Earnings call transcript Q3 2022

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Operator

Good morning, and welcome to the Green Plains Inc., and Green Plains Partners Third Quarter 2022 Conference Call.

Following the company's prepared remarks, instructions will be provided for Q&A. At this time, all participants are in a listen-only mode. I will now turn the call over to your host, Phil Boggs, Executive Vice President, Investor Relations. Mr. ahead. go please Boggs,

Phil Boggs

Executive on good Plains Welcome Call. Partners are and today's and Officer, Chief Inc., Simpkins, Patrich Participants Green and call Chief Chief Marketing Investor and available, and President Becker, can and Leslie Green Third Todd Jim Product find Meulen, corporate page is Events There both morning, it EVP you, Stark, to der Officer Innovation. Financial link everyone. Plains a the under you Presentations the Transformation of on on van Officer, and Thank Quarter websites. slide Earnings presentation

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

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

Todd Becker

and Phil, morning, good Thanks, everyone.

tightened through record needed with of quarter a the onetime basis as just and we The row again, corn impacts events world not basis It's During Indiana a to grain a a in the driven experienced the margin, Tennessee, Southern We the which Northern were corn out which year was we plants harvest, and running result third is crops to drought south the but ahead rest quarter, and resulting challenging as saw the from running in where environment, it lowering corn. our the by gallon margin and a stocks higher kept than of industry lower-than-average we in of the experienced yields, negative $X.XX tighter Midwest, some largely that. the across ending Hemisphere. normal, three north, corn adjust. this of a

basis last than over futures excess than nearly than corn with $X year higher of average some five-year in and which $X.XX, was average. was higher Our plants the $X more

margins because this ownership The third quarter of hands. and is farm lower were tightness tight in

fundamental other impact costs of increased first The our the gallon. basis our completing The about which we corn our situation seasonal and repairs these maintenance forward, shutdowns the XX our to and XX that - our in plants, fundamental these is for shutdown impacted pull quarter. all also of because $X.XX than of decided of utilization corn, maintenance impacted a operating rates by margins because

result $XX.X or the market, cost adjustments, by $X.XX higher market In noncash a about gallon, LCM addition, has inventory which of as or corn million recorded and to inverted the this a is we adjustment. impacted be an clear, ethanol a basis also lower margins but our

these gross been two our margin have items, would near Excluding consolidated breakeven.

are watched fuels, volatility still harvest fact. focus basis and to corn closely. margins was for significantly basis for before quarter, the with that but lot expanded QX recent even the and QX, in $XX.X quarter contribution, corn across days, fundamentals right million oil of than But on the for you I positive Overall, now, our negative. with fourth levels a which better ethanol know EBITDA liquid needs Even have be corn is

quarter. the corn Although is coverage of XX% our approaching the and remaining day physical every grows for

been to as has volatility remain and a for [Gen-X] we to The that quarter-to-quarter continue we portion business of unprecedented, transform. exposed our

maintenance program rates transforming throughput from the transforming seasonal record seeing the With high we the corn and we remain to. of and are strongly results QX company we by company run strong renewable year Operationally, operating quarter and financial quarter third QX, quarter than are be oil completed are rather Our corn we highest the anticipate fourth for the that in our yields. should yields. oil influenced

Fluid plant we start started up for the MSC [off] commissioning up October Quip system load are The getting XXXX wrapping projects our MSC at as actually Our and Mount in Obion, have in and Indiana ready - up, are preparing in and weeks. began few next to well. construction the Vernon, City Central to technology with build commissioning are begin Tennessee should dryer

we'll called that DCO we during renewable Tech, third This commissioning additional online, structures as in expand is contributed strong the to higher later yield locations. ability we corn Fluid off continues extract the quarter in new basis discuss the oil start-ups in believe commissioning, plants increase point the and well a the benefit bring corn to to oil during should renewable oil and to on call. dryer begin interesting which very the of are Quip offering from continue load fourth quarter, completed, One the a is we the from rates before individually

firm Pricing us for and of very up carbon-intense sets remains this product feedstocks for low there's well amount finite only a this as XXXX.

