GPRE - Earnings call transcript Q4 2018

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Operator

Good morning. And welcome to the Green Plains Inc. and Green Plains Partners' Fourth Quarter and Full Year 2018 Results.

Following the Company’s prepared remarks, instructions will be provided for Q&A. At this time, all participants are in listen-only mode. the to turn Stark. host, now will conference your over Jim I

Jim Stark

Earnings and today's you, Green and Quarter Partners XXXX the Welcome Chief and Participants Inc. Year our Presentations websites. page Investor under Thank Officer. Events to and Plains Executive Chief There Plains presentation Officer, corporate a Carmen. slide the John and Becker, are presentation call you on on Todd and Green Full Call. President on Fourth Neppl, link both available can Financial is find this the

Securities releases could predictions, making current During other press discussed factors Risk future. statements the Form or we sections uncertainties. that morning's this during These materially the will this this and duty to do in results the made and to reports and any expectations filings Exchange call, XX-Q, forward-looking and conference differ be forward-looking Form update statements, in about call because subject the statement. not undertake on of and which XX-K, and Commission. are and are projections, any of statements assumptions our based We are risks Factor comments other Actual with

Todd Now, turn call I Becker. the would over like to to

Todd Becker

$XXX the after Loan the almost the of vinegar year for company to and for Thanks, or quarter income million We were today. our of positively generated paid the quarter ended and $X.XX November. sale and $XXX fourth the joining and $XX.X million fourth bank B. eliminate results the plants The completed the per morning Jim, EBITDA impacted of and in We by good Term company million $XXX thanks approximately million, call gain with three quarter. the our reported net end diluted on in ethanol the share,

period our volatile during of a financial company put earnings. on the have a solid of actions All footing

have do, outline stalwart one There this We able goals who program to and occurred to steps had these being who been a credit supporters. I the plan, still will optimization shareholders, that during were period execute items is more While of QX. is of success to employees, portfolio the during previously time time deliver our our during outlined this several as call. which consistently

million First, $X.X asset we Loan costs that resulting had Term million a in expenses force of B on done payoff. of debt a deferred severance a write-off in the and sales, $XXX the result December, gain the million was of reduction $XX.X from issuance

in Plains do will crush have month's we not be realize we As a done is year week's next The which margin. in portfolio the ethanol approximately gallons when to Green the the look per margin of our $X.XX consolidated value produced and negative past in crush willing next lowest gallon the future, history. our or in is willing experienced million will past to XX XXX the in QX, quarter. have we was market for

and plant of production was a the result environment. poor the plants Our impacted ethanol of sales, as temporary closure permanent level idling Virginia, of Hopewell, the margin the by

when quarter, plant have million fourth XXX you been the dispositions, for capacity gallons. adjust ethanol total Our for would

we rate run and QX. at Canada, Brazil. exported gallons India, or quarter our reduced of gallons were is annual new Our top XX production approximately X.XXX XXX% million capacity. The We XX% destinations the to billion for in shipped

the inventory of showed of our our billion unit hours lots. Plains and XX of the volumes also was with which billion Winter Through distillers now by six for cattle great the EBITDA own facility. we in the well and million the approximately sale production for to of lower million in EBITDA XX% $X.X November. and the quarter. Currently, impacted and lower shipments business margins with the optimistic were combined XXX,XXX different which in and continued for year. year. feeding business shorter exported volumes of can for head gallons in turn record ingredient a anticipate fourth up XX% head in of can XX different For exported the of the QX. optimization, and the from billion the not exports on $XX lower of adjusted head, platform. and at feeding which the China. should head segment total of this $XX.X EBITDA $XX very the XXX,XXX up XXXX, which cattle to averaged Currently, of we this $XX reported be any Because reported grains Beaumont ethanol million from feed will to in of for Fleischmann's expansion period for to owned we continue for year. the to Bartlett two The reported averaged performance XXXX on a $X.X gallons. factors, we three anticipate sale X.XX per business cattle for XXXX EBITDA in top XXX XXXX set industry. U.S. We quarters. this totaled capabilities we times unload exported margins X.X we gallons opportunities months on range equal is for our venture are XX performance is through any today. and believe yard does and in X.X December, This in by to food of cattle. Bartlett for feed the the coverage was six cattle time start-up for exports in and gallons, of negatively QX, by the our X.X million include of year. Green Partners ethanol yards X.X the countries million generate plants agri first quarter energy of production, to we ethanol EBITDA ethanol to end fourth and around of $XX.XX of EBITDA as weather transaction. and ratio per times specifications, a $XX.X de-bottlenecking terminal. $XX.XX coverage and in $XX look year times or the million sold per million billion EBITDA two two We flow approximately joint can those the We of these head in trains quarter. acquired X.XX for last the the This this segment We We the for XXXX market the segment's We gallons remain we cattle impacted had all gallons and margins segment quarter result ratio the segment the range our capacity the the Almost four Vinegar impacted exports of shipped ethanol for Company per a plants With sale

now We protein of B have We we plan debt, transactions, indicated our unfortunately, accomplished for will technologies, fourth for sheet to improve we assets million over stock. to working paid during not things earlier, is stock completed absolutely quarter balance also which and and off-balance earlier. indicated proceeds, off believe value, debt including As value $XXX sales gross buying Term debt transactions reflected of back generated four as it structure. assets in off of capital a simplify reduce up capital, We look controllable improved term sales of optimization in two portfolio paying free business XXXX, potential our I with expenses, investing the selling number further our the and Loan in asset separate our our but, consistent price.

