The following is a summary of the The Andersons, Inc. (ANDE) Q3 2024 Earnings Call Transcript:

Financial Performance:

• The Andersons reported net income of $27 million or $0.80 per diluted share, and adjusted net income of $25 million or $0.72 per diluted share in Q3 2024.

• This compares to a net income of $10 million, or $0.28 per diluted share, and adjusted net income of $5 million, or $0.13 per diluted share in Q3 2023.

• Revenue declined due to lower commodity prices, while gross profit improved by 12%, largely due to higher ethanol margins.

• Adjusted pre-tax earnings were $35 million for the quarter, up from $10 million in 2023.

• Adjusted EBITDA for Q3 2024 reached a record of $97 million, compared to $70 million in 2023.

• Cash flows from operations before changes in working capital amounted to $86 million, up over $36 million from 2023.

Business Progress:

• The Andersons completed a $70 million investment in leased facilities at the Port of Houston and announced an $85 million acquisition of an ownership interest in Skyland Grain, LLC.

• The company is also making significant capital investments, expected to reach $150 million for the year, to improve efficiency and add capacity at existing plants, including in the ethanol and nutrient businesses.

• The company's Trade business reported third quarter pre-tax income of $26 million, driven by return of carries in the market primarily in corn and wheat, and strong farmer engagement.

• The Renewables segment continued to perform well, with pre-tax income attributable to the company of $28 million due to favorable ethanol margins and lower corn bases.

Opportunities:

• The Andersons anticipates more efficient grain operations and new opportunities to enter the export markets for soybean meal from the Texas Gulf, stemming from their investment in Houston.

• Expectations of average annual EBITDA contributions of $30 million to $40 million from the Skyland Grain acquisition, especially beneficial given its doubled size of retail farm centers.

Risks:

• Ethanol prices and volumes are susceptible to market cycles and regulatory changes. While demand increases, the business acknowledges the need for strategic adaptations to lower carbon intensity in ethanol production, which involves potential operational and financial challenges.

• The trade business and overall agriculture sector are exposed to commodity price fluctuations and volatile market conditions, impacting profitability and operational efficiency.

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