USA – The Andersons, Inc., a leading agribusiness company, reported a significant decline in its second-quarter adjusted net income for 2024, marking a 24% drop compared to the same period in 2023.

For the second quarter of 2024, The Andersons posted a net income of US$36 million, translating to US$1.06 per share on common stock. The adjusted net income stood at US$39 million, or US$1.15 per share.

This represents a steep decline from the previous year’s adjusted net income of US$51 million, or US$1.52 per share. Adjusted EBITDA also fell sharply to US$98 million from US$148.7 million in the second quarter of 2023.

The company experienced notable declines in adjusted pre-tax income across several segments. The Renewables segment saw a decrease from US$32.4 million to US$22.7 million, while the Nutrient & Industrial segment’s pre-tax income dropped from US$42.6 million toUS $23.4 million.

Conversely, the Trade segment reported a year-on-year pre-tax income increase from US$7.2 million to US$9.5 million.

Pat Bowe, Chairman and Chief Executive Officer of The Andersons, commented on the results, stating,

“Overall, our second-quarter results were consistent with our expectations, given the shift in ag markets over the past several months. Renewables had an excellent quarter with increased ethanol production and higher margins but didn’t match last year’s results on declining co-product values.”

He added that trade results were slightly improved from last year despite lower prices and volatility.

“With the majority of fertilizer applications occurring in the second quarter, Nutrient & Industrial had solid results although well behind last year’s outsized performance given weather-related delays and lower margins.”

Bowe noted that farmer selling remains relatively quiet with adequate supply in this low-price commodity environment. We are seeing the benefits of our portfolio mix with grain assets and our growing premium ingredients business helping to offset a reduction in merchandising opportunities.

In its Trade segment, The Andersons reported better results from its grain assets due to improved wheat storage income in the eastern grain belt.

The segment’s premium food and feed ingredients business also improved year over year, driven by the acquisition of ACJ International in July 2023 and other recent growth investments. However, the merchandising business, while profitable, fell short of 2023 levels.

The Renewables segment saw improved margins on ethanol production, thanks to a lower corn basis in the east. The company’s production facilities operated efficiently with increased volume and higher ethanol yields, though plant co-product values, particularly feed ingredients, were lower due to a reduction in corn prices.

 Feed ingredient demand, however, improved compared to the previous year.

The Nutrient & Industrial segment faced challenges due to a late and wet spring application season and declining nutrient prices, which did not provide the strong margin opportunities seen in prior years.

Additionally, a significant income shift from the first quarter to the second quarter in 2023 impacted year-over-year comparisons.

Looking ahead, Bowe emphasized the company’s commitment to growth, noting, “In early June, we announced plans to acquire an ownership interest in Skyland Grain LLC, which holds a large grain and agronomy footprint across Kansas, Eastern Colorado, and the Texas and Oklahoma panhandles.

“We are devoting significant resources to this opportunity and expect to provide an update later in the third quarter. Our longer-term Renewables projects are progressing, focusing on lowering our ethanol plants’ carbon intensity. We continue to manage a robust pipeline with meaningful growth opportunities in each business.”

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