additional of of assets number explore interested We and sale continue have to parties. the a

where While corporate give XXXX. A pleased of to may These us you could see of the complete in you nothing controllable divestments is that would I tell optimization ethanol the throughout last reported regardless through annual we or May SG&A out we before am more end business to forward transactions the cash and of imminent, are these some basis. million the also second the the we achieved crush additional plan one you quarter. laid $XX on nearly couple reduction occurring confidence flow of will run a an be. rate and expenses see to of

did year transactions. million. the nearly plants during $XX I the capital the million Green three Green million $XX of we paying that note from associated the and the Grain with Trade of ethanol to also went ended working our approximately cash would fund in down Plains with those quarter $XXX operations we of selling revolvers, sold cash, While toward use proceeds Plains

discuss going and to that performance. financial Partners' will Plains call to some call way. John come on the are for and initiatives Green both the to under back I'm over outlook turn Green the review Plains I XXXX additional to Now,

John Neppl

year feeding of fourth a quarter $XX.X reduction twice QX million per was in fourth offset number $XXX.X XX%, consolidated Thank down ago. the we by the net you, ago. in versus to of net for This the lower Green million the was fourth sold, of XX% Plains a XX% revenue the Todd. a gallon $XX.X gallons The from by driven ethanol or price revenues were coupled ethanol decrease with total Inc. the in quarter, XXXX. of higher $XX.X when income XXXX. our compared Consolidated as in million when fourth quarter XXXX in to year operations, of a million compared of revenue quarter cattle sold the was cattle quarter income

$XXX.X recorded million we mentioned, the on the a gain of during Todd quarter. of assets sale As pre-tax

Additionally, the Loan deferred million or gain payoff from of issuance the taken items, we we all per a of debt share. we optimization have million $X.X effect reported portfolio B In expense. $XX pre-tax one-time of quarter of as positive million and Term actions net all, the the wrote for as cost plan. result of off loss a severance $XXX.X the $XX.X net recorded tax the the a would impact of had million part $X.XX Removing and

XXXX – recognized am the EBITDA benefit million was a we fourth result, a year $XXX.X ago. and $XX.X to deferred in due tax a a tax under of for million sorry, fourth quarter for the tax of recognized fourth revaluation of $XX.X the As liabilities we EBITDA benefit I Act. million compared quarter Tax to quarter new the Cuts the Jobs of reminder,

totaled for XXXX, million $XXX.X million EBITDA For versus XXXX. $XXX.X

For severance the taken in expense to million over XXXX, a increased quarter, quarter. the due $X.X million SG&A primarily $X

million the $XX amortization expense expense million last interest the the B. $XX off SG&A Loan XXXX. working was for and write-off entirely fourth quarter driven $XX million With $X $XX just rates capital assets of and about controllable $XX.X This per XXXX. in including was in expense of average the the to paying high-protein should capital, to maintenance growth for quarter about spent CapEx feed financing the current the Interest balances, Term compared our for We sale million million Based $X $X the on over to average project in at between the maintenance million million debt additional CapEx Green with year. an and interest capital $XX increased reduction capital production by related of for expenses, in quarter per of ethanol Shenandoah. and quarter, million Cattle. million of Plains should

million. was spend capital total XXXX, approximately For $XX

For capital may the be the XXXX, spending across with platform. we will environment. in focus Shenandoah, our margin opportunities project the high-protein impacted feed maintenance by CapEx ethanol on deploy Any along additional current CapEx normal primarily to

the the XXXX. $XXX.X feeding portfolio by We As The of as ago. of of cash net working assets, slightly million our capital partially the year sheet as million the of for increased asset ago. and will well highlights. borrowings working per long-term impact versus of divestitures about at balance $XXX a the Gross year and have a share cattle in optimization see in On business, to impact in slightly you our earlier. of a our investor decline year plan. now, value deck, reflect Book $XX long-term Slide we investment capital mentioned million X the debt targeted related offset end increased compared had spending

credit million This on our Our does in liquidity the partnership. of approximately revolvers. call. repurchase with XXXX. he available amount is fourth more capital August the $XX position stock of was in There approximately when million under back of working $XXX the allocation the under availability in $XXX cash talk year available million did buyback quarter. the include million authorized not Plains comes about at We total with facility of of the solid end will stock million by Board Todd Green of $X the capital million $XXX the $XX of along

