounds [5] Growth Initiatives and 2026 Outlook - Anticipates the One Earth Energy capacity expansion to 200,000,000 gallons will become fully operational in fiscal 2026 [5] - Expects continued 45Z tax credit benefits through 2029, with potential for higher credits once carbon capture and sequestration (CCS) projects are permitted [5] - Projects a profitable first quarter of 2026, supported by favorable corn supplies and manageable input costs [5] - Assumes high global oil prices will continue to drive ethanol demand by maintaining a significant price advantage over petroleum-based gasoline [5] - Remains focused on the 'Three P's' strategy—Profit, Position, and Policy—to guide capital allocation and operational priorities in the coming year [5] Strategic Projects and Regulatory Context - Invested approximately $166,000,000 to date in carbon capture and ethanol expansion projects, remaining within the total budget of $220,000,000 to $230,000,000 [5] - Noted that while the carbon capture facility is physically complete, operations are pending Class VI well and pipeline permits from the EPA and state commissions [5] - Management confirmed the current recognition rate for 45Z tax credits is approximately $0.10 per gallon across their total volume [8] - Successful carbon capture implementation could reduce CI scores by an additional 30 to 35 points, potentially reaching a $1.00 per gallon credit at the One Earth facility [8]

Financial Data and Key Metrics Changes - For the full year 2025, adjusted EBITDA was $90.2 million, flat compared to 2024, despite a 28% increase in production [4][15] - Revenue for Q4 2025 was $99.8 million, up from $80 million in Q4 2024, with adjusted EBITDA increasing to $34.2 million from $22.6 million in the same period last year [15] - D3 pricing declined by approximately $0.70, equating to a $33 million impact on adjusted EBITDA, with the average realized RIN price at $2.45 in 2025 compared to $3.13 in 2024 [15][19] Business Line Data and Key Metrics Changes - RNG production reached 4.9 million MMBtu in 2025, representing a 28% year-over-year growth, with Q4 production exceeding 1.3 million MMBtu, up approximately 24% from Q4 2024 [16] - The Fuel Station Services segment's EBITDA increased to $46.7 million in 2025, a 22% increase from $38.4 million in 2024 [16][17] Market Data and Key Metrics Changes - The trucking and logistics sector experienced macro softness in 2025, but market fundamentals have stabilized and improved entering 2026, leading to a re-engagement by fleets on deferred truck purchases [11][12] - CNG and RNG currently fuel only 2% of the heavy-duty trucking market, indicating significant growth potential [12] Company Strategy and Development Direction - The company aims to improve RNG production through enhanced operations and efficiencies, with expectations for incremental production growth from existing assets in 2026 [5][19] - The company is focusing on expanding its Fuel Station Services platform to support RNG and CNG fueling infrastructure for heavy-duty trucking fleets, with plans to allocate more capital to this segment [11][47] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the 2026 outlook, citing improved operations and macro conditions that could lead to stronger growth in the Fuel Station Services segment [5][6] - The company anticipates a challenging start to 2026 due to adverse weather conditions but remains focused on disciplined execution of strategic growth objectives [19][75] Other Important Information - The company successfully completed a $180 million Series A preferred facility, enhancing its liquidity position [9][14] - Capital expenditures for 2025 were approximately $90 million, with a focus on new RNG facilities and OPAL-owned fueling stations [18] Q&A Session Summary Question: Liquidity and growth outlook beyond current projects - Management indicated a liquidity position of about $160 million available for projects in construction, with a focus on capital allocation to both RNG production and Fuel Station Services [26][27] Question: Inlet utilization levels and future expectations - Management reported an increase in inlet utilization levels, with expectations to achieve 85%-86% utilization in the future [31][33] Question: Specific changes to improve operations and asset utilization - Management emphasized a focus on improving operational efficiencies and quality of gas input to enhance output [38][39] Question: Relationship with NextEra - Management confirmed a strong ongoing partnership with NextEra, with no significant changes expected in their collaboration [43] Question: MMBtu capacity goals for 2026 - Management highlighted a strong pipeline of new project opportunities and a commitment to invest in both RNG production and Fuel Station Services [46][47] Question: Growth expectations for Fuel Station Services in 2026 - Management anticipates a more pivoting year for Fuel Station Services, with growth expected to materialize more significantly in 2027 [75]

