Rex American Resources Inc. released fiscal fourth quarter financial results on March 23, reporting a profitable three-month period. During an earnings call, company officials discussed plans to increase ethanol production capacity and reported progress with a carbon capture and storage (CCS) project.

Doug Bruggeman, chief financial officer of Rex, said fourth quarter 2022 sales were down 5.6 percent when compared to the same period of 2021. Ethanol sales were based on 63.7 million gallons, down from 69.9 million gallons during the fourth quarter of 2021. He attributed the reduction to weather-related disruptions.

Gross profit was $14.9 million, down from $38.8 million. Bruggeman attributed the decline to lower ethanol pricing, a 22 percent increase in corn pricing and a 12 percent increase in natural gas prices. The NuGen Energy LLC plant, located in Marion, South Dakota, experienced particularly high  corn pricing due to a poor corn harvest and reduced corn availability in the region, he said.

Moving into the first fiscal quarter of 2023, which began Feb. 1, Rex Executive Chairman Stuart Rose said ethanol production is running at “roughly breakeven.” Zafar Rizvi, CEO of Rex, said natural gas prices have dropped considerably in recent weeks, but high corn prices are persisting.

Rizvi also briefly discussed the CCS project under development at the One Earth Energy plant in Illinois in partnership with the University of Illinois. He indicated that testing done to date shows that the location is a good target for carbon sequestration. The design of the compressor facility is complete, the contract to build the compressor has been signed, and the long-lead-time equipment has been ordered, he said. A class VI permit to store 90 million tons of carbon dioxide has been submitted to the U.S. EPA. Rizvi said work on the pipeline FEED studies is expected to be finished soon. The company currently expects a prebuilt modular plant will be delivered by the end of the year, he added.

In addition to the CCS project, Rex plans to boost production capacity at One Earth Energy from 150 MMgy to 175 MMgy. Rizvi said additional details on the expansion plans will likely be discussed during the company’s second quarter earnings call in June.

Rex currently holds ownership interest in six ethanol plants, including 75.8 percent ownership interest in Gibson City, Illinois-based One Earth Energy LLC and a 99.7 percent ownership interest in Marion, South Dakota-based NuGen Energy LLC. The company also holds 10.3 percent ownership interest in Waste Burlington, Iowa-based Big River Resources West Burlington LLC; a 10.93 percent ownership interest in Galva, Illinois-based Big River Resources Galva LLC; a 5.7 percent ownership interest in Dyersville, Iowa-based Big River United Energy LLC; and a 10.3 percent ownership interest in Boyceville, Wisconsin-based Big River Resources Boyceville LLC.

Rex reported fourth quarter net sales and revenues of $200.2 million, compared with $212 million during the same period of 2021. Gross profit was $14.9 million, down from $38.8 million. Net income attributable to Rex shareholders from continuing operations was $8.2 million for the fourth quarter, compared to $21.3 million during the same quarter of 2021. Basic and diluted net income per share attributable to rex common shareholders from continuing operations was 47 cents, comparted to $1.19.