storage commitment of quarter throughput For $X.X EBITDA part EBITDA than the real be cash Green quarter. the million gallons a partnership reported adjusted one-time minimum per Green shortfall incremental for of for of per of million trans same The million at I of the fourth sales. million was related the Approximately times resulted that flow a the million the commitment exchanged The January into was was an sales in in its which affected asset QX GP Plains $X.X asset was XXXX. rest assets fourth reduction current ratio gallons. excluded flow the Inc. fourth storage coverage storage Green the to ratio. XXX.X lower volume a fourth declared of adjusted volume and ratio platform. as which impact at million The volumes the included resulting XXX.X from lower weighted ethanol partnership payment coverage production leases for X we Plains million, quarter, XXXX. will gallons distributions million last basis, units quarter units the million of related declared quarter assets, flow month for volumes. lower XX XX commitment on $XX.X quarter. million that to million X.X million and minimum a coverage adjusted LP X.X note X.XX fourth XXX volume gain in core gallons. the by was Partners, cash Distributable reflects minimum the unit the was $XX.X million X.XX and quarter Green operating This $XX.X cash $XX ethanol Distributable of $X.X $XX.X million, to assignment distributable days quarter EBITDA the revenue load Plains On November. million, than of average for were for in had was $X for of XXth of the quarter The Plains XXXX distribution for volume would of a of the $X.XXX for the

back Now, over I'd Todd. call to like to turn the

Todd Becker

when challenge remain Currently, in to is positive is late. into margins inventory. The XX answer John. is back million biggest negative front ethanol sitting Thanks, XX and we difficult get get of the territory. spot more as part The answer of have of getting us come off of question barrels. do but margins simple The million the lows have to we barrels closer when

refinery E-XX to We down time said higher again: production the and have U.S. needs time slow subside. needs year-round this to exports and small and ethanol exemption

Production China continue weeks be U.S. down of these barrels lowest seen X%. of with the positives We gallons have closer over conservative we be appear of of to have We a an to believe estimate XXX year-to-date print of a several a but around basis of all EIA We on June Last since for is versus weeks. moving of to last trade at week's to we need having impact. XXXX year. could buyer ethanol few on XXXX, China. this resolution the minimum a a per start XXX,XXX production seen was million

rhetoric demand the and for the this countries. expiration EU increases year, potential Brazilian tariff of of and optimistic late, we are those addition, the as both both In on

significant ethanol products and of the need countries of have to these center in our front these trade we and tariff believe negotiators are All negotiations. be on aware for

summer. suppliers ready E-XX, should last E-XX told arrives. in X,XXX approximately we Administrator Acting supply Monday Xst E-XX retail for For June the have fuel selling get XX stations to states when EPA

gallons in mid-summer. and supply the this XXX demand of XXX the good demand balance year year-round benefit at exports and is XXX least Adding of estimate incremental Our million significantly and million alone. put a by E-XX demand should gallons add back ethanol E-XX to will industry between million ethanol

proactive position near-term for not we capital, as we in that come, our and to managing this continue a be expenses manage we Although in are are to production strong day to waiting trough.

changes continue daily we situation. pricing step flawed reflective contract the Finally, are ethanol toward to and remains first market a a believe market the more the good proposed of current

at We continue high-protein technology to the Shenandoah. installation feed progress make on

other have add formation a timeline, had operational structure. and point $X.XX we high-protein the feeds the value, as the Optimal our deployed high-protein to I these Aquafeed, of a techniques to December, markets to as would add fourth gallon we announced quarter $X.XX of As other a to we At of joint aquaculture venture we continue economics an technology well. technologies. if ingredients. face also compelling starting other current update would to These today, suitable feed year. In for high-quality margin we the using now technologies products proprietary to feed this expect evaluate in feed be XX/XX produce and

production to our value of the make as at the versus go this in grains. of venture we products, different customers optimize As these the will facilities, set distiller’s joint traditional high-protein investment a will

I on technologies. plants. Of at of on own, the refocused have we our ways our X.X billion team to our non-ICM mentioned those current As we gallons last our expenses call, of half operating are non-ICM gallons reduce conference capacity about

Our location, a our per are almost gallon that spread can $X.XX $X.XX the as and is capacity, $X.XX gallon a indications of depending OpEx one-time and equal plants. the for narrow $X.XX us best be of equalization investment on between we to make per to think We project cost well. game-changer this to

important Plains in liquidity rest finalizing plans GPP acquisitions works this the first future. roll that a this prove Partners part business been growth and a the vehicle we our I is excellent company and an there growth want and execute for to has be to to engineers will Our for of of will platform to from out us. very overall Green market reiterate our still project to for it available our the facilities. have the

ethanol such get stock those us equalization enable that investing was Directors Green transactions assets. capital team more couple million our and and goal of selling this cash aggressive million Plains the our of additional proceeds We us strategy, May more allocating value. you to to these outlined in of completed achieve year. are firmly to from is and an as feed plan, we Board million our $XXX believe stock $XXX optimization will to assure discount the the in objectives vision, give a want project. getting to the to on last strategic in I buybacks When we'll joining high-protein of price out remains portfolio to done that the to to to last with sell six of $XXX forward. then management we today now. the proceeds selling and for structure It thank stated you raise we to OpEx plants which updated I the our want are call will especially going roll reporting simplified As assets, includes session we a Q&A technologies start committed you Inc. book four and

Operator

Instructions] you. is Sachs. Samuelson with Please our [Operator from first Thank And question ahead. Adam Goldman go

Your line is open.

