Green Plains Inc. (NASDAQ:GPRE) Q3 2016 Earnings Conference Call - Final Transcript

Nov 01, 2016 • 11:00 am ET


Green Plains Inc. (NASDAQ:GPRE) Q3 2016 Earnings Conference Call - Final Transcript


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Good day, everyone and welcome to Green Plains Incorporated and Green Plains Partners LP Third Quarter Results Conference Call. Today's call is being recorded.

At this time, I would like to turn the call over to Jim Stark. Please go ahead.

Jim Stark

Thanks, Jessica. Welcome to the Green Plains Inc. and Green Plains Partners' third quarter 2016 earnings call. Participants on today's call are Todd Becker, President and Chief Executive Officer; Jerry Peters, our Chief Financial Officer; Jeff Briggs, our Chief Operating Officer; Steve Bleyl, Executive Vice President of Ethanol Marketing; and Ken Simril, President and CEO of Fleischmann's Vinegar Company.

There is a slide presentation for you to follow along. You can find this presentation on the investor page under the Events and Presentations link on both corporate websites. (Forward-Looking Cautionary Statement)

Now, I would like to turn the call over to Todd Becker.

Todd Becker

Thanks, Jim, and thanks everybody for joining our call this morning. We reported a net income of $7.9 million or $0.20 a share. EBITDA was $49.1 million for the third quarter. We did come into the quarter a little over 50% hedged, which had limit on our upside, but we still participated in the margin expansion somewhat. Even with that said, we are set up well for the fourth quarter margin environment, which I will discuss with you later in the call.

Each of our segments contributed to our operating results, ethanol production contributed $15.3 million of total segment operating income. The partnership produced a record of $15.1 million of operating income, and our agribusiness segment had a really nice quarter was $6.3 million of operating income driven by continued strength of our cattle business.

Our marketing and distribution segment operating income was a bit lower than expected but the fourth quarter looks strong. So we should see a good finish for the year based on current conditions. The consolidated ethanol crush margin which again is operating income before depreciation and amortization from the ethanol production segment including corn oil plus intercompany fees such as Green Plains Partners storage and transportation fees was $52.6 million, or $0.18 a gallon for the quarter.

During the quarter we produced 292 million gallons of ethanol, 790,000 tons of distillers grains and 72.2 million pounds of corn oil while processing nearly 3 million tons of corn. Our yield was 2.87 gallons of ethanol per bushel of corn for the quarter, excluding the three plants added last week of September. Export sales accounted for 12% of the company's ethanol production for the third quarter. We also exported 18% of our distillers grains and 68% percent of the corn oil we sold.

The ethanol margin environment was steady for the third quarter gasoline and ethanol demand continue to remain 3% higher year-over-year in the U.S. In addition the ethanol blend into fuel supply is moving past the 10% mark. And based on the data for the first eight months of the year ethanol exports are on track to reach approximately 900 million gallons