Green Plains reports improving ethanol margins
Green Plains Inc. reported Q2 financial results on August 6, highlighting progress in clean sugar, high-protein coproducts, and CCS projects. Ethanol margins improved towards the end of Q2, driven by record ethanol exports and favorable natural gas and corn prices. Equipment upgrades at Mount Veron and Obion plants are expected to boost production by 40 MMgy. Green Plains achieved record yields in renewable corn oil and Ultra-High Protein. The CCS project with Tallgrass’s Trailblazer pipeline is on track for a 2025 startup. Despite a net loss of $244 million for Q2, an improvement in EBITDA to $4.8 million was reported.
Green Plains Inc. released second quarter financial results on Aug. 6, reporting progress with the clean sugar, high protein coproduct and carbon capture and storage (CCS) projects. Market fundamentals are looking strong going into the second half of 2024, according to the company.
Todd Becker, president and CEO of Green Plains, said ethanol margins started to improve near the end of the second quarter and are continuing to improve during Q3. He cited potential record-high ethanol exports and favorable natural gas and corn prices as reasons for that improvement.
According to Becker, Green Plains is continuing to work through equipment refreshes at its Mount Veron plant in Indiana and its Obion plant in Tennessee. Both facilities are currently awaiting conveyor replacements, and the Obion facility is set to install a new thermal oxidizer. The improvements are expected to unlock an additional 40 MMgy of production capacity, Becker said.
During the second quarter, Green Plains achieved record platform renewable corn oil yields, which Becker said averaged 1.2 pounds per bushel. The company also noted it achieved record Ultra-High Protein platform yields in June.
The turnkey joint venture MSC system at Tharaldson Ethanol in North Dakota came online during the second quarter, boosting total production capacity for Ultra-High Protein marketed by Green Plains to 430,000 tons. Becker said the project continues debottlenecking work and has started shipping product to customers.
Becker also discussed the Clean Sugar Technology facility in Shenandoah, Iowa, noting commissioning is ongoing.
In addition, Green Plains announced progress with its CCS initiatives. Becker said compression equipment needed for its three Nebraska plants that are expected to be connected to Tallgrass’s Trailblazer CO2 pipeline project has been ordered. The Trailblazer project remains on pace for startup in the second half of 2025, he added.
Jim Stark, chief financial officer at Green Plains, said the company’s ethanol plants operated at approximately 93% capacity during the second quarter, up from 81.5% during the same period of last year. Capacity utilization is expected in the mid-90% range for the remainder of the year, he added.
Green Plains reported a nest loss of $244 million for the second quarter, compared to a net loss of $52.6 million during the same period of 2023. Earnings per share was negative 38 cents per basic and diluted share, compared to negative 89 cents per basic and diluted share reported for the same period of last year.
EBITDA was $4.8 million for the second quarter, a $19.7 million improvement when compared to the second quarter of 2023, driven by stronger ethanol production segment results, including consolidated crush margin of $22.7 million in the second quarter.
Source Link : https://ethanolproducer.com/articles/green-plains-reports-improving-ethanol-margins
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