The Andersons Inc. on Feb. 18 released fourth quarter financial results, reporting record high ethanol production for both the three-month period and full year 2024. Ethanol earnings were down on lower margins.
Fourth quarter results for renewables were down from the prior year record, as ethanol board crush margins were down 16 cents per gallon and coproduct values traded lower on reduced corn prices and weaker corn oil values. Partially offsetting those headwinds, The Andersons said its ethanol plants continued to run efficiently with record fourth quarter production and reduced input cost, including lower corn basis of 9 cents per gallon year-over-year. Third-party ethanol merchandising also saw improved profitability in 2024.
While spot ethanol crush margins are generally seasonally soft in the first quarter, a portion of first quarter volumes have been hedged at favorable levels. While there remains regulatory uncertainty, elevated export demand, upcoming planned maintenance in the industry, and the spring driving rebound should all support improved plant economics. Co-product values may also see improvement as there has been a recent rebound in corn values.
The company’s renewable’s segment reported pretax income of $25 million and pretax income attributable to the company of $16 million in the fourth quarter, compared to $60 million and $33 million, respectively, during the same period of 2023. Renewables record EBITDA of $40 million in the fourth quarter, down from $73 million during the same period of 2023. For the full year, adjusted EBITDA was $189 million, down from $230 million in 2023.
The Andersons also briefly addressed tax benefits it has realized due to cellulosic ethanol production. The company said it recorded income tax expense at an effective rate of 20% for the fourth quarter and 15% for the year. This rate was impacted by the tax treatment of noncontrolling interests and federal tax credits; a significant portion are biofuel tax credits related to the production of cellulosic ethanol.
During a fourth quarter earnings call held Feb. 19, The Andersons President and CEO Bill Krueger said the company is actively pursuing investments aimed at reducing the carbon intensity of its ethanol, including initiatives related to carbon capture and storage (CCS) and improved plant efficiency through the implementation of additional combined-heat-and-power (CHP) projects. In addition, Krueger said The Andersons is diligently evaluating the acquisition of additional ethanol plants that align with its criteria.
Overall, the Andersons generated $269 million and $251 million in cash from operating activities for the fourth quarters of 2024 and 2023, respectively, and generated $100 million and $122 million in cash from operations before working capital changes for the same periods, respectively.
For the full years of 2024 and 2023, the company generated $332 million and $947 million in cash from operating activities, respectively. Cash from operations before working capital changes for the same years was $323 million and $330 million even with the changing ag markets.