Adam Samuelson

Yes. Good everyone. Thank you. morning,

Todd Becker

Adam. Morning,

Adam Samuelson

Todd, plan, hoping of through on was I optimization left. the to just go and start kind portfolio what's

sales, business. I for think to to three potential one deconsolidate opportunities just more the the alluded you to potential cattle ethanol plant

think opportunities execute this half on cattle of first is help the the trying the of expand really, little in I'm on us that you the about you're bit just feedlot through pursuing. on something, year? that likelihood. kind the just timing Just especially can a side, to And think

is working just, whole portfolio? that in with, the terms intensity of investors struggle optically, assessing think of something the I kind that capital business of

Todd Becker

that with agree we well. And Yeah. as

optimization about the plan, excluding portfolio So, first cattle. let's talk

four sell sold ethanol to three. plants. six to was goal Our We've

our We people a portfolio still process. has assets. in a believe very few are up in now picking interested We still

six locations. still with several working counterparties are on different We different

going on is at our sell to three step. execute mid all we're months and first We're plants around three going raise the to and one $XXX what now our million in That's looking another than, sales. executed right similar what to sometime next more $XXX best plants sell between million say, asset the try to in to still just have I’d four ideas lower our and somewhere already. all not plants. We But we're just not we to

unencumbered. plants of are The second - step these and all

So, that tax situation. Obviously, have balance cash right the goes we'll sheet. to watch the to

mentioned on because cattle as sheet, and work of sits working The outside starting – we of second to this to does on debt optically, it we're earlier lot and a obviously, we stakeholders. are is, balance show where shareholders and thing the on it

about there sheet. And we've about, I'll get two structure to three off-balance them. And a of to so what there's ways talked do cattle is really that. talk

not least bigger well. that off-balance in look consolidate one a of other and And then it debt. to a will the is, allow at obviously, the us first of piece sell at half sheet grow to off-balance business The is to and it then as the transaction sheet

could help us that put on think depending generate to liquidity million we sheet, the to another million So, structure. the balance on $XXX $XX back of

balance and somewhere capital OpEx and looking our plan. utilization forward. those at allocate going more our is onto to get value, have things related where million to goal is high-protein, the looking book capital strategy that at the at a So, needed of forward invest $XXX to also in stock sheet between think and good point, to pretty to all $XXX then, we million We going the of cash

when to so trading about had at that few has look but last certain stocks that this, almost six week would it's the saw Obviously, the last production a better. X time margin seven day. is One the do same that. to like look $X.XX we at sessions a we barrels are everybody Obviously, to make positive. we below weeks still continues in million looking and were think negative structure It thing year, get ago, is move at. are started gallon year or better. at And there we still and A last last factors same a margins we else it

flaws adjusted. program. E-XX there need is to and just market export the that Then, some the some benefit and get continue we'll overall, So get from we in think structural we'll

Adam Samuelson

an with in to in to know your And I lot Okay. XXs. the be I and leverage balance just was getting my plant is then rates the key follow-up production color. were improving sales market needs the but there's if a appreciate going XQ, an that noise on and rates your And operating just do quarter important move you long we to rates, lower what's see your XX% before XX% - your those have to contributor both forward in of how and for you range rates low a outlook Plains as benefit margin high production do with how Green and from to history more critical to lower production you the rates, the you're XXs? in start really higher operating market, environment the own rates of in at running long consistent

Todd Becker

the capacity last think obviously daily now X.X carrying industry we're we day. XX,XXX about a XXX,XXX week. barrels today average last So, for our barrels production sales, running the million of with around a is barrels the noise day. And And at quarter, asset down was some

could wait this we'll Wednesday. and that but to go have for up week, Now, and see down

ones So in industry. doing work we the the are only not this anymore

we very flex balance bit we can have we where that any feel and got Now, like up and we a position, this turn, we of strong on down have production sheet advantage a needed. early, is quickly, as an

think don't do have I So, all to anymore. work the we

and changes. And the this had think I thought burned mid-February the we we I margins. started publicly industry have last And of to that it's getting around, as could of weak sheets and balance kind still across we're said inflection over XX that fed felt starting now the more, And, and something last thing doesn't contribution high that reach $X the trading over where these And do more rates change that year and is the come think, quarter certainly structured with I burned talk replace margin to about something and they changing. sheets a industry industry the cash have we big been year, than think I experiencing production for The burn. or billion really has people variable to six or - the industry weakening balance same about kind low see are certainly would EBITDA see ten two. but days, last due. that really I in unless causes hopefully, margins a could up sessions,

Adam Samuelson

right. Thanks. color. All that on. appreciate I'll pass I it really

Todd Becker

Thank you.