the at undergoing a XX efforts serving decision senior in company As to to a senior of a all chose are strategic team transformation, of member our for of most recently for the we time. efforts. company and roles, of he years important time over has This Simpkins resources dedicate natural to those pleased dedicate new Patrich challenge to made CFO, full Transformation Officer. on has the next our years, a Chief been several number a take these been to we as was

in from know in CFO. you and as a background over of take Investor Relations, many who his he'll finance has dynamic time Stark, Jim

comes welcome further ability deep only also brings transformation. plan process enhance to in success. as Commercial, team at as Grant attract long our in experience cannot also agricultural and our These with organization the proves depth who this EVP talent and commercial leadership and Kadavy Herbert a pivotal a to We our our who needed history trade Jamie global history bring our and joins of added our believe who in but to and of time additions organization execute CHRO,

dextrose, to Fluid in Quips low ground where Shenandoah on technology. intense deploying carbon We our produce sugar clean are facility CST we broke

in BioCampus scale us showcase facility now well. as has our MSC long commercial talk with [AquaLab] developing plant our first first that Southwest been construction, and and for later Our under facility, dextrose about Iowa a more we'll

morphed Our to on to a company pivot company and ago continues committed we a customer-centric technology our begin ag entire We'll into years to explore to are decarbonization. tech firmly that with transform, and focus completing has innovative vision of ingredients, transformation. ultra-high-protein

remain and guidance laid plan on on for deliver initiatives on executing on are remain XXXX and these to that We transformation track, XXXX. out and and track, we

interest pet we volumes upcoming XXXX. as scale, in a our The to food executed growing orders win suite, for accelerate, in finally generating are have from position our marketing have our species. waiting increase interest we are XX% vertical customers new for to commercial product redundancy, the ultra-high and our of already year. strength We volume, Many exit a operation product acceptance around we world XXXX multiple to and deliver protein they customer and continues across that in and continues the customers been indicated on

Green products now Having of were discussions. in proteins for these changer game smaller for in historically Plains quantities, been has a to our available when each tons year over much XXX,XXX capacity novel innovative really market the annual

are protein here product a few we bigger scale to able we critical demand similar, quantities product quantities in look a make are one-offs a now is there can that space one can, growing supply and with no this unmatched somewhat beginning redundancy. at there customers else which like is While Commercial that differentiating to in a can factor. provide the and are novel

With poultry leaders dairy multiple respective some in sales the of time, customers customers industries. XX% each of and protein in our which a later market take about are these achieving from are to of our I we aqua, new expanding as world. the species this across call. executing baseload XX% pet, of protein market are but develop today the talk product scale, swine, Developing the will importance customer-centric around globally, we we products ultra-high volumes for and in their

During settled We over you. maturities deliver in million the cash, strong ended structure. on position remaining without $XXX balance of any us stock for cash have we of the through leaving a to $XX.X convertible combination on with the in third our sheet in and strategy capital million the near-term notes quarter, a quarter out we the common XXXX and remain laid

Partners of operating. continues benefit platform strong deliver Plains from will and throughput capable Green rates to utilization the is consistent our results

partners the $X.XXX consecutive Plains raising per unit. Green to it quarter, increased their For fifth distribution,

to financial call to Once Jim to an results. again, update over welcome to you I'd him it hand and like on overall our provide the

Jim Stark

driven to year rate opportunity a to than consolidated the Green Glad which rates rates. reported were ago, year. to everyone. the the compares Plant Green Thank $XXX and utilization you, for organization. Todd. $XXX be quarter XX% the for run the period and favorably Good I'm improved revenues Plains, excited run to the higher in period the at the rate million back is XX.X% a same quarter, run year-over-year same Plains was finance for last which third higher that million, by morning, lead

anticipate be we quarter having maintenance XXXX. already turnarounds mentioned our quarter to believe rates production QX Todd our due strongest the As completed will utilization during improving and seasonal earlier, of fourth

That of compares for the $XX.X $XX.X last to million year. reported a million to negative loss in we million for quarter, the of compared a million period attributable share. quarter a or to the $X.XX for For a was same same Plains diluted EBITDA XXXX. net period the $XX.X $XX.X per negative loss Green

positive opportunity earnings third limiting higher in and by margin challenging the driven our this As generate the faced weak indicated ethanol demand, basis to a driving we environment a release morning, corn margins. quarter

We on margin. contributed cost inventories incurred negative that $XX.X of the lower also market million to ethanol adjustment or

crush, For $X.XX due the than prior we lower the factors above. which described year negative a to gallon was consolidated period, per the realized