Market Overview - Soybeans are experiencing slight losses of 1 to 2 cents in the front months on Wednesday morning, following gains of 4 to 5 ½ cents on Tuesday [1] - The national average Cash Bean price increased by 4 3/4 cents to $10.00 1/2 [1] - Soymeal futures are down by $1.40 to $2.60, while Soy Oil futures have risen by 102 to 129 points [1] Regulatory Updates - The Treasury has issued guidance on the 45Z tax credit, which is expected to add some premium to bean oil and reduce uncertainty in the market [2] - A public hearing process regarding this guidance is scheduled for May [2] Import Data - EU soybean imports from July 1 to February 1 have reached 7.29 million metric tons (MMT), a decrease of 1.33 MMT compared to the same period last year [3] - As of March 26, Soybeans closed at $10.65 3/4, reflecting an increase of 5 1/2 cents, but are currently down by 1 3/4 cents [3] - Nearby Cash prices are at $10.00 1/2, up 4 3/4 cents, while May and July 26 Soybeans closed at $10.77 1/4 and $10.90 1/2 respectively, both showing increases of 4 3/4 cents [3]

Group 1 - Soybeans experienced gains of 4 to 5 ½ cents, with the national average Cash Bean price rising to $10.00 1/2 [1] - Soymeal futures decreased by $1.40 to $2.60, while Soy Oil futures increased by 102 to 129 points [1] - The USDA's monthly Fats & Oils report indicated that 229.84 million bushels of soybeans were crushed in December, which was 4.24% higher than November and 5.59% larger year-over-year [2] Group 2 - The marketing year crush since September totaled 891.58 million bushels, reflecting a 7.43% increase from the same period last year [2] - EU soybean imports from July 1 to February 1 reached 7.29 million metric tons, down 1.33 million metric tons compared to the previous year [2] - On March 26, soybeans closed at $10.65 3/4, with nearby cash prices at $10.00 1/2, both showing increases [3]

Financial Data and Key Metrics Changes - The company reported a stable production profile throughout the year, with first-half capital expenditures (Capex) expected to account for about 60% of the total annual Capex [9] - Current production levels are generating approximately $30 million annually under the proposed guidance for the 45Z program [11] - The average drilling cost for Utica wells is approximately $1,700 per foot, with performance aligned with expectations [27] Business Line Data and Key Metrics Changes - The RMG business line has seen stable pricing in the PA Tier 1 REC market, with expectations for future price increases tied to stricter renewable energy standards [10] - The company is completing about 5 Utica laterals this year, indicating confidence in the Utica program despite a lower number of turn-in-lines than expected [17] Market Data and Key Metrics Changes - Coal mine methane volumes have experienced a modest year-over-year decline, primarily driven by underlying mining activity [30] - The company is approximately 60% hedged for 2027, targeting a weighted average NYMEX price of about $4, which is favorable for business performance [32][34] Company Strategy and Development Direction - The company is focused on maintaining production levels while being responsive to material changes in gas prices, with plans to potentially add frac activity in the second half of 2026 [25][26] - Long-term strategies involve waiting for infrastructure and demand projects to materialize before increasing production volumes [40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in operational preparedness during extreme cold weather events, indicating no expected disruptions to operations or volumes [19] - The company is cautious about increasing production without clear visibility on future gas prices, emphasizing a long-term approach rather than reacting to short-term market fluctuations [39] Other Important Information - The company is exploring new technologies, such as AutoStep, which has been adopted for flowbacks, but currently does not contribute materially to financial results [21] - The company has a remaining inventory of approximately 40,000-50,000 acres in the core Southwest PA Marcellus area, which is expected to last into the next decade [46] Q&A Session Summary Question: Inquiry about capital and production profile - Management indicated that first-half Capex would be about 60% of the total, allowing flexibility for potential acceleration in the second half [9] Question: Outlook on RMG business line pricing - Management noted that the PA Tier 1 REC market has stabilized, with future price increases dependent on stricter renewable energy standards [10] Question: Clarification on Utica program size - Management clarified that the smaller program size is due to timing, with confidence in the Utica program remaining strong [17] Question: Expectations for operational disruptions due to weather - Management confirmed that they do not expect any disruptions, as preparations have been made [19] Question: Update on new technology business - Management stated that while AutoStep technology is being adopted, it has not yet materially impacted financial results [21] Question: Hedging strategy for 2027 - Management confirmed they are approximately 60% hedged for 2027, targeting a favorable NYMEX price [32][34] Question: Incremental takeaway and infrastructure projects - Management noted that while some projects are proposed, there is currently no material movement off maintenance production levels [42]