Operator

Zaslow go next Thank is ahead. question of Please from you. And Montreal. Ken our with Bank

is open. line Your

Ken Zaslow

everyone. Hey. Good morning,

Todd Becker

Ken. Hey,

Ken Zaslow

So, more is access if do do be there traded you've got place ethanol by think of refiners? deal, a E-XX for And consolidation real ethanol you and will you that companies China think anymore? the publicly there

Todd Becker

that satisfy and I be can of the believe very fuel supply satisfy larger piece a we the becomes as we I Yeah, think supply. something interesting, fuel a will will of E-XX piece larger

really forward. wherever we best-selling seen have this a the all There's a of of we though we'd seen XX end discount maybe the we - fuel [ph] that, the as the remain you we to to As $X.XX of that sell on the up E-XX, good $X.XX pump. fuel is some at place. really at when going a still of front branding even curve, station remain have narrow gasoline. And look it's still rim in XX - And unleaded

tank consumer, roll so putting lids, approved out OEMs are not all And of to and it car the as only more on the gas on we E-XX, and the road. newer vehicles more the autos as XXXX new the for represents continue cars, almost but supply, States their is that today and the for was about it United auto of supply, in XX%

that, I the you see to our dabbling think long some more come think interest will there's when but all start by you refiners, in couple as you've of industry, as seen I industry in volumes the continue pump, a and could to share that to going can their possibility. be market I at into, can of a we're take and we into, that that expand grow think we

Ken Zaslow

or So, no? you the from think might consolidation there more refiners be

Todd Becker

just They to changes industry. to looking start on very I the that we've dabble some wouldn't that. if really our into others And can't get seen know well. comment that, I into happen, I past industry the the dramatic it know through I some ethanol hold think process, assets. at

Ken Zaslow

and is free think forward? ex think of have a like things free question do second flow there. your you talk costs My going that about in the ongoing lot you cash flow. cash - costs some of you What Can do one-time severance and how on would you been that had of

Todd Becker

Yeah.

have Our ex the last one-timers, John? to would quarter. Correct, free quarter, million of cash we all flow negative $XX estimate a million last $XX been

John Neppl

little more. A

Todd Becker

than not much. had off. more I that. to had of little a Yeah, that one-timers But we a mean, we pay bunch

$X.XX margin now, forward, into the getting going And, we is negative negatives our story. between somewhere the plants Right of and average, quarter. is just some probably are last going are industry. average, digit on structure single the EBITDA. and across But some negative so, back tell again positive almost averaged $X.XX on positive $X.XX to we And EBITDA are the obviously, industry and

on So, of think will into this tell second the couple story industry next quarter. the go to is going where the weeks I

We get lower. see a pick not that the we year into We're there and production exports really different we running demand not time. now, to are and $X.XX lower last will start positive $X.XX we're surprised to are we're relative than territory. supply, where last back I'm hopefully at gallon year to this very on spread, up, margins and outpace as

in optimistic fundamentals. that a we're conditions. to And starting but see start move based taking market long, and to it's the turn think We that make current is finally for on we're so adjust too

Ken Zaslow

thinking you're the think you you going to sell Just are other thing. actually sure, back cattle making that? What the business? going to Do about

Todd Becker

then of still The What to make go our business you looking when Almost it, our then cattle debt That off-balance and off-balance working revolver. reflective off-balance situation revolver. a look sheet, of for we're is something, balance is that, at cattle sheet. maybe our capital and high over double sheet a debt start transactions. No. million partner $XXX move situation in mean is the a XX% could a to sheet of bring we at is would

And the financial that strength we not so current is debt reflective have. our of

get we the day and the the can like And investor it if we sheet but sheet. the on off-balance return equity, they that high so our business look return on confused when investor that high debt every sheet. off-balance at capital, think on It's a balance grow makes We lot. business balance

Ken Zaslow

Great. Thank you.

Todd Becker

you. Thank

Operator

you. Thank

Please Our Craig-Hallum. with comes go ahead. Eric Stine next question from

Your is line open. now

Eric Stine

morning, Good everyone.

Todd Becker

Good morning.

Eric Stine

industry on improve little of more tough is question you I do the is ones and as bit of wanted I'll do and I this a production just you to industrywide, guess same utilization? production that, boat not But now answer levels my like I come in production rational? terms on off. back you a kind give do to mean, comes but production in the you again? industry view long-term Or do bringing feel think it the and margins question previous back are finally mean, you're that it is think I So, this taking clearly, shot a right of to - only anyway. maybe a is

Todd Becker

our So, gallons that offline. right almost now billion is any is there X on view day given

just back has think experienced right So offline. our industry to barrels The I And gallons X.X to have if at cross-section think couple for is view I of the about billion that about production get million these a a gallons, real can online, we've started the improve to XX.X people now, reduce as that's volumes. that broad quarters. margins levels almost weak billion a bringing pretty any day, industry produce there's enthusiasm industry X of -

discipline? will to And more Hard say. bring so it

think balance stress I the sheet more discipline. bring could

cash situation. have lot in is a industry companies a while, the for While burn quite of a been debt-free