$X.X Energy year. period continued segment running strong last & increase I XXXX, million higher in would a Energy EBITDA segment & Ag the recording versus performance that XX%. in or Ag than better came for has note a XX% Our XXXX, nine-month

was personnel transformation For costs in third and The expense was includes the segments call which our SG&A million higher compared of as XXXX. Interest $X.X by QX impact the capitalized professional and headcount million our XXXX. in the higher year. increase in fees this increased $XX.X to $X.X all line we million for $X.X from costs on prior for of amortization year was million the roughly QX quarter, third of is the noted support million $XX of reported quarter interest for debt with driven of quarter, our

tax to of forward XXXX. assets. period of At reduction tax same indefinitely. be Plains $XXX.X of carryforwards is for deferred of net $X.X quarter company Green for to the valuation million, Our the was a had available income end The which million benefit tax quarter, a the compared the allowance of may carried benefit loss the $X,XXX the expense against due to

On provide Slide company's of deck, summary we a of the balance X sheet. earnings the

we end of million the $XXX.X capital shown, of to $XXX quarter XXXX. financing of compared ended at As working the cash, million with net

position working capital revolver. at $XXX.X Our along cash approximately included liquidity cash of equivalents, the available cash, with million in marketable securities the our $XXX restricted million end and quarter under

attention MSC to to the safety million some For third anticipate the on approximately build in range $X and protein towards our capital. current in $XX capital million be turning sugar compliance based which $XX for million and $XXX this CapEx our growth on initiatives have does profit to capital allocated schedules, the to capital year million growth include We and maintenance, of our about clean expenditures, $XXX for construction $X projects, million Shenandoah. we including sustaining of initiatives, other quarter, million will

the partnership. to Turning

the we reported consistent realize which because trending EBITDA net a and $XX.X lower to expect performance, for same MVC with upward than income higher run adjusted parent, slightly of cash above $XX for million levels. realizing continued is the period the We the volumes flow, an of year of ago, million well at and now earnings million volumes quarter, $XX.X rates

while distribution of As to the a quarterly quarter. per higher unit increasing to maintaining for continues ratio $X.XXX the partnership a unitholders, X.XXx coverage returns support result, the

year. partnership, For the last flow for of million was for in same line with $XX.X distributable the cash $XX.X million quarter, the period

the past excluding $XX.X ratio, resulting distributions and reduced partnership amortized EBITDA Over coverage $XX.X XX X.XXx of required million a million, months, flow for the cash principal adjustment $XX.X adjusted of last the of million, in payments any declared the in distributable year.

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

Todd Becker

Jim. Thanks,

to Act our But carbon. is Gen-X we So, we quarter-by-quarter real changer I a and volatility tailwinds as we from is enacted increasingly want on and And our incentives time have Reduction spend our The while believe protein going by the oil, game industry capitalize transitory impact typically potential some from through sugar to this carbon. immense Inflation optimistic continue market. quarter, company. This and start and actually bill with our some company in the the business, decarbonization underappreciated about situated to bill. recently still this to to we are uniquely a are the included transformation may is

that XXXX, combined leverage XX, we and time XXZ, excited further are changer uses below contributions be in biorefineries, with XX. and our later to positioned can CI production partnerships completed an Midwest our gallon to new are will our of the power production plants to reduction biodigesters, heat at of identifying many plants eastern of all provides Summit CI The per for to each we kick into the the significant other that this very new opportunity not to solar and on today. start we GREET from head When decarbonize, when incentive significant in wind $X.XX things clean of credit The are production to looking till below anticipate initiatives at to possibility far doesn't look program once fuel game or sequestration it we Argonne and credit. credit our to and reduce combined pipeline fuel and initiatives Carbon just annual While each decade. we get fuel from our like model, And options. additional point alcohol-to-jet then clean outlined, a opportunities carbon ethanol initiatives as the in of carbon the technology-neutral in even adding plants our the sequester of are with number

in as online. corn renewable business come Our of additional yield MSC reach new facilities oil continued terms to highs

a in be quarter The base and produces our oil platform which above is The will margins, third values, corn quarter $XXX to add Gen-X gross could $XXX us, under believe pounds, of consistent price in another pound for yet higher fourth we base specifically included record $X.XX million earnings was corn MSC or again. of ethanol. but the million and uplift, XXX just the generate yields approximately our million $X.XX

the to our for XXXX. is tighter There growth get stream of is grow million DCO various expect have product to by diesel market, in with continued to We us, but which and be produce approach year the interest one and to we is per monetize in total every ability ways, industry. high as counterparties valuable to in prices the XXX strong renewable stream patient This due day seems seems to pounds the firmer. demand we a the

