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Green Plains posts Q2 profit, helped by strong ethanol demand

US ethanol producer Green Plains said revenue and profits rose in the second quarter as it produced record volumes of ethanol and saw growing demand in the US and overseas.

The firm reported net income of $8.2 million (€7.35m), or 21 cents per diluted share, for the three months ending June 30, up 5.1 percent from $7.8 million, or 19 cents per diluted share, for the same period a year ago. The boost in profits came as ethanol prices rose during the quarter following some of the lowest prices in years.

"We are pleased with our performance in the second quarter of 2016, which resulted in a $50 million increase of operating income compared with the first quarter," said Todd Becker, president and CEO.

He added: "Our agribusiness and marketing and distribution segments reported strong results and the partnership segment generated its best results since going public in June of 2015. During the second quarter of 2016, we produced record ethanol volumes and with the current ethanol margin environment, we expect stronger production levels in the last half of the year."

During the second quarter, Green Plains produced 274.3 million gallons of ethanol compared with 238.7 million gallons for the same period in 2015. The consolidated ethanol crush margin was $45.3 million, or $0.17 per gallon, for the second quarter of 2016 compared with $46.5 million, or $0.20 per gallon, for the same period in 2015.

The consolidated ethanol crush margin is the ethanol production segment's operating income before depreciation and amortisation, which includes corn oil production, plus intercompany storage, transportation and other fees, net of related expenses.

Ethanol growth

Revenues were $1.6 billion for the six-month period ended June 30, 2016, compared with $1.5 billion for the same period in 2015.

The company still recorded a net loss of $15.9 million in the first half of the year, versus a $4.5-million profit a year ago.

"Ethanol demand continues to grow, supported by a 3% growth in domestic ethanol consumption and a 6% increase in US ethanol exports year-to-date," commented Becker. "We continue to execute on our core strategy of capital allocation with an intense focus on growing our company, including both organic and acquisitive opportunities."

 

 





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