And to is industry your you run And Once from lot draw cash that to you cash, actually, think on the that's certainly thing have well, then if in. have you where, if it out do revolver. through at is look revolvers, your through I you if so term the as you while outside first of have you debt I get some a get point. the of large your just don't you can balances,

we can past. more we see a X.X time and levels we back catch stock. if point, to grow demand X.XX although for to that this at barrels we would that we in But, it a down period extended we before, while to rational, So, haven't this be do that the I if proven will stay any went of these day think like and be would up, we million

we pretty I with higher driving exports. this the ship really is these production industry quick, grow aggressively And right E-XX the think and and quarter this stay the coming could stocks could into that down especially levels, of haven't done we view season. if market at would we

Eric Stine

Got it.

Thanks that. follow-up. Okay. And for then my

of to talked playing should reduce further see on plants, Just we about do coming non-ICM out? steps? investments how type that? you something portfolio Is OpEx to your Just that you the timeframe mean, back what that's at that I dependent optimization think about

Todd Becker

less where Yeah, of investments. We payback, steps capital with not the going including investment costs, costs, the we Obviously, We best the plan return plants. And of will a want make best lower we're at want gallon We're equalization, get want to we're that, At to for not other really after low-hanging to we'll to going make the to investments talked go OpEx that to the energy our after the use we first the view, lower go fruit want a continue our we'll on balance one-year that. about, it's after going at is not our portfolio operational and get go $X.XX all returns. and the big to for five protein, almost to the plants. low-hanging start If those out some to sheet. its volume first. at the complete. best go we we fruit corn, we - look if In best more have optimization we share investments our the buybacks. will our

a OpEx Wood And believe When River, plant typically like it. OpEx Shenandoah. really a two we're there ICM. and then it same between Delta those plant gallon investment could T, at about we million operating plants have think Obion is at I about to $X.XX equalize make the we a a and like as take a can gallon million or disadvantage a about rate XXX we performs we gallon the that plant, XXX we excited $X.XX

that feel does and fix it's we out our we – will figured we we add is work. that a hard that sure to where so we very engineered - have try make we And do. reduction operating Obviously, look will all of Obion our that will partially like lower by then by works, throughout where get but Shenandoah will we then overall. and all less out one plants, input strongly what If But we our work. also not know it want to costs are costs operational energy key roll that less and OpEx plants and of we the our the bottlenecks can

Eric Stine

in that, in Understood. gave, in part, included the numbers And CapEx XXXX? terms of is you

Todd Becker

for I and that we them one million huge impact. to $X.XX is at of we'd we're No, million, plant, No. where whole it's To but going across of be When platform get the some roll platform, the about yet, decision structure to out whole the $XX overall. But, probably us look portfolio from our $X.XX it's to go wait programs will all that a one optimization us of $XX $X.XX at that right across better you have to we'll be actually one now, which million small $XX we times. make big further tells there. across that first point done. to Then one the We do do somewhere would almost between better margin want a be can prepared not. margins one, give and would not are, Where mean, obviously.

based timing know first determination, forward go quickly after it. after can move at the and we'll and is, is that. the It's curve structure do just fruit where the the we we on then where really make So, how point. margin this low-hanging We

Eric Stine

a Thanks lot. Okay.

Todd Becker

Thank you.

Operator

you. Thank

question with next Irwin go Craig Roth ahead. comes from Partners. Capital Our Please

line is open. Your

Craig Irwin

taking thanks questions. Good morning for and my

to reasonable So, this we're at now. for new us about Can are end interest environment the could are hearing what China wanted Is coming for that you getting on year? there in ask And Beaumont in terminal outlook a be could as what interest material you as Todd, geographies looking for up right far you I export specific maybe being or that the XXXX? to cargos? comment as see cargos potentially going

Todd Becker

Yeah. tracking same as around We to the think XXXX, China. without last right now is year

in means accelerate. so see we those had And markets that as and other to growth markets well, we've continue continue to

grow. So, Brazil continues important in continues to grow Canada and is market. obviously, XXXX, an to India

opens that X.X to together the was close once we we China. when the we up. before let's million We gallons - Last we on and to also about year, put - did year million all year along window see, gallons, XXX gallons you the to did are get us XXX path that those do million But about normal XX have million gallons. suspects, XXX before China think, to should we - this billion that China and for of in XX to had with

seen the mean, around the the fact, the away made is know on rep so with nosing it that. We if well without the yet. to case really And the the the trade think And sometimes. needs we've as and tariff. trade to tariff what's the going I you know We away key I are we here haven't European as you if draft arb take well prices. in works people And, our interest what's works take on we that or arb on tariff works come know off Brazilian tariff.

have those in robust of export and all up market open XXXX. a could we So, pretty

well Beaumont. execute to continue through We

think environment of We in into kind terminal are, to waiting MLP. a see market we're we happen better drop We obviously, XX had the months, the out that we to next export market and to could X wishing so the sell the as improve. that

lot counterparties interest to big the a as enter want that long-term well. We contracts. of into from a we have supporter terminal are of And

something And own growth to last so that's year. sales our drive export in us help our