oil this trade per pound values. our renewable of consistently soybean as The as also and biodiesel extension $X.XX to oil credit its corn new online because producers of the believe diesel waste We LCFS will blender national fuel the per high oils times. source clean to in beneficial a $X kicks tax at state feedstock. CI to is differential renewable corn come And when programs and encouraged gallon diesel we production lower credit as a oil premium carbon and see at further premium low intensity renewable more as or only are expand

month, exploration You as roll tight from structure, supported to tighten the move quickly macro move we market through is in bought. random and notwithstanding the seems term which up every lower, can very is and see a

been production end as carbon the diesel view onset has long-term new the yet. low stays decade Our through firm is oil of the felt not renewable of

protein. talk let's Now

impossible protein been platform herculean and a half front, running. challenging the with chain our five of effort end deliver and labor XXXX MSE of and navigate. by nearly unprecedented progress continues builds major has ingredient the almost our a with of platform It to the over up On construction to tightness supply to market

XXX over have gallons tons protein of will capacity equivalent XXXX. We with million online XXX,XXX in

we on to waiting the and earlier, next Central is will several for weeks, complete, load-out in in a start mentioned and is oil permit Vernon we dryer soon share As excellent. and the commissioning oil January Obion the start the as will finish will turn is Mt. making as complete, site, early begin and City

Dakota, on the plant we in be create Our Madison world, under is location in will to the protein North largest turnkey break which our production MSC XXXX. JV facility and construction expect ultra-high in ground early

capital as come As of for DCO indicated, inception and a is we as is significant. a nine capital Otter at months Minnesota our XX install is from plant, late an new gating Tail economic Fluid patient With since the as the that the will said, that permitting at as plant to we as not program, smaller could Fairmont months be move in can a item return efficiency from permitting and but issue, now. and standpoint, large technology on plants Quips a early

We overall are Otter oil first are Tail going with DCO as we MSC said, to projections. our that's on we after track corn on deliver That permitting. Tech low being for carbon wait renewable superior at

plants higher higher still ability different the the slightly mix with will the same a MSC With to at roughly rates combined we overall MSC run of larger footprint, with yields, get Gen-X plants. but

our to Gen-X as and on protein ethanol to higher projections can incremental from and $XXX are go track other working innovative to on. our of we platform base Our to XX million $XXX be products value pro we million build continue market out there

in across for Nebraska to facilities can We there. also Atkinson, as fleet, our up current platform assess smallest are our capital they make what the and shortfalls rates the invest the any in continue to York and run

and and changer industry, Fluid which technology monetize maximizing as Tech our preparing to as a Quip while they are help guidance use leaving capital a there on technology investment return can solution. turnkey our well are the DCO this data our game offer our We learnings is DCO to intact.

We Construction overall sugar to underway. a deployment the Shenandoah, significantly valuation. Fluid first-of-its-kind value of as clean at and our believe undervalued portfolio of a is Quip significant of biorefinery technology continue of Iowa innovative is company's component Quips Fluid our

This dry is carbon make BioCampus, prove to can we after vision customers share in next technology and confident remain transformation our at produce lower footprint the of in spec. the generating from mills. installation build and step a to interest in who we this of our CST partners low-carbon We Adding to potential already market the the scale product multiple rollout this ingredients. is

produce be pounds be with been has than recently XX food, had XX, $X a refined XXX almost to capital and use and and Our online will future could contributions. XX This processes. designed Dextrose To been you based in today, demand and with approaching upside $X capacity to biology XXX synthetic first equivalent million if dextrose today's to per pricing on make able terms, pricing give facility pounds greater additional chemicals, bushel. has would products bushel deployment. unrefined in in or an million example, current plant result dextrose even in we stronger for gallon production industrial the margin high

beyond investment well. the space sugar five growth be growing story as years and additional We a part and will in over next believe strong three of position. have to will opportunities XXXX IP years of our clean We this leadership believe have we significant

of commercial space an CI a and opportunities, see as aviation us platform carbon we for the molecule ethanol fuel this on in the and our opportunity. conversion partnerships place, While aviation We plentiful scale. believe sequestration to our a have lower key sustainable ideal be in major before alcohol-to-jet longer-term impact end decade. will to at position fuel With sustainable

materially EBITDA will put clean which and in grow other business beginning sugar, pipeline the corn together, opportunities, track our values protein can continued MSC And on the to our baseline projections, XXXX totals. started our earnest base reduction just be Summit in from oil and to carbon after upside ancillary it these from of businesses are achieve opportunities which XXXX could guidance there. you the getting initiatives, with carbon then all add excluding completion and Gen-X previous When and

greater or to taking these On and place shift XX% top would other protein product add that are a of protein that, also totals. any or ingredients to material innovations