Core Viewpoint - The marginally positive data for palm oil production and exports in December, combined with the upcoming approval of the US 45Z tax credit rules and the upward breakthrough of the Wenhua Commodity Index, has supported a rebound in oilseeds after significant declines. However, there remains a high probability of inventory accumulation for palm oil in December, which may suppress the short-term rebound momentum for palm oil and related oils [2][25]. Group 1: Palm Oil Production and Export Data - The forecast for palm oil production from December 1-15 showed a lower-than-expected decline, while exports experienced a significant drop, leading to expectations of inventory accumulation reaching 3 million tons, which negatively impacted market sentiment [3][17]. - The SPPOMA estimates a 7.15% decrease in palm oil production from December 1-20, which is a larger decline compared to the previous 15 days. This has led to a downward adjustment in production forecasts [4][17]. - Shipping agencies ITS and Amspec reported a 2.4% increase and a 0.87% decrease in palm oil exports, respectively, for December 1-20, indicating a significant improvement compared to previous declines [4][17]. Group 2: Market Sentiment and Price Projections - The current market sentiment is under pressure due to the lack of signs of stabilization in palm oil prices, which makes it difficult to attract demand from importing countries. India's oilseed demand is expected to increase by 800,000 to 1 million tons annually, but the purchasing pace will significantly influence short-term palm oil trends [6][20]. - Without further positive developments, the short-term price for palm oil (P05) may face resistance around 8,600, with support expected around 8,300 [8][22]. - The upcoming approval of the 45Z tax credit rules in the US is anticipated to improve the profitability of biodiesel plants, which could enhance production and inventory stocking, potentially supporting palm oil prices [9][24]. Group 3: US 45Z Tax Credit Rules - The uncertainty surrounding the US biodiesel policy includes the final ruling on the 2026-2027 RVO, the SRE redistribution plan, and the 45Z tax credit issuance rules. The recent announcement of the 45Z tax credit rules entering the final approval stage is a significant development [9][23]. - The proposed rules submitted to the White House include key guidelines for calculating emission factors and determining credit amounts, marking a critical step towards the implementation of this incentive policy [10][24]. - If the 45Z tax credit rules are implemented promptly, it is expected to significantly enhance the profitability of US biodiesel plants, which could positively impact the domestic palm oil market [12][24].

Financial Data and Key Metrics Changes - The company reported a production efficiency gain contributing to overall outperformance in production, driven by new well performance and operational execution [46] - The capital efficiency ratio is approximately $0.85 per million, with a production target of $580 million against a capital expenditure of $500 million [10][11] Business Line Data and Key Metrics Changes - The company plans to maintain initial activity levels in the E&P business, with no changes expected at the current time due to storage levels approaching four trillion cubic feet [9] - The Utica wells are performing slightly above expectations, with ongoing efforts to improve operational efficiency and reduce costs [22][23] Market Data and Key Metrics Changes - The company anticipates a sequential decline in production for Q3 and Q4, with a potential increase in activity levels in late 2025 as they prepare for winter [17][19] - The market for renewable natural gas (RMG) is expected to grow, with discussions ongoing with tech companies regarding sustainable energy solutions [35][54] Company Strategy and Development Direction - The company is focused on balancing the development of its core Southwest PA field while also exploring opportunities in the Utica region [60] - There is an emphasis on leveraging AI and energy solutions to enhance the value of RMG products in the market [35][54] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the 45Z tax credit program, with expectations for a $30 million annual run rate starting in 2026 [5][28] - The company remains cautious about locking in long-term agreements until there is more clarity on in-basin demand and the connection of data centers to natural gas projects [63][64] Other Important Information - The company is actively working on optimizing drilling and completion operations to improve performance and reduce costs in the Utica play [21] - The management highlighted the importance of sustainability solutions in the context of growing demand for natural gas, particularly from the tech industry [54] Q&A Session Summary Question: Details on the 45Z tax credit timing and eligibility - The first year eligibility to claim credits would be in 2025, with a potential run rate of $30 million starting in 2026 [5][6] Question: Plans for E&P business activity levels - The company will maintain initial activity levels, with no changes expected at this time due to current storage levels [9] Question: Drilling and completion activity levels in the second half - A sequential decline in production is expected for Q3 and Q4, with a potential increase in activity levels in late 2025 [17][19] Question: Cost competitiveness of Utica wells - Current cost structures make Utica wells competitive with Marcellus opportunities, with a focus on improving repeatability of results [51][60] Question: Impact of in-basin demand on long-term natural gas prices - In-basin demand is expected to be bullish for natural gas prices, but the company is cautious about its hedging strategy in the short term [41][42] Question: Recognition of gas value in voluntary carbon markets - The company will sell gas to whichever market recognizes the highest value, with expectations for voluntary pricing to rival regulatory pathways in the long term [52][54]