Craig Irwin

question question. Okay. a My next is bigger picture

that Valero more ago, Does other the assets So, years reasonable? buying impact of a like your be that pure some think significantly you you streamlining Aventine, future you're would you from acquisitions you many structure in off-balance feed with or sheet once target concern any that a refinery done Are have it lots for structure, more you're business? would something your that initiative, much is up. did you will consequences be play think scooped other could look them when stock, the the lot base, there back that

Todd Becker

have of all we Birmingham, assets, be well sheet, when the we doing on X about and balance post We will which that the a believe the plan, position, very Beaumont, operating locations. the debt is easily of billion gallons business look have optimization quartile we a terminal in left industry. cash strong So, at between top will other of would little

We're protein you our of to technology one EBITDA value to making world co-product. just margin around bat, the which of do cattle choose a the should to one higher off-balance a add, business XX to look co-product, not the increase ranging technologies can in an XXX% working able all protein, protein of to company. now, It's $X.XX changer it's value flow $X.XX more making maximizing choose be and our bring plant being XX be, future of said, XX% this The all that. able to the from the between And which years. at other finally sheet technologies going industry going not the is value determination opinion, plant on three is of industry, with still of as of see we're the And for to the is the these Right a We gallon making initiatives off will short. several that right is future free you this game we starting ethanol. when high-protein, to to cash paybacks have into it. of

less different a high And recurring that protein put in that. you're the so point, than value Much feed that and seeing you we to the have company in ethanol what a has like more reference us much like you view of in place. this. market quality, because margins value-added get does through And at of world of that company that cyclical for the a would I -

the much old and processing soy point. over industry processing XX protein stable will lot on can time of because benefit demand of because we the at margin ethanol it protein look more drives And have said, make like more consistent enjoying this and will look that's ethanol That's crush when it grain ourselves, going soy like of a a does XX the industry always much that days. than viewpoint of the a forward the we've and growth. stable is As industry we our structure

Craig Irwin

questions. taking for again Thanks my Great.

Operator

you. with Jefferies. our ahead. Thank go And Please next question from Alexander Laurence comes

is line open. Your

Nick Cecero

could you Good timeline and for it detail morning. terms on to Laurence. Cecero material. maybe the JV, This some Aquafeed is provide future for of Maybe deployment capital Nick just on the in if be

Todd Becker

one, for world Yeah. a place produce of as the couple put the The aquaculture the industry. in will future feed products in Obviously, growth was need in an we the high-quality for and first reasons. because around optimal that JV

to And so substitute everybody just really game to selling one truck high-protein feed time, is for a feeders a protein much grains different feeders from it's feeders, XX% distillers at selling to corn. and a than to cattle chicken hog

It's Today, crush. high-protein And soybean believe think, after at of on right minimum in a $XX.XX $XXX.XX minimal. making than trade our it is it take a that to more to so now we would parts needed the markets. crush. distillers But meal, sell it will the trade add value world, a to a some sure million better capital different you gallon very, higher gallon high-protein over much we we worth And go the to is a we to will skill investment XXX almost is in can when $X.XX people-oriented asset-oriented. which par gallon with $X.XX right premium, The plant, it. add bat, set off another the which, very the could $X.XX

with, we for needs will the we one-stop space. around protein to partner because that the going we'll that Although forward. aquaculture we for of now, solutions And think be baseload the full, because we the looking their produce do we'll able customers of feed that have have provide that partners all in are

our between value and now, process, we'll not we So there. we’re make looking saying of that out at capital co-product and intensive capital from going to of point and the forward it's determine services a the what needs very needed, ethanol investments look this but our will right best at at the plant investments maximizes

Nick Cecero

a And follow-up. Thank Great. just you. maybe

net businesses? you assets, think the you short you a the Given where of flow scenario the ethanol shift see now relative the and the from between to do how the protein being forward, about to the volatility ethanol side protein cash balance in generation the going Could business? ethanol

Todd Becker

X.X. margin sheet to our Obviously, accelerating In we capital takes it to reinvention forward it more stable be really Our structure Green X.X obviously, will scenario product sure a costs. environment, that. Green But, want on with - is And we'd Plains that, much structures. and at of be protect different that call all focused make because margin Plains going investment. the we do we high-value production balance

do protein. is a about very is sure plan. and game with up but and plan. execute out of talk set Green ever continue completion continue that why that have company to of like come And the point, I production. we will than is what to to we execute this through, the that is market long up is EBITDA go the have we'll But time right, correctly this portfolio execute. talk the to about program. I We going going through a protein work market Plains from set to think we optimization ethanol more execute survive at But, the EBITDA that volatility to at through when we which full in This on to a be obviously, company we’re and we make we we all point, We said when from want day envision some volatility stronger

