Green Plains(US:GPRE)2023-10-31 18:05Financial Data and Key Metrics Changes - The company reported consolidated revenues of $892.8 million for Q3 2023, which is $62.2 million or approximately 6.5% lower than the same period a year ago due to lower prices for ethanol and dry distillers grains [19] - Net income attributable to the company was $22.3 million, or $0.35 per diluted share, compared to a net loss of $73.5 million, or $1.27 loss per diluted share for the same period in 2022 [37] - EBITDA for the quarter was $52 million, a significant improvement from a negative $35.6 million in the prior year period [37] Business Line Data and Key Metrics Changes - The ethanol operating rate was reported at 93.9%, an increase from 90.9% in the same period last year and significantly improved from 81.5% in Q2 of this year [19] - The ag and energy segment recorded $12.2 million in EBITDA, showing strong performance [20] - The company achieved new record production levels for Ultra-High Protein in Q3 and is on pace to set new highs in Q4 [34] Market Data and Key Metrics Changes - The company has seen good uptake from Canada due to its low carbon fuel program and has started to see volumes from the EU and other regions [4] - The corn basis in the company's areas was $0.44 higher than the five-year average during Q3 [16] - The company has expanded its customer base by 25% to 30% during the quarter, indicating strong demand for its protein products globally [26] Company Strategy and Development Direction - The company is focused on maximizing production from corn at its biorefineries and aims to produce low carbon ingredients [42] - The company plans to dedicate 20% to 30% of its portfolio to 60% protein during 2024, with expectations of higher production in Q4 [27] - The company is pursuing decarbonization strategies, including participation in carbon capture and sequestration opportunities, which are expected to provide a competitive advantage [45][70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the completion of the carbon capture project and the anticipated benefits from the Summit Carbon Solutions Project [28] - The company expects to see improved free cash flow generation in Q4 and a stronger year-end position [35] - Management noted that the fundamentals for ethanol demand remain strong, with good export demand and production levels [63] Other Important Information - The company allocated $29 million of capital across its platform in Q3, with plans for CapEx in the range of $25 million to $45 million for the remainder of 2023 [23] - The company is working through a definitive merger agreement with Green Plains Partners, expected to simplify corporate structure and improve credit quality [96] Q&A Session Summary Question: Can you provide insights on the protein side and customer mix? - Management noted that the economics have improved with lower corn prices and increasing protein prices, leading to better competitiveness [78] Question: What is the status of the carbon capture strategy? - Management expressed confidence in the Summit project and its potential to enhance the company's capabilities in carbon initiatives [81] Question: When can guidance on 45Z be expected? - Management anticipates guidance by the end of the year, with ongoing discussions about lifecycle modeling for sustainable aviation fuel [86] Question: How is the company positioned regarding corn oil pricing? - Management indicated that corn oil prices have stabilized and the company is well-positioned to benefit from industry drivers towards advantaged feedstocks [87] Question: What are the expectations for EBITDA in 2024 and 2025? - Management reaffirmed previous guidance for 2025, emphasizing the advantages from the Summit project and expanded protein production [102]