Futures and Commodity Market News

MAUMEE, Ohio, May 7, 2024 (CNW Group via COMTEX) --

 The Andersons, Inc. (Nasdaq: ANDE) announces financial results for the first quarter ended March 31, 2024.

First Quarter Highlights:

"Overall, our first quarter results were fairly comparable to last year's first quarter. Renewables doubled our 2023 results on great operating performance in our ethanol plants. We had good improvement in Nutrient & Industrial's agricultural product lines. Trade had a tough comparison against last year's record first quarter but posted an above average Q1 result in generally quiet ag markets," said President and CEO Pat Bowe. "We are feeling some market sluggishness, with farmers reluctant to engage in this lower-price environment and softer global demand for U.S. crops. We are also seeing a return of carry in the wheat markets and expect an increase in the wheat storage rates."

"We are actively pursuing opportunities for growth across our businesses. In Renewables, these opportunities include several longer-term capital projects to lower the carbon intensity of our ethanol plants, which are expected to result in positive financial results under the Inflation Reduction Act. We continue to grow the volume merchandised by our renewable diesel feedstock team. Although refinery delays have compressed the current margins, we expect this to improve as the industry build-out continues. Within Trade, we have partnered with several large consumer products companies to source lower-carbon commodities from growers and expect to continue to develop these capabilities," continued Bowe. "In Nutrient & Industrial, we recently closed on the acquisition of Reed and Perrine, a bolt-on acquisition that will result in geographic expansion of our Turf business. We continue to manage a very robust pipeline with significant growth opportunities in each of our businesses. With our well-positioned balance sheet, we have good capacity for growth."

Cash, Liquidity, and Long-Term Debt Management

"Our businesses continue to generate strong cash flows," said Executive Vice President and CFO Brian Valentine. "Our first quarter is typically the peak of our working capital usage cycle. Due to the strong recent cash flows and lower commodity prices, we continue to show a higher-than-normal cash position at quarter end and our $1.5 billion main credit facility remains undrawn. We remain well below our long-term debt to EBITDA target of less than 2.5 times and are pleased with the strength of our balance sheet. We have meaningful capacity for growth and continue our disciplined approach to evaluating projects that fall within our stated strategy and meet our required financial hurdles."

The company used cash from operating activities of $240 million and $334 million in the first quarter of 2024 and 2023, respectively, and cash from operations before working capital changes in the same periods was $48 million and $41 million, respectively. Cash spent on capital projects in the quarter totaled $27 million, a slight increase from 2023.

First Quarter Segment Overview

Trade Results Lower with Difficult Prior Year Comparison

The Trade segment recorded pretax income of $6 million and adjusted pretax income of $9 million for the quarter compared to pretax income of $39 million and adjusted pretax income of $24 million in the first quarter of 2023.

Trade's grain asset locations were relatively consistent year-over-year as domestic producers are still hesitant to forward sell due to lower commodity prices combined with limited basis appreciation to start the year. The merchandising business remained profitable but could not match a very strong Q1 2023. An oversupply of commodities have shifted the global supply and demand balance, moving the market from an inverse to a carry and causing prices to weaken. While carry markets benefit our assets, reduced volatility and lower prices reduce opportunities for the merchandising business. In addition, given recent geopolitical unrest, we have intentionally and prudently pulled back on activity in certain regions.

Premium food and feed product lines produced stronger results in the first quarter, and recent acquisitions and growth capital investments continue to be accretive to this line of business.

With shifting fundamentals, our mix of assets and merchandising businesses provide a solid foundation for us to benefit from large crops and carry markets, with potential improved wheat income opportunities returning to the market. Our assets are well-positioned for the grains to flow in due course. Domestic premium ingredient demand is also expected to stay solid and should continue to support recent capital growth investments.

Trade's first quarter adjusted EBITDA was $24 million, compared to first quarter 2023 adjusted EBITDA of $44 million.

Renewables Reported Strong Quarter on Record Production and Favorable Ethanol Margins

The Renewables segment reported pretax income of $23 million and adjusted pretax income attributable to the company of $13 million in the first quarter. For the same period in 2023, the segment reported a pretax loss of $83 million and adjusted pretax income attributable to the company of $6 million.

