Rex American Resources Inc. released second quarter financial results on Aug. 26, conforming that its majority owned ethanol plants in Gibson City, Illinois, and Marion, South Dakota, are operating and that ethanol margins have been improving.

During an earnings call, Stuart Rose, chairman of Rex, said “it looks like the worst is behind us,” when referring to the challenges faced by the ethanol industry this year. He noted the ethanol industry is currently profitable, with prices up when compared to last quarter. A good corn harvest is also expected, he said.

Zafar Rizvi, CEO of Rex, discussed the impact of COVID-19 on the company’s ethanol operations. Decreased fuel demand caused many ethanol plants to idle this spring, including Rex’s Illinois-based One Earth Energy facility and South Dakota-based NuGen Energy. Rizvi said the One Earth Energy plant resumed operations in May, with the NuGen plant starting up in June.

Rizvi said the plants have been processing a steady flow of corn in the third quarter and noted that crush margins have improved. He said the company believes the plants could experience a profitable third quarter, provided economic conditions, crush margins and the availability of corn continue to improve.

Rizvi also provided a brief update of the carbon capture and storage (CCS) project underway at the One Earth Energy facility in partnership with the University of Illinois. As previously announced, the project has received grant from the U.S. Department of Energy. To date, Rizvi said a feasibility study has been completed, seismic testing has been conducted and the company has purchased extra land for the project.

Moving forward, Rose said Rex continues to look for quality ethanol plants to acquire at reasonable prices, but stressed nothing is imminent at this this time. The company also continues to look for opportunities presented by ancillary products that can be made from ethanol or its byproducts, he continued.

Rex currently holds ownership interest in six ethanol plants, including 75.3 percent ownership interest in Gibson City, Illinois-based One Earth Energy LLC, 99.5 percent ownership interest in Marion, South Dakota-based NuGen Energy LLC, 10.3 percent ownership interest in West Burlington, Iowa-based Big River Resources West Burlington LLC, 10.3 percent ownership interest in Galva, Illinois-based Big River Resources Galva LLC, 5.7 percent ownership interest in Dyersville, Iowa-based Big River United Energy LLC, and 10.3 percent ownership interest in Boyceville, Wisconsin-based Big River Resources Boyceville LLC.

Rex reported $39.3 million in net sale and revenue for its fiscal second quarter, which ended July 31, down from $105.9 million reported for the same period of 2019. Gross profit was $600,000, compared to $6.2 million. Rex reported a second quarter loss before income taxes and non-controlling interests of $6.1 million, compared to income before income taxes and non-controlling interests of $700,000 reported for the second quarter of last year. Net loss attributable to Rex shareholders was $1.7 million, compared to net income of $2.3 million for the second quarter of last year. Basic and diluted net los per share attributable to Rex common shareholders was 28 cents, compared to net income per share of 36 cents reported for the same period of 2019.