Green Plains Partners LP (NASDAQ:GPP) Q3 2018 Earnings Conference Call Transcript

Nov 08, 2018 • 11:00 am ET

Previous

Green Plains Partners LP (NASDAQ:GPP) Q3 2018 Earnings Conference Call Transcript

Share
Close

Loading Event

Loading Transcript

Presentation
Operator
Operator

Good morning and welcome to the Green Plains Inc. and Green Plains Partners Third Quarter 2018 Earnings Conference Call.

(Operator Instructions)

Executive
Jim Stark

I will now turn the conference call over to your host, Jim Stark, VP of Investor and Media Relations. Mr. Stark, please go ahead.

Thanks, Gigi. Welcome to the Green Plains Inc. and Green Plains Partners Third Quarter 2018 Earnings Call. Participants on today's call are: Todd Becker, President and CEO; John Neppl, our CFO; and Jeff Briggs, COO. There is a slide presentation available, and you can find the presentation on the Investors page under the Events & Presentations link on both corporate websites.

(Forward-Looking Cautionary Statements)

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

Executive
Todd A. Becker

Thanks, Jim, and good morning, everyone, and thanks for joining our call today. We did report a net loss of $12.5 million or $0.31 a share and generated approximately $32 million of EBITDA for the third quarter. For the last 12 months, EBITDA has totaled $133 million.

The consolidated crush margin was $0.11 a gallon for Q3, which was $0.02 better than Q2. Green Plains produced approximately 305 million gallons of ethanol in the third quarter. Year-to-date, we have exported 18.5% of our production and expect that Q4, we'll see nearly 30% our production shipped out of the country.

We continue to ramp up volumes at our JV terminal in Beaumont. And in the fourth quarter, we have one of the biggest sales books we are executing against since we opened the terminal. Exports remain a bright spot for the industry, and we should see 5% to 10% growth in 2019 over the current year. We have seen very early interest and demand for 2019 as the price of ethanol is very attractive globally and more and more countries adopt pro-ethanol policies.

Green Plains Partners reported $16.8 million of adjusted EBITDA and a coverage ratio 0.96x for the quarter and 1.02x coverage ratio for the last four quarters. The agribusiness and energy segment experienced a bit of a dip in the quarter. Year-to-date, we have produced $24 million of EBITDA. And we expect this segment to bounce back in Q4. And we anticipate ending the year with EBITDA in the range of $35 million to $40 million for the full year.

We reported $12.2 million of EBITDA in the food and ingredients segment for Q3. Fleischmann's performed well again and cattle performed as expected after such a strong second quarter. Cattle feeding margins averaged $40 EBITDA per head. This was lower than our target EBITDA for a couple of reasons.

As we pointed out last quarter, we did pull some cattle forward in the second quarter because of a very positive sales environment in Q2, which is why margins were so strong. In Q3, we recognized sales of approximately 30,000 heads from the Bartlett transaction that had lower margins because of the short time we owned the inventory. While we did not earn normal margins on these cattle, it was