Green Plains(US:GPRE)2023-02-08 19:21Financial Data and Key Metrics Changes - Green Plains consolidated revenues for Q4 2022 were $914 million, an increase of $112 million compared to the same period in 2021, driven by higher run rates [21] - The net loss attributable to Green Plains was $38.6 million or $0.66 per diluted share, compared to a loss of $9.6 million or $0.18 per diluted share for the same period in 2021 [49] - Adjusted EBITDA for Q4 2022 was $5.8 million, down from $32 million in the same period last year [49] - The consolidated crush margin for Q4 2022 was $0.03 per gallon, which is $0.17 lower than the previous year [49] Business Line Data and Key Metrics Changes - The Ag and Energy segment recorded an EBITDA increase of $9.6 million to $11.8 million for Q4 2022, driven by market volatility in merchant trading and distribution [22] - The plant utilization rate improved to 93.4% in Q4 2022, compared to 83% in the same period last year [21] - Capital expenditures for 2022 totaled $212 million, with expectations for 2023 CapEx in the range of $150 million to $250 million [25][52] Market Data and Key Metrics Changes - The basis in the Western Corn Belt remained high, about $0.45 per bushel higher than the prior five-year average [15] - The company anticipates interest expense for 2023 to be approximately $40 million, reflecting current interest rates [23] Company Strategy and Development Direction - The company is focused on its transformation plan, which includes expanding MSC protein and corn oil facilities, completing a clean sugar facility, and executing carbon capture initiatives [20][34] - Green Plains is positioning itself for sustainable aviation fuel opportunities through partnerships and technology advancements [45][61] - The company aims to capitalize on the Inflation Reduction Act's benefits to enhance margins starting in 2025 [89] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the ethanol market but expressed optimism about the potential for margin improvements as market conditions evolve [14][93] - The company is confident in its transformation strategy and the long-term value of its biorefinery platform [19][34] - Management highlighted strong customer engagement and expectations for continued demand for their products [27][68] Other Important Information - The company has contracted and sold nearly half of its anticipated production for 2023, with approximately 250,000 tons or 75% of capacity effectively spoken for [27] - The partnership with Tallgrass and United Airlines aims to develop sustainable aviation fuel technology, which is seen as a significant opportunity for the company [45][61] Q&A Session Summary Question: What are the current asset values and their implications for the ethanol industry? - Management noted strong interest in sustainable aviation fuel and decarbonization, leading to increased asset values in the ethanol industry [64] Question: How is the company approaching the commercial process for its clean sugar technology? - Management indicated that learnings from the protein sales side will apply to the clean sugar technology business, emphasizing the importance of quality control and ramping up sales processes [73] Question: What are the expectations for protein pricing in 2023? - Management confirmed that they have exceeded the initial target of a $200 premium over traditional products and are effectively sold out for the first half of the year [67][68] Question: How does the company view the future of ethanol pricing in relation to sustainable aviation fuel? - Management expressed optimism that the transition to sustainable aviation fuel will provide the industry with pricing power and improve margins [76][100]