Rex American Resources Inc. on Aug. 30 announced sales were down during its fiscal second quarter, the three months ending July 31. During an earnings call, company officials discussed planned capacity expansion and carbon capture and storage (CCS) projects. 

Douglas Bruggeman, chief financial officer at Rex, said sales for the second quarter were down 11.8 percent. Net sales and revenue for the quarter were $212 million, compared to $240.3 million during the same period of last year. The decline is attributed to a reduction in the volume of ethanol sold as well as lower prices for ethanol, dried and modified distillers grains and corn oil. Bruggeman said sales for the quarter were based on 69.1 million gallons, compared to 71.4 million gallons sold during the fiscal second quarter of last year. 

Gross profit for the second quarter was $18.4 million, up 30.1 percent when compared to the $14.1 million reported for the same period of 2022. Bruggeman attributed the improvement to lower corn and natural gas pricing. 

Net income attributable to Rex shareholders was $9.1 million, down from$11.2 million. Basic and diluted net income per share attributable to Rex common shareholders was 52 cents, compared to 63 cents per during the second quarter of last year. 

Zafar Rizvi, CEO of Rex, discussed plans to increase capacity at the company’s One Earth Energy LLC ethanol plant in Gibson City, Illinois. Current capacity at that facility is 150 MMgy. The company plans to boost capacity to 200 MMgy, and has secured an initial permit from the U.S. EPA that will allow production to increase to 175 MMgy. Once that level of production is achieved, Rizvi said the company can apply for a second permit to boost production to 200 MMgy. 

Rizvi also discussed several ongoing CCS projects, including one under development at the One Earth Energy plant in partnership with the University of Illinois. According to Rizvi, the contracts to build the capture and compression facilities have been signed and long-lead items have been ordered. Construction is expected to begin in mid-September, he added, with modular compression equipment for the facility scheduled to be delivered by February 2024. Rizvi said the company continues to complete work to secure a Class VI permit from the EPA and other necessary permits, but noted he could not predict a timeline for securing the necessary permits. 

In addition to the CCS project under development at One Earth Energy, other plants the company holds ownership in also plan to implement CCS projects. The NuGen Energy LLC facility in Marion, South Dakota, has signed on to the project under development by Summit Carbon Solutions while Big River Resources has entered an agreement to participate in the CCS project under development by Navigator CO2.

Rex currently holds ownership interest in six ethanol plants. The company is the majority owner of Gibson City, Illinois-based One Earth Energy LLC and Marion, South Dakota-based NuGen Energy LLC. The company also holds a minority ownership interest in West Burlington, Iowa-based Big River Resources West Burlington LLC; Galva, Illinois-based Big River Resources Galva LLC; Dyersville, Iowa-based Big River United Energy LLC; Boyceville, Wisconsin-based Big River Resources Boyceville LLC.