Green Plains Partners LP (NASDAQ:GPP) Q3 2019 Earnings Conference Call - Final Transcript
Nov 06, 2019 • 11:00 am ET
Ladies and gentlemen, thank you for standing by, and welcome to the Green Plains Inc. and Green Plains Partners Third Quarter 2019 results. At this time all participant lines are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session [Operator Instructions].
I would now like to hand the conference over to your speaker today, Mr. Jim Stark. Please go ahead, sir.
Thanks Liz. Welcome to the Green Plains Inc. and Green Plains Partners Third Quarter 2019 Earnings Call. Participants on today's call are Todd Becker, President and Chief Executive Officer and Patrich Simpkins, our Chief Financial Officer. There is a slide presentation available, and you can find that presentation on the Investor page under the Events and Presentations link on both corporate websites.
During this call, we will be making forward-looking statements, which are predictions, projections or other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could materially differ because of factors discussed in yesterday's press releases and the comments made during this conference call and in the Risk Factors section of our Form 10-K, 10-Q and other reported filings with the Securities and Exchange Commission. We do not undertake any duty to update any forward-looking statement.
Now, I would like to turn the call over to Todd Becker.
Thanks, Jim, and good morning everyone, and thanks for joining our call today. We reported a net loss of $39 million or $1.06 per diluted share. As expected though, the financial results were driven by a weak ethanol margin environment for most of the third quarter. So far, there is a much different picture for ethanol margins in the fourth quarter as the curve has turned positive and remained that way through this call. I will discuss this more in detail later on the call.
We produced approximately 238.5 million gallons of ethanol, which put us at an 84% utilization rate for the quarter. Again, our Madison plant did take some time to get up to speed after the extended shut down and we are close to reaching our desired production levels at this plant, yet still have a little work to do.
The consolidated crush margin for the third quarter was a negative $0.06 per gallon. While certainly this is not the margin we would like to see, the industry rationalization due to the extended negative margin environment has resulted in plants shutting or slowing down, therefore reducing inventories. This culminated in a late Q3 margin improvement that has continued into the fourth quarter.
As I said, the ethanol industry did appear to show some production discipline in the third quarter as the production rate for Q3 2019 was 4% less than the same quarter a year ago.
So far into the fourth quarter, industry stocks are at the lowest level we have seen in more than two years. While margins have recovered to be positive, at similar fundamentals, last time stocks