MAUMEE, OHIO, US — The Andersons, Inc., on May 7 reported net income attributable to the company of $6 million, equal to 16¢ per share on the common stock, in the first quarter ended March 31, far exceeding analysts’ expectations of $2 million and significantly higher than the same quarter in 2023, when it lost $15 million.

However, the company posted revenue of $2.7 billion, short of the anticipated $3.4 billion, while EBITDA was $51 million, slightly lower than last year’s first quarter total of $55 million.

“Overall, our first-quarter results were fairly comparable to last year’s first quarter,” said Pat Bowe, president of The Andersons. “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.”

The Renewables segment posted 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 had 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, the company said, noting that 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, the company said.

“All four plants have now completed their semi-annual maintenance shutdowns and are back to running at full capacity,” the company said. “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.

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

The company said the Trade segment’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 has 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.”

The Nutrient & Industrial segment reported a pretax loss of $2 million, compared with a 2023 first-quarter pretax loss of $10 million. The company said most 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,” the company said. “We expect strong demand over the next several weeks if planting conditions improve and the outlook for the second quarter remains solid.”

Nutrient & Industrial’s first-quarter EBITDA was $7 million, which compared with a loss of $1 million a year ago.

“We are actively pursuing opportunities for growth across our businesses,” Bowe said. “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. 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.”

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 charges 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.

“Our businesses continue to generate strong cash flows,” said Brian Valentine, executive vice president and chief financial officer of The Andersons. “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.”