Nick Cecero

Great. very much. Thank you

Operator

you. Thank

Raymond question comes from James. next ahead. Molchanov with Our go Please Pavel

now is open. line Your

Pavel Molchanov

question. my taking for Thanks

if realize export opportunity it. between us quickly the upside a and none could the can be this to month, window reached say exports for practical politics alluded an But in reopening Washington of agreement You've let's how I envision to you of And Beijing China. to hypothetically, predict sense? were the broader

Todd Becker

I be place, is already policy now, have immediate. in product the right it They would almost the for think they soybeans. are buying demand

at good doing take gesture. they a faith very long, it If look didn't that and are that, you as

there. have XXX Chinese could from it import from And think China not thing close million purchases is tariff would going that could comes what as significantly ethanol only restricting We tariff, XXX That today. see to I ethanol million would be there that in gallons immediate so tariff higher be the if to And these didn't the the U.S. as down. soon even going

say agricultural trade and it's So, deal They gets the everybody trade deals, front Growth a know States that, impact we understand economy these if of staying our that's can at closely. of balance worked, front importance of is this whether can discussion. group different markets in Open sheet is it United immediate our doing Brazil, in perspective. that we best Energy doing that trade a make in the the in the to from up negotiators sure three view almost continues all we've great the of around sure to job got We're ethanol our staying to center. to China. or We're front world an to and those watching and we're the they importance and ethanol something EU, the of make

Pavel Molchanov

an One imagine reliance where imports about Thanks. on China. successfully without average E-XX nationwide any you blend the scenario more Can from can China U.S.? implement

Todd Becker

No.

want care of now, - demand? take make they the can think plants don't and ethanol need to build they can can that building. are achieve. I of corn they to no. obviously corn think their is they Our that sure don't they Sure. view in some have is that make I ethanol. to But supply bring They they something

they'd ethanol at think importing this point. than in bring I corn much rather

them do is. don't the So, nationwide like just obviously, United we blend, States them the any well, fulfilling E-XX the in think time see no, continue to of and, show as future E-XX the I I near benefits

it the China they exports our see to and very we're So, past But to quickly. continues and after volume going is our go that, is is continuing amount United them and to blends increase from to for out what view about are of there. world in as growth that the States increase in then would view then X billion when not right obviously, start to to the be ex-China same they of in, taking comes hard start gallons a they've increase been take would blends, the

Pavel Molchanov

much. Thanks All right. hear. Good to very

Todd Becker

Thanks.

Operator

have we more gentlemen, and ladies time question. And, one you. for Thank

Akyol question go next from is Please ahead. with Our Stifel. Selman

Selman Akyol

you. A if could. ones, couple quick I of Thank

you and in On have the above you the level recoup long recoup run XX% do do deficiency that order have to how that? payment, to to

John Neppl

we MVC, back MVC, that recoup XX% we above of The run a that. And XX% roughly million. so MVC we period operate would $X have minimum capacity, the that above to eat into And to need to XX-month timeframe. over to need is the the

Selman Akyol

are you. longer Got partnership. longer Can your talk it's I then what of it? just Todd, sort talked partnership, about a about the term And know, term, plans for growth you you

Todd Becker

have, done Beaumont available Yeah. acquisitions facility the volume in and start believe we - that to for over whole Beaumont, looking going like businesses we number focused manage we grow produce on two, of and obviously, last We us this assets to ability demand months, couple last through one, restructure. GPP on of we and for we've terminals But, at that the we the that believe, to platform growth we because, focus can I with Number retooling are of similar Birmingham. still the mean, the didn't we're liquidity once months. it that over still the our the six the

our at is a grow opportunities looking do working continue have And now so at that of to we'll and GPP. charge refocus internally manager in now we that efforts to

we said outside revenue to the diversify much we that believe restructured. located ethanol at we're We beginning, and got is that now at in from position that plants. - that Plains As do what want through to the tanks we've the volumes be income of ethanol to a the want MLP better Green once streams we've the baseline would while and still

to to MLP invest we'll continue the as and we'll support So, behind that well. continue

Selman Akyol

All very much. right. Thanks

Todd Becker

you. Thank

Operator

our gentlemen, the this ladies today. like turn Becker and session And, to would remarks. back concludes to for you. for thank call Todd closing his And Q&A I

Todd Becker

$XXX lot last and fruition do balance quarter we to not the we encumbered off and assets by remains sheet of million XXXX come successful us some things up sure around in strong. our Thanks, a these have debt be We it's company's first write joining and check when to make and The Obviously, our wanted cash a demand we long-term everybody, did term last supply. to we to fully in that thrive the history make position year, we for set today. pay remains sure strong, our debt. company term did time

we're excited think and so very We the need good little to for well We a are but XXXX you we position help about a we've set up And in up that. from I set beyond. think succeed. market,

next call and to you coming quarter. talk for thanks we'll the on So,

Operator

for This may you ladies disconnect. you and that, in we program participating day. with And concludes Have today's a thank conference. the gentlemen, all and wonderful

Green Plains (GPRE) 11 Feb 192018 Q4 Earnings call transcript