Green Plains (GPRE) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenues declined 27.8% year-over-year to $618.8 million, mainly due to lower selling prices for ethanol, distillers grains, and corn oil, but net loss narrowed to $24.4 million (EPS $(0.38)), and EBITDA improved to $4.8 million, driven by record renewable corn oil and Ultra-High Protein yields and higher plant utilization rates.

• Strategic initiatives advanced, including the startup of the Tharaldson JV for high-protein production, commissioning of the Clean Sugar Technology project in Shenandoah, and the world's largest MSC system in North Dakota.

• Entered a definitive agreement to sell the Birmingham terminal to retire high-priced partnership debt and streamline operations, with proceeds to repay term loan.

• Strategic review ongoing, with Bank of America and Vinson & Elkins LLP engaged as advisors to explore options for enhancing shareholder value.

Financial highlights

• Q2 2024 revenues were $618.8 million, down from $857.6 million in Q2 2023; net loss attributable to the company was $24.4 million (EPS $(0.38)), improved from $52.6 million loss (EPS $(0.89)) in Q2 2023.

• Q2 2024 EBITDA was $4.8 million, up from -$15 million in Q2 2023; consolidated ethanol crush margin rose to $22.7 million from $4.6 million.

• Gross margin for Q2 2024 was $37.8 million, up from $15.5 million in Q2 2023; operating loss narrowed to $17.7 million from $42.5 million.

• Cash and cash equivalents at quarter-end were $225.1 million, with $219.6 million available under a committed credit facility; total debt was $610.2 million.

• Book value per share was $13.42 at June 30, 2024.

Outlook and guidance

• Margins for Q3 are expected in the high 20s to high 30s cents per gallon, with Q4 margins also strengthening; strong EBITDA outlook for Q3 and H2 2024, supported by improved corn oil pricing and Ultra-High Protein demand.

• Utilization rates are anticipated to remain in the mid-90% range for the rest of 2024.

• CapEx for 2024 is projected at $90–$110 million, excluding $110 million for carbon capture equipment, which is fully financed.

• The company expects to return to profitability in Q3 2024, driven by strong market fundamentals and operational improvements.

• 'Advantage Nebraska' carbon capture strategy on track for a second half 2025 start, with equipment ordered and construction to begin soon.