The Andersons Inc. has announced a profitable first quarter 2019 for its ethanol group and confirmed its Element ethanol plant in Kansas is expected to be operational by the end of the year. Pat Bowe, president and CEO of The Andersons, made the announcements during a May 7 earnings call.

“The ethanol group continued to remain profitable for the quarter, making the best of a very weak margin environment during most of the quarter,” Bowe said during the call. “Difficult times like these reinforce the wisdom of our strategy in this business—operate as efficiently as possible to maximize margin from each bushel of corn we grind and effectively manage risk by using prudent hedging strategies.”

The ethanol group reported $2.6 million of pretax income for the three-month period, down from $2.6 million during the same quarter of 2018.

“The ethanol group recorded somewhat lower results driven by weaker margins, but bolstered by successful hedging and increased production efficiency that improved yields,” said Brian Valentine, senior vice president and chief financial officer at The Andersons.

Valentine also said construction is proceeding as planned on Element LLC, a 70 MMgy biorefinery in Colwich, Kansas, that is under development by The Andersons and ICM Inc.  “It will be the world’s most technologically advanced dry mill ethanol facility when it begins production, which we currently expect to happen in the early part of the third quarter,” he said.

Bowe said all four of the company’s ethanol plant continue to operate well. “We expect the Element plant to be fully operational by the end of the year and we continue to feel confident about the incremental margin improvements this plant will create,” he continued.

During the call, Bowe also discussed the outlook for the remainder of the year. “The ethanol group is off to a good start considering the continued difficult margin environment,” he said. “As we enter the quarter, the group had hedged more than 40 percent of its second quarter production at acceptable margins. While the pace of U.S. exports has been strong so far, we believe full-year 2019 exports could fall short of 2018 results without resolution of the U.S.-China trade dispute. A resolution would likely reopen Chinese imports of ethanol and DDGs. The anticipated approval in the next several weeks of year-round E15 sales should improve demand somewhat in 2019 and we believe it will become significantly more meaningful in future years.”

Overall, The Andersons reported a net loss of $14 million, or 43 cents per diluted share, and an adjusted net loss of $5.3 million, or 16 cents per diluted share.