Green Plains sees negative Q2 but remains upbeat about how 2023 will play out
It released financial results for the second quarter of 2023 on Friday, August 4, reporting how net loss attributable to the company was $52.6m, or ($0.89) per diluted share, compared to net income attributable of $46.4m, or $0.73 per diluted share, for the same period in 2022.
“The quarter was negatively impacted by unfortunate events that operationally have now been rectified, and our system is once again operating near full capacity in order to take advantage of solid fundamentals for the last half of 2023 across all of our products, when we expect to show the financial capability of the first stage of our transformation,” said Green Plains CEO, Todd Becker.
The company’s Wood River, Nebraska plant was down most of the quarter, due to an explosion in April that caused the death of one employee. The blast occurred during routine maintenance on a whole stillage tank. Insurance proceeds are expected to partially offset the loss resulting from the incident, said the firm.
Green Plains also experienced planned and unplanned downtime at many of its largest facilities that also negatively impacted the quarter, according to the CEO.
“We acted in the second quarter to prepare our assets for a solid last half of the year where we expect to now be able to avoid fall shutdowns at several of our large locations. In recent weeks, our entire platform has been operating near capacity, with Ultra-High Protein production once again achieving rates above 900 tons per day.
“Fundamentals for our strategy have improved across our platform in all four pillars – protein, oil, sugar, and carbon. Driving demand remains robust, protein margins have expanded, and renewable corn oil prices have improved. With the current margin structure and higher anticipated operational rates, EBITDA for the last half of 2023 is projected to be materially stronger,” stressed Becker.
The company, he continued, is in significant late-stage negotiations in relation to its first commercial quantities of 60% protein with deliveries of that ingredient expected in the fourth quarter.
Shareholder concerns
Meanwhile, Ancora, a shareholder in Green Plains, is calling for Becker to be replaced as its chief executive, alleging misconduct and failings by the CEO in a letter to the company’s Board of Directors, which was released yesterday.
Ancora, which has a nearly 7% stake in the Omaha, Nebraska headquartered company, also referenced its previously undisclosed July 11 letter to the board of Green Plains, which raised concerns about Becker’s "curiously timed stock sales" along with his operational and safety acumen and leadership style.
A spokesperson for Green Plains told us it had "no comment at this time" in relation to the shareholder's claims.
