MAUMEE, OHIO, US — With record-setting quarterly results in its renewables business, The Andersons ended 2023 with adjusted earnings before income, tax, depreciation and amortization just behind last year’s record.

The company posted annual adjusted EBITDA of $405 million, well above its anticipated range of $350 million to $370 million.

“We anticipated a greater year-over-year reduction from 2022, but we were able to make up some of the shortfall to our operating performance in a strong margin environment,” said Patrick Bowe, president and chief executive officer, in a Feb. 21 earnings conference call.

Adjusted pretax income of $159 million was the company’s second-best year ever.

For the fourth quarter ended Dec. 31, 2023, adjusted EBITDA was $135.1 million, up from $103.7 million in the same period a year earlier.

The renewables segment had fourth-quarter EBITDA of $73 million, more than double compared to $36 million in 2022, said Brian Valentine, executive vice president and chief financial officer, during the call. For the full year, renewables generated adjusted EBITDA of $230 million in 2023, up $50 million compared with $180 million in 2022.

“Outstanding operating performance at its four ethanol plants resulted in record ethanol production and improved yields in a strong crush margin environment, improved renewable diesel feedstock and feed ingredient merchandising volumes also added to earnings,” Valentine said, adding that sales of renewable diesel feedstocks increased 60% compared to 2022.

Trade’s adjusted EBITDA for the quarter was $62 million compared with adjusted EBITDA of $72 million in the fourth quarter of 2022. Adjusted EBITDA for the full year was $155 million in 2023 compared with $199 million in 2022.

Grain assets had a good fourth quarter, with strong elevation margins and drying income from wet corn, Valentine said. Merchandising had solid results with a mix of market challenges and opportunities across commodities and geographies, he added.

Challenges include ongoing geopolitical challenges and general weakness in the Middle East and north Africa, he said.

The nutrient and industrial business recorded EBITDA of $62 million, a decline of $11 million from 2022’s record performance.

Agriculture product sales volume increased approximately 3% in the quarter while manufactured products continued to see lower demand in the contract manufacturing business, Valentine said.

Looking ahead, Bowe said the company is optimistic about its growth perspectives but acknowledged a shift in the ag fundamentals as global supply has replenished the low stocks of the last few years.

“We’ve made investments in our core assets as well as successfully completing several small bolt-on acquisitions in key product lines,” he said. “We’ve also grown organically through new merchandising tests, focusing on new commodities and geographies.”

Bowe said teams are prepared to meet the new fundamentals by leveraging the company’s balanced portfolio and merchandising product lines.

The company continues to make investments in its ethanol facilities to improve efficiency and reliability as well as improve the quality and yield of distillers corn oil, a low carbon intensive input for the renewable diesel industry, he said.

The Andersons expects to continue to grow its renewable diesel feedstock merchandising through offtake and supply agreements with third parties, Bowe said.