MAUMEE, OHIO, U.S. — The Andersons, Inc. reported on Aug. 5 that earnings for the second quarter were $31,092,000 or $1.09 per share, down 29.8% from $44,301,000 or $1.56 per share in the same quarter of last year.
The Grain Group’s earnings this quarter were $3,149,000, down from $10,355,000 in the same quarter of last year. The results were impacted by lower margins and volume, which resulted primarily from lower than expected movement of grain off farm and lower forward contracting activity.
The Ethanol Group’s earnings this quarter were $9,667,000, down from $33,904,000 in the same quarter of last year. The group executed well operationally and achieved record second quarter ethanol production volumes, the company said. Strong results from the sale of co-products were also seen.
"The rail group's focus on asset management and operational performance helped produce a great quarter. The Ethanol Group had strong results as well, due primarily to an improvement in margins. The ethanol team also continued to benefit from investments made in technology and process improvement," said Mike Anderson, chief executive officer (CEO).
"The weather, however, did not cooperate in some of our markets, which led to decreased profitability in our Plant Nutrient Group. Extremely wet weather the last half of the second quarter impaired the normal application of crop nutrients in the Eastern cornbelt. We expect to return to normal nutrient volumes in the fall. Our results this quarter once again demonstrate the value of having a diversified portfolio of businesses. The most recent addition to our portfolio, Kay Flo, has already added new markets, customers and product lines to the company. Additionally, significant cross selling opportunities and synergies have been identified that will pay dividends in 2016 and beyond."
The wet weather slightly reduced the likely size of fall crops of corn and beans, and degraded wheat quality in some of the company’s draw territory. Anderson said the company will continue to look for other income opportunities resulting from market volatility to somewhat offset this lower volume.
The company said demand for ethanol is expected to remain strong as lower gasoline prices support base demand for gasoline. The Ethanol Group said it believes export demand will support margins into the fall when domestic gasoline demand falls off.
Barring further unusual weather, the Plant Nutrient Group said it should have a typical second half of the year. Significant volume improvement should be seen in 2016, as farmers address their soil nutrient demands created by an abnormally wet spring. The company said the benefits from the Kay Flo acquisition should also begin to be seen in 2016. The Rail Group is expected to deliver another great year, the company said.
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