Green Plains(US:GPRE)2023-05-06 17:20Financial Data and Key Metrics Changes - Green Plains reported consolidated revenues of $832.9 million for Q1 2023, an increase of $51.5 million compared to the same period last year, driven by higher run rates in ethanol and high-protein ingredients production [64] - The company experienced a net loss of $70.3 million, or a loss of $1.20 per diluted share, compared to a loss of $61.5 million, or a loss of $1.16 per diluted share in Q1 2022 [64] - Adjusted EBITDA for the quarter was a negative $27.7 million, consistent with the prior year, with a $4.5 million increase in depreciation and amortization expenses [6][64] - Cash and cash equivalents at the end of the quarter totaled $408 million, with a working capital of $376.9 million, down from $464.4 million at the end of 2022 [7][65] Business Line Data and Key Metrics Changes - The Ag & Energy segment recorded $5.2 million in EBITDA, about $5.5 million lower than the prior year, primarily due to market volatility [6] - The company’s plant utilization rate improved to 87.5% in Q1 2023, compared to 83.1% in the same period last year [64] - The MSC operations achieved an average production of over 900 tons per day of ultra-high protein products, with some days exceeding 1,000 tons [4] Market Data and Key Metrics Changes - Ethanol margins were reported as weak in Q1 but began to recover, with expectations for improved margins in the second half of the year [62][80] - Renewable diesel demand is anticipated to grow, with the company positioned to benefit from state-level programs supporting low-carbon renewable corn oil production [5][69] - The company noted a recent resurgence in corn oil pricing, trading at a premium to soybean oil, which is expected to tighten as renewable diesel capacity increases [69] Company Strategy and Development Direction - The company is focused on a transformation strategy that includes expanding protein production, clean sugar initiatives, and decarbonization efforts [5][70] - Plans to partner or acquire larger plants for technology installation are underway, with a focus on optimizing production processes [8] - The company aims to enhance its product offerings, including a 60% protein product, to replace traditional feed ingredients [66][67] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of ethanol margins and the potential for increased corn acreage in 2023 [80] - The company is confident in its ability to meet customer expectations and is focused on executing its transformation strategy to insulate against market volatility [66][70] - Management highlighted the importance of decarbonization and the potential for significant value increases in the future due to low-carbon initiatives [70] Other Important Information - The company announced an offer to acquire all publicly held common units of Green Plains Partners to simplify its corporate structure and improve governance [61] - The clean sugar facility in Shenandoah is progressing well, with construction on track for completion by the end of the year [69] Q&A Session Questions and Answers Question: Can you provide insights on the ethanol crush and the impact of the Wood River plant being offline? - Management indicated that the Wood River plant's downtime would have a minor impact on the second quarter utilization rate, but they expect to return to full rates soon [62][80] Question: What are the plans for carbon capture and other plants not on the pipeline? - Management discussed ongoing evaluations of carbon capture technologies and potential projects, emphasizing the importance of sequestration for maximizing benefits [51][70] Question: How does the company view the current landscape for ethanol assets and M&A activity? - Management noted that while there is interest in ethanol M&A, the focus remains on optimizing existing assets and exploring strategic partnerships [43][80]