Commercial group drives profit rebound at The Andersons

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MAUMEE, OHIO, US – An “all-time record performance” in the Commerce group contributed to The Andersons, Inc.’s best third quarter performance since 2014, said Patrick E. Bowe, president and chief executive officer. The direction.

Net income for the third quarter ended September 30 totaled $ 15.74 million, or 42 per share on common shares, compared to a loss of $ 1.06 million for the same period a year ago. Sales and merchandising revenue in the quarter jumped 59% to $ 2.99 billion from $ 1.89 billion.

The Commerce group led the charge in the quarter, which posted adjusted third-quarter profit of $ 27.62 million, up sharply from $ 6.85 million in the same period a year ago. . Sales and merchandising revenues, meanwhile, rose 56%, from $ 1.43 billion to $ 2.24 billion.

“The trade had an excellent quarter, performing well in dynamic grain markets, where low grain inventories provided excellent merchandising and elevation opportunities,” Bowe said on a conference call on 3 November with analysts. “We have had particularly strong elevation margins in a number of regions. Our locations in Louisiana were not affected by the recent hurricanes and we were able to serve our customers on an ongoing basis. Idaho also benefited from a strong base appreciation in its wheat stocks. Our propane distribution business continued to perform very well. Receipts from the winter wheat crops have been better than expected and we are seeing a return of storage income in the corn and wheat markets. We also recorded additional gross margin from new profit centers during the quarter, including our Swiss sales office. “

The Andersons said they suffered a loss of $ 3.64 million in its Ethanol group in the third quarter of fiscal 2021, compared to adjusted profit of $ 1.15 million for the same period a year ago . Sales and merchandising revenues totaled $ 614.64 million, up 76% from $ 349.96 million a year ago.

“Although our ethanol segment suffered a loss in the quarter, panel mill margins improved and US ethanol inventories ended the quarter very low,” Bowe said. “As we predicted in our last earnings call, we were negatively impacted in the third quarter by a high corn base in our ethanol plants, but we saw relief when we started harvesting corn. . We have completed scheduled shutdowns and increased quarterly ethanol production. Co-products, in particular distillery corn oil and high protein foods, were sold at improved values. Third-party merchandising of ethanol and related products nearly doubled the 2020 results. The quarter also included mark-to-market losses of $ 6.8 million, as we expect the majority of they will reverse in the fourth quarter. “

The Andersons also suffered a loss in its plant nutrient business. The loss of $ 5.83 million during the period compared to a similar loss of $ 5.39 million during the same period a year ago. The company’s sales and merchandising revenues climbed to $ 142.06 million from $ 102.71 million.

For the remainder of 2021, Bowe said the Andersons outlook remains positive.

“While export demand for grains has seasonally slowed, we expect strong global demand for crops produced in the United States through 2022,” he said. “This demand continues to support global grain trade and commodity prices above historical averages.

“The harvest in our draw area is progressing well. Farmers’ incomes are high and we expect a bountiful harvest that will provide us with additional merchandising and elevation opportunities through 2022. Given these conditions, we remain optimistic about the potential of our business segment. Global supplies are expected to be tight beyond this 2021 crop. Some storage income opportunities have reverted to corn and wheat, and we are able to acquire a larger portion of the summer wheat crop than we do. planned. A large harvest in 2021 will reduce but not eliminate the impact of strong global demand. With a large business portfolio, the benefits of grain marketing for consumer demand as well as the supply of storage space, we see continued complementary opportunities.

“We continue to navigate these volatile markets well and remain focused on risk management. While we believe our fourth quarter in trading could be comparable to 2020, keep in mind that the previous year included particularly high margin soybean sales. We expect good harvest results despite some delays due to the recent wet weather in the corn belt. “

Bowe said The Andersons is optimistic about long-term growth prospects in its major agricultural segments, including new products and adjacent markets. He said the company continues to look for ways to apply its expertise in commodity trading and logistics. Recent examples include the opening of a new trading office in Switzerland and the acquisition of Capstone Commodities, he said. In addition, the company is studying adjacencies such as on-farm carbon solutions and other opportunities in sustainable agriculture.

“We will continue to invest in high-end products in the food and feed supply chains,” he said. “We are evaluating both organic ingredients and new ingredients for human and animal consumption, including pet food, and expanding our organic fertilizer offering. Biofuels are a rapidly evolving field, particularly in the supply chain surrounding renewable diesel. We will participate mainly through entry and offtake agreements as well as through the optimization of our production of raw materials. In addition, we will continue to improve the efficiency of our ethanol plants to maintain our strong position.


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