Second Quarter Highlights:
- Net Income: $36 million ($1.05 per diluted share); adjusted net income: $39 million ($1.15 per diluted share).
- Adjusted EBITDA: $98 million.
- Renewables: Pretax income of $39 million and adjusted pretax income attributable to The Andersons of $23 million.
- Trade: Increased pretax income of $5 million and adjusted pretax income of $9 million.
- Nutrient & Industrial: Pretax income of $23 million.
Comments from Leadership:
“Overall, our second-quarter results met expectations amid shifting ag markets,” said Chairman and CEO Pat Bowe. “The Renewables segment had a strong quarter with increased ethanol production and higher margins, although not as high as last year’s results due to declining co-product values. Trade results improved slightly from last year despite lower prices and volatility. With most fertilizer applications occurring in Q2, the Nutrient & Industrial segment performed well, although weather-related delays and lower margins resulted in a dip compared to last year’s performance. Farmer selling remains slow due to adequate supply in this low-price commodity environment. Our portfolio mix, including grain assets and our growing premium ingredients business, helps offset reductions in merchandising opportunities.”
Bowe added, “We are actively pursuing growth opportunities. In early June, we announced plans to acquire an ownership interest in Skyland Grain LLC, which has a large grain and agronomy footprint across Kansas, Eastern Colorado, and the Texas and Oklahoma panhandles. We are dedicating significant resources to this opportunity and expect to provide an update later in Q3. Our longer-term Renewables projects are progressing, with a focus on lowering the carbon intensity of our ethanol plants. We continue to manage a robust pipeline with significant growth opportunities across our businesses.”
Executive Vice President and CFO Brian Valentine said, “Our businesses generate consistent cash flows, allowing us to reduce debt. With strong cash flows and lower commodity prices, we maintain a higher-than-normal cash position for this time of year. We remain well below our long-term debt to EBITDA target of less than 2.5 times and are pleased with our strong balance sheet. We plan to invest in additional growth projects using a disciplined approach to ensure alignment with our strategy and financial goals.”
Financial Overview:
- Cash from Operations: $304 million in Q2 2024, down from $541 million in Q2 2023.
- Cash from Operations (excluding working capital changes): $89 million in Q2 2024, down from $118 million in Q2 2023.
- Capital Expenditures: $29 million in Q2, a decrease of $21 million from 2023, with several larger projects planned for the second half of the year.
Segment Overview:
Trade:
- Pretax Income: $5 million; adjusted pretax income: $9 million (compared to $5 million and $7 million in Q2 2023, respectively).
- Improved performance in the grain asset footprint due to better wheat storage income.
- Growth in the premium food and feed ingredients business, driven by the acquisition of ACJ International and recent capital investments.
- Reduced volatility and lower prices limited merchandising business opportunities.
- Adjusted EBITDA: $24 million (compared to $27 million in Q2 2023).
Renewables:
- Pretax Income: $39 million; adjusted pretax income attributable to The Andersons: $23 million (compared to $67 million and $32 million in Q2 2023, respectively).
- Improved ethanol production margins due to lower corn basis in the east.
- Efficient operation of production facilities with increased volume and higher ethanol yields.
- Lower co-product values due to reduced corn prices, but improved feed ingredient demand.
- Adjusted EBITDA: $52 million (compared to $74 million in Q2 2023).
Nutrient & Industrial:
- Pretax Income: $23 million (compared to $43 million in Q2 2023).
- Impacted by a late and wet spring application season and declining nutrient prices.
- Higher sales volume in the engineered granules business.
- Future agronomy sales and applications dependent on harvest timing and grower profitability.
- Adjusted EBITDA: $32 million (compared to $52 million in Q2 2023).
