The Andersons Inc. reported solid results for the second quarter with net income of $31.1 million, or $1.09 per diluted shared. That compares with Q2 revenues last year of $1.2 billion. Last year’s Q2 net income was $44.3 million, or $1.56 per diluted share.
Net income before taxes for the ethanol group was $9.7 million for Q2. That compares with $33.4 million in the same period last year for ethanol. “Ethanol went down,” CEO Mike Anderson noted in the investor call, “not because ethanol is bad, but because last year was so good.”
“The ethanol group executed well operationally and achieved record second quarter ethanol production volumes,” the company said in its earnings release. “Strong results from the sale of coproducts were also seen.” The company expects ethanol demand to remain strong as lower gasoline prices continue to support gasoline demand. Routine fall maintenance shutdowns should help keep ethanol supply in balance, and export demand should support margins into the fall when domestic gasoline demand falls off.
Margins improved in Q2 from near breakeven levels in the first quarter, investors were told during the call, rising to more robust levels in May before falling off through June as corn prices temporarily surged. “Margins are a bit weaker today but as we look to the second half we see signs for optimism in relatively low corn costs, continued good export and domestic demand and supply levels that should begin to soften as the industry goes through normal maintenance downtime in late August and September.”