MAUMEE, OHIO, U.S. — The Andersons, Inc. reported on Feb. 11 net loss attributable to the company of $13.1 million, or 46¢ per diluted share, due in part to underperformane in its Grain Group. The loss compares to net income of $109.7 million or $3.84 per diluted share in 2014.
The company reported revenues of $4.2 billion for 2015 compared to revenues of $4.5 billion in 2014. Adjusted net income attributable to the company for 2015 was $41.2 million, or $1.45 per diluted share, compared to last year’s adjusted $99.1 million, or $3.46 per diluted share. Adjusted net income attributable to The Andersons for the fourth quarter was $5 million, or 18¢ per diluted share, compared to $25.9 million, or 89¢ per diluted share in the same period of the prior year.
"We are understandably disappointed in 2015’s overall results,” said Pat Bowe, chief executive officer. “Market conditions this year in the Eastern Corn Belt coupled with underperformance in our Grain Group significantly impacted the performance of our agriculture businesses. We were pleased to see the record performance in our Rail Group and felt good that our Ethanol Group executed well in a very challenging energy environment. We remain confident in our ability to navigate tough market conditions and deliver shareholder value and growth."
The Grain Group’s income loss before tax attributable to The Andersons for the year was $9.4 million compared to a $58.1 million profit in the same period of last year. The Grain group had a $46.4 million impairment of goodwill recorded in the fourth quarter.
Excessive rains during the second quarter in the Eastern Corn Belt resulted in significantly lower crop production. This, coupled with continued grower reluctance to deliver or forward contract amidst a low price environment, reduced income from volumes put through the company’s facilities and also limited space income opportunities.
Weather conditions during the harvest were very dry, significantly reducing the historical levels of drying income recognized.
Results in the Grain Groups’ affiliates, Lansing Trade Group (LTG) and Thompsons Limited, were a combined $3.6 million in the fourth quarter and $13.3 million for the year compared to $6.8 million and $26.1 million for the same periods in the prior year.
Based on this year's underperformance and the challenging outlook for certain assets, the group took a $46.4 million charge for the impairment of goodwill. The impact of this non-cash charge has been adjusted out of on-going results for comparability with other periods.
Corn acres to be planted in 2016 are estimated to be nearly 90 million acres, which are up slightly from 2015. Soybean acres to be planted are estimated to be approximately 84 million acres, which is up approximately 2% compared to 2015. Wheat acres have been reported to be approximately 3 million acres lower this year. Assuming weather conditions are less detrimental, and crop yields return to their trending improvement levels these conditions will create a good opportunity for the Grain Group in the second half of 2016, The Andersons said.
The Ethanol Group’s earnings before tax attributable to The Andersons for the year was $28.5 million, down 72% from $92 million in the same period of last year.
The Ethanol Group delivered record production output in the fourth quarter and full year. In 2015, the company’s ethanol facilities produced 384 million gallons compared to 372 million gallons in 2014 and their nameplate capacity of 330 million gallons.
Margins of co-products were under pressure in the fourth quarter as lower international demand, particularly in China, put pressure on distillers dried grain pricing.
As previously announced, construction is under way to expand the ethanol production facility in Albion, Michigan, U.S. This expansion will double the capacity of the joint venture’s facility which currently produces approximately 65 million gallons a year. The expansion is expected to be completed in the first half of 2017.
The Rail Group’s income before tax attributable to The Andersons for the year was $50.6 million, up 61% from $31.4 million in the same period of last year. Results were supported by strong asset utilization rates throughout the year, the company said. The group's full-year results also benefited from a $10.6 million gain in the second quarter related to an early lease termination, and improving performance within the repair business. Pre-tax income in the fourth quarter was $6.8 million, compared to $5.6 million in the same period of the prior year.
As 2016 commences, railroad shipping volumes continue to feel pressure, particularly in the energy sector. The Rail Group is well positioned for the slowing rail cycle with currently high utilization rates and a highly diverse lease customer base representing a wide spectrum of industries, the company said.