Release Date: May 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- The Renewables segment had an outstanding first quarter with improved yields and solid margins from ethanol production.
- Agronomy business experienced increased volumes and margins, benefiting from a strong start to the planting season.
- Cash flow from operations before changes in working capital increased by more than $8 million from the previous year.
- The company maintains a strong balance sheet with significant capacity to support growth investments.
- Andersons Inc (ANDE, Financial) is actively pursuing growth projects and acquisition opportunities, including improvements at the Port of Houston to support soybean meal exports.
Negative Points
- Agribusiness segment faced challenges due to global trade uncertainty, resulting in a pre-tax loss attributable to the company.
- Revenues declined slightly due to overall lower commodity prices.
- The threat of tariffs and additional port fees negatively impacted commodity markets, leading to stagnant conditions.
- Feed values were lower year-over-year, impacting the Renewables segment despite strong ethanol margins.
- Skyland acquisition faced a tough first quarter with only slightly positive EBITDA, leaning towards the lower end of expected annual run rate.
Q & A Highlights
Q: Can you provide insights on the expected performance of the Fertilizer business in the second quarter compared to the last two years?
A: William Krueger, President and CEO, noted that the planting season has started well, with increased corn acres and a solid plan with suppliers. The addition of Skyland farm centers has expanded their geographic reach, enhancing opportunities in the Fertilizer and Nutrient business compared to last year.
Q: What factors are causing the Eastern Corn Belt to have a higher corn basis compared to the Western Belt this year?
A: William Krueger explained that reduced demand in the Western Corn Belt, due to fewer sorghum and wheat exports and a drop in cattle feed numbers, has led to more grain competing for demand. Additionally, freight availability has been easier in the West, contributing to the basis difference.
Q: How is the renewable diesel feedstock trading desk performing, and what is the outlook for the rest of the year?
A: William Krueger mentioned that there is increased activity ahead of the expected RVO announcement. While visibility is similar to others in the industry, there is optimism about positive results for renewable diesel processing plants, with more information expected by the end of May.
Q: How has the Skyland acquisition performed relative to expectations, and what is the expected EBITDA contribution?
A: William Krueger stated that while the first quarter was challenging due to market conditions, the integration of Skyland is progressing well, with positive long-term synergies. Brian Valentine, CFO, added that the first quarter EBITDA was slightly positive, and the full-year expectation remains in the $30 million to $40 million range, leaning towards the lower end.
Q: What is the outlook for ethanol exports to Canada, and is the current momentum expected to continue throughout the year?
A: William Krueger observed that the strong Q1 exports might be a pull forward, with expectations for the year to be similar to last year's 1.9 billion gallons. While tariffs remain a variable, exports are expected to keep pace with last year in Q2.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
