Green Plains announces higher Q2 revenues, shift to loss as ethanol margins tighten

In Nebraska,  Green Plains Renewable Energy announced a net loss for the second quarter of  $7.6 million, or $0.25 per diluted share, compared to net income of $5.0 million, or $0.14 per diluted share, for the same period in 2011. Revenues were $870.4 million for the second quarter of 2012 compared to $861.6 million for the same period in 2011.

“We have positioned Green Plains with a strong balance sheet to provide sustainability through cyclical downturns such as the one we are currently experiencing. While the tight margin environment has continued, our strategy to pursue growth opportunities that continue to de-risk the ethanol segment remains intact,” stated Todd Becker, President and Chief Executive Officer. “Our non-ethanol businesses continue to diversify our cash flows, allowing us to meet our debt service obligations largely from operations. During the quarter, we repaid over $60 million in term and revolving debt, while maintaining a strong liquidity position with $137 million in total cash and equivalents at quarter-end.”

“While the third quarter remains defensive, based on the current forward curve and the hedges in place, we expect to return to profitability in the fourth quarter. We have locked in over 40% of our ethanol margins for the fourth quarter at profitable levels. The industry has slowed production to the lowest levels we have seen in a year with tighter inventory levels beginning to become apparent in the marketplace,” said Becker.

Revenues for the six-month period ended June 30, 2012 were $1.6 billion compared to $1.7 billion for the same period of 2011. Net loss attributable to Green Plains for the six-month period ended June 30, 2012 was ($20.2) million, or ($0.65) per diluted share, compared to net income of $12.7 million, or $0.34 per diluted share, for the same period of 2011.

“Our non-ethanol segments made significant contributions to the quarter, generating $14.6 million of operating income, which puts us on track to produce approximately $60 million in operating income from our corn oil production, agribusiness and marketing and distribution segments in 2012,” added Becker. “We continue to expand our railcar program with over 500 tanker cars in service to transport other commodities. The combination of our risk management programs, operating efficiencies, diversification strategy and strong liquidity position has softened the blow of a longer than expected cyclical downturn.”

Second quarter 2012 EBITDA, which is defined as earnings before interest, income taxes, noncontrolling interests, depreciation and amortization, was $11.4 million compared to $29.8 million for the same period of 2011. Green Plains had $136.8 million total cash and equivalents and $161.6 million available under committed loan agreements at subsidiaries (subject to satisfaction of specified lending conditions and covenants) at June 30, 2012. For reconciliations of EBITDA to net income attributable to Green Plains, see “EBITDA” below.

Second Quarter 2012 Business Highlights

• In June 2012, BioProcess Algae LLC and a subsidiary of Bioseutica BV, a leading producer of highly-purified pharmaceutical-grade Omega-3 fatty acids, announced that they have entered into a commercial supply agreement for the production of EPA-rich Omega-3 oils for use in concentrated EPA products for nutritional and/or pharmaceutical applications. Under the agreement, BioProcess Algae will supply microalgal oils which will be refined by Bioseutica’s proprietary Supercritical Fluid Technology (KD-pur®) to produce highly-concentrated vegetable-sourced EPA oils.

• In June 2012, the EPA gave final approval for the sale and use of E15 ethanol blends in light duty vehicles made since 2001, representing nearly two-thirds of all vehicles on the road. The nation’s first E15 blends were sold on July 18, 2012 at a retail station in Lawrence, Kansas.