The Andersons Reports 2Q Performance
Grain and ethanol businesses each posted significantly better year-over-year results
The Andersons has shared its second quarter results.
The company's net income of $21.5 million, or $0.76 per diluted share, is up considerably from both the net loss of $26.7 million, or ($0.94) per diluted share, and adjusted net income of $15.3 million, or $0.54 per diluted share, reported in the prior year. Second quarter 2018 reported results include noncash pretax impairment charges totaling $6.3 million. The earnings per share impact of these charges is approximately $0.17 per diluted share.
"As in the first quarter, our Grain and Ethanol businesses each posted significantly better year-over-year results, but our Plant Nutrient and Rail businesses posted lower results compared to last year," says CEO Pat Bowe. "For the seventh consecutive quarter, our Grain Group recorded improved year-over-year results."
The Grain Group: Revenues declined 25% year over year to $366 million from $488 million generated in the year-ago quarter. The segment reported an operating income of $9.9 million compared with $6.9 million recorded in the comparable quarter last year.
The Ethanol Group: Revenues jumped 7% year over year to $201 million. The segment reported an operating profit of $6.1 million, a 31% year-over-year increase from $4.7 million recorded in the year-ago quarter.
The Plant Nutrient Group: The segment reported revenues of $303 million, up around 14.5% year over year. It reported an operating profit of $15.1 million compared to a loss of $25.8 million in second-quarter 2017.
The Rail Group: Revenues in this segment went up 8.6% year over year to $41.4 million. Operating income declined significantly to $0.9 million from $5.9 million recorded in the prior-year quarter.
Andersons reported cash and cash equivalents of $58.6 million at the end of the second quarter, up from $18.9 million reported at the end of the prior-year quarter. The company's long-term debt was $436 million as of Jun 30, 2018, compared with $354 million as of Jun 30, 2017.
"For the seventh consecutive quarter, our Grain Group recorded improved year-over-year results," Bowe says. "The group's second quarter results improved by approximately $4.5 million when excluding the Tennessee asset impairment charge, and were highlighted by better results from merchandising and Lansing Trade Group. Ethanol Group results improved once again year over year due to higher volumes linked to plant optimization and improved DDG margins.
"The Plant Nutrient Group's lawn and contract manufacturing business continued to grow, but that was not enough to offset the continued squeeze in margins for both primary and specialty nutrients, which suffered from continued competitive pricing pressure," he continues. "The Rail Group's results were comparable year over year notwithstanding its decision to scrap about 600 idle cars. Utilization and total cars on lease improved sequentially and year over year, signaling a continued modest market upturn."