MAUMEE, OHIO, U.S.— Net income at The Andersons, Inc. in the second quarter ended June 30 totaled $29.41 million, equal to 92¢ per share on the common stock, up 37% from $21.413 million, or 76¢ per share, in the same period a year ago.
Revenue for the second quarter was $2.325 billion, up sharply from $911.4 million in the same quarter of the previous year.
Net income for the first half of the year totaled $15.263 million, or 49¢ per share, down 21% from $19.431 million, or 70¢, in the first half of 2018. Revenue rose to $4.3 billion in the first half from $1.5 billion in 2018.
“While we are pleased with our solid second quarter results earned under difficult conditions, the ongoing impacts of the unprecedented first-half weather and the world trade difficulties now lead us to believe that our operating results will be down slightly for the full year,” Patrick E. Bowe, president and chief executive officer, said during an Aug. 7 conference call with analysts. “The Trade Group performed remarkably well last quarter in unusual conditions and the Lansing acquisition is making a strong contribution to our results.
“While we anticipate continued trading opportunities in what we think will be a volatile market well into the fourth quarter, it’s also apparent that the corn and soybean volumes available to us this year in portions of our Eastern asset footprint will be substantially lower than normal. What isn’t clear is how the late planting will impact yields, particularly in our Northwest Ohio, Southeast Michigan and Northeast Indiana dry areas.
“On a more positive note, the integration of the Lansing and Thompsons businesses continues to go well, and we believe we will meet or exceed our synergy estimates.”
The Trade Group generated a pretax income of $23.71 million in the second quarter of 2019, up from $8.7 million in the second quarter of 2018. Revenues increased to $ 1.766 billion from $365.1 million.
“The strategic rationale for acquiring Lansing was illustrated well during the quarter as the larger trading team capitalized on weather-related price volatility,” said Brian Valentine, senior vice-president and chief financial officer “In addition, sharp upward movements in both corn and wheat basis improved physical grain margins year-over-year.”
First-half pretax income for the Trade Group totaled $6.268 million, which was down from $7.46 million in the same period the previous year.
The company’s pretax income in the second quarter for its Ethanol Group was $2.172 million, down from $7.179 million in the second quarter of 2018. Ethanol’s revenue rose to $245.14 million from $201.75 million in the same period a year ago.
Ethanol Group’s first-half pretax income fell to $4.589 million, which compared with $9.953 million in 2018. Revenue increased to $453.9 million in the first half of 2019, which compared with $375.4 million in the same period as last year.
“The Ethanol Group continues to make the best of an extremely unfavorable margin environment,” Bowe said. “Low or negative crush margins prevented the group from locking in any forward margins for the third quarter. Given the current margin environment, the group plans to run its plant to optimize yield and profitability, which will reduce costs and could lower some volumes.
“The group continues to make progress on its strategic initiatives. The Denison, Iowa, U.S., plant has achieved a low carbon intensity score, and the new Element plant in Kansas will soon begin to produce low-carbon ethanol. Both plants will target the higher-margin California market. In addition, several capital projects are under way that will further improve plant efficiencies and generate a series of new, higher-value coproducts.”
Pretax income in the Rail Group totaled $3.18 million in the second quarter, up from $944,000 in the same period a year ago. Revenue totaled $43.01 million, up from $41.38 million in the same period a year ago.
“The Rail Group’s leasing income remained steady, while car sales income was negligible as planned,” Bowe said. “Fleet utilization and the number of cars on lease were both significantly higher year-over-year. The group’s repair business results were lower.”
For the first half of 2019 the Rail Group’s pretax profit totaled $7.49 million, a jump from $4.19 million in the first half in 2018. Revenue for the first half was $84.43 million, down from $91.87 million in the first half of 2018.
The Plant Nutrient Group managed through unprecedented wet weather in its geographic markets and generated pretax income of $15.9 million in the second quarter, up 5% from the pretax income of $15.1 million in the second quarter of 2018. Revenue fell to $270.5 million in the second quarter from $303.1 million in the same period a year ago.
The Plant Nutrient Group’s first-half pretax income totaled $11.97 million, down from $16.2 million in 2018. Revenue decreased to $399.1 million from $438.7 million.