Ethanol crush margins improved year-over-year, further supported by favorable hedging positions entered during the fourth quarter. Production facilities continue to operate efficiently in the quarter with record production and lower natural gas prices. Renewable diesel feedstocks volumes continue to grow albeit with compressed margins on industry fundamentals. Feed ingredient demand was also improved; however, values declined on lower corn prices. All four plants have now completed their semi-annual maintenance shutdowns and are back to running at full capacity. The ethanol margin environment should remain favorable, especially at the eastern plants as corn basis in the east remains well below levels in the west.

Renewables had first quarter adjusted EBITDA of $32 million in 2024, compared to 2023 first quarter adjusted EBITDA of $22 million.

Nutrient & Industrial Ag Businesses Recover on Improved Volumes and Margin

The Nutrient & Industrial segment reported a pretax loss of $2 million, compared to a 2023 first quarter pretax loss of $10 million. While the first quarter is a seasonally slow period, the majority of the improvement was driven by increased volumes and margins in core agricultural product lines. Total group volumes were up 12% with an overall increase in margins. Spring application is delayed in our core geographic areas due to wet and cold weather. We expect strong demand over the next several weeks if planting conditions improved and the outlook for the second quarter remains solid.

Nutrient & Industrial's first quarter EBITDA was $7 million compared to 2023 first quarter EBITDA of $(1) million.

Income Taxes; Corporate

The company recorded income tax expense at an effective rate of 9% for the quarter due to the tax treatment of non-controlling interests. We anticipate a full-year adjusted effective rate of approximately 18% - 22%.

Conference Call

The company will host a webcast on Wednesday, May 8, 2024, at 11 a.m. Eastern Time, to discuss its performance and provide its outlook for the remainder of 2024. To access the call, please dial 888-317-6003 or 412-317-6061 (elite entry number is 6704269). It is recommended that you call 10 minutes before the conference call begins.

To access the webcast, click on the link: https://app.webinar.net/jL4XbozdKGx and submit the requested information as directed. A replay of the call can also be accessed under the heading "Investors" on the company's website at www.andersonsinc.com. 

Forward-Looking Statements

This release contains forward-looking statements. These statements involve risks and uncertainties that could cause actual results to differ materially. Without limitation, these risks include economic, weather and regulatory conditions, competition, geopolitical risk, and the risk factors set forth from time to time in the company's filings with the Securities and Exchange Commission. Although the company believes that the assumptions upon which the financial information and its forward-looking statements are based are reasonable, it can give no assurance that these assumptions will prove to be correct.

Non-GAAP Measures

This release contains non-GAAP financial measures. The company believes that pretax income (loss) attributable to the company; adjusted pretax income (loss) attributable to the company; adjusted pretax income (loss); adjusted net income attributable to the company; adjusted diluted earnings per share; earnings before interest, taxes, depreciation, and amortization (or EBITDA); adjusted EBITDA; and cash from operations before working capital changes provide additional information to investors and others about its operations, allowing an evaluation of underlying operating performance and liquidity and better period-to-period comparability. The above measures are not and should not be considered as alternatives to pretax income (loss) or income (loss) before income taxes, net income (loss), diluted earnings (loss) per share attributable to The Andersons, Inc. common shareholders and cash provided by (used in) operating activities as determined by generally accepted accounting principles. Reconciliations of the GAAP to non-GAAP measures may be found within this press release and the financial tables provided herein.

Company Description

The Andersons, Inc., named for 2024 to Forbes list of America's Most Successful Small Companies, Newsweek's list of America's Most Responsible Companies, and one of The Americas' Fastest Growing Companies by the Financial Times, is a diversified company rooted in agriculture that conducts business in the commodity merchandising, renewables, and plant nutrient sectors. Guided by its Statement of Principles, The Andersons is committed to providing extraordinary service to its customers, helping its employees improve, supporting its communities, and increasing the value of the company. For more information, please visit www.andersonsinc.com.

 

 

 

 

 

 

 

SOURCE The Andersons, Inc.

SOURCE: The Andersons, Inc.

Investor Relations Contact: Mike Hoelter, Vice President, Corporate Controller and
Investor Relations, Phone: 419-897-6715, E-mail: investorrelations@andersonsinc.com

COMTEX_452026104/2197/2024-05-07T16:05:00

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