Green Plains: Q4 operations impacted by weather, rail delays
February 8, 2023
BY Erin Voegele
Green Plains Inc. released fourth quarter financial results on Feb. 8, reporting that the company’s operations were impacted by high corn prices, rail embargoes, and cold weather during the three-month period. Todd Becker, CEO of Green Plains, said the company made an economic decision to temporarily idle 10 percent of its production based on current market conditions and continues to evaluate the right time to bring that capacity back online.
Becker said fourth quarter margins were improved when compared to the lows experienced in the third quarter, but noted margins continued to be weak. He said corn basis remains stubbornly high for this time of year in the Western Corn Belt at approximately 45 cents per bushel higher than the five-year average and 30 cents per bushel higher than the previous year.
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A severe cold snap in December caused outages across the Green Plains platform, according to Becker. Rail embargoes also hit the company unusually hard. As a result, Green Plains experienced inventory backup at some of its locations, causing plant slowdowns and some plants going offline for a period of time. Despite these challenges, however, Green Plains’ facilities ran at a 93 percent utilization rate during the quarter, up from 83 percent during the fourth quarter of 2021. The consolidated gross margin for the quarter was approximately 3 cents per gallon, Becker continued.
Becker also discussed ongoing improvement and product diversification projects at Green Plains’ facilities. The company completed construction of three additional MSC protein technology projects last year, bringing the total to five. All five MSC facilities are now operational and producing ultra high protein, Becker said. Green Plains also plans to add MSC technology to its facilities in Madison, Illinois, and Fairmont, Minnesota, locations.
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Green Plains also broke ground on its first clean sugar facility last year. That project, located in Shenandoah, Iowa, is expected to have the capacity to produce 200 million pounds of dextrose annually. The facility could later expand capacity to 500 million pounds per year.
Green Plains reported a net loss attributable to the company of $38.6 million for the four quarter, or a 66 cent loss per basic and diluted share. For the same period of 2021, Green Plains reported a net loss attributable to the company of $9.6 million, or 18 cents, per basic and diluted share. Revenues for the fourth quarter reached $914 million, compared to $802.3 million reported for the same quarter of 2021.EBITDA was $5.7 million, compared to $30.3 million.
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