Our ingredients, our of expanding we day. low our macro initiatives the and our and are carbon growth, value communities our of bioeconomy, with and aligned growth partners transportation the every employees, customers fuels our shareholders, decarbonization and pillars on behalf and create and our are low owners, factors executing to protein business carbon

thanks With now joining can today, call Q&A. that our for we start said, and the

Operator

[Operator Instructions.] moment a Q&A roster. compiled will One be

Goldman Our first Sachs. question comes with from Samuelson Adam

Adam Samuelson

So, Todd, high is question thinking and pro I guess commercialization. first about the

that of went as plant incremental the the coming year. kind just a commercialization rollout the that I generate bottom end And the And about think, and through of those XXXX are interest talk high of you're contribution the that, seeing pro protein customer that of as and lines, sell stream and now to we of about when those. by profit think could in high You pricing and to top in ultra-high have, be where about facilities you I of on and as value wanted incremental guess from kind the pro indications the kind contributor would clarify thinking along just the you XXX,XXX line. and I the you tons XX%

Todd Becker

Thanks. Yes.

coming year, from online first at we have this the expect of the the have the we see program year. we end capacity contribution - will with in we and XXXX the during that real under online construction, So, capacity and our assets

somewhere about share of kind values you a strong is of gallons today, between when XX and is $X.XX million basis and XXX So, $X.XX that. on converted, today margin a current available pro oil seeing, talk a gallon part what we're

upside think but as those to continuing well, around that. we we're develop to opportunities there's markets So,

We're starting poultry XXXX. in significant in see well for for So, vertical pet we to sold interest pet swine and aquaculture the food XXXX. as food XXXX, XXXX, interest for for

on of XX. a margins XX, perspective, or what XX from kind it's the whether So, XX, depending customer protein the wants range,

converted, and depending we XXXX, to about So, potentially from XXX with we're upside gallon, as what $X.XX we kind margins a and on point, $X.XX go from sell of the this thinking there. gallons ranging starting million year into the

Operator

with Securities. Levy question Jordan next comes Our from Truist

Jordan Levy

Good morning, Jim. welcome the all, back and call, to

thinking start swings comes good Okay. the in MSC got is getting comfort the into so, level I market can eight and some that. know on online, still these liquidity. to or your off wanted ask the of come and the cash, we about all When ethanol just to quarters amount up when next sometimes it a focus but of eat

about shaping curious how feel capital CapEx maybe thoughts going XXXX? up? on that's any and I'm So into runway how you the XXXX And updated

Todd Becker

- little I'll bit talk first on a on the market.

So yes, I while at anything. third flow, depreciation mean, free between worry did obviously, is and well. look really for in see about basically, enough when wasn't quarter, us significant noncash reduction as to we We which we the cash LCM, it the - some

As we last positive quarter, week into over the the so. and turned fourth ethanol or again have increased have margins come

very dead what we basis, unique think the as record liquidity solid our this that program to execute I quarter looks continue to And the again, and Minnesota free was corn $XXX the have we're from on like again year with middle corn that flow Nebraska end right is protein pricing. to generate in literally to and the see higher standpoint, were third of ability ultra-high fact year to on notwithstanding So, as hotspot. and to the year the crop Southern from build opportunities the critical free things was prices well were oil pretty the as corn, and by cash to fourth in ending with over corn, $XXX generate of We obviously, is, corn begin the a some on quarter tight $XXX high in going flow in paying the over Tennessee, in almost we these starting next bringing for down cash over well. for

we've back seen that, rates well. some And get our run execution seen margin. we relief then that on the through and better as get a better, margins and expand have of and on continue will we've industry top also So, to that, allow to to

I at think, situation. you standpoint fuels, the and the look liquid all you from unprecedented when heating the a have that diesel oil of Then almost setup, tight of at or you situation, look

got of we're that the And well, that to it's realizing where some people You've a see some fall as in used, that think into gasoline be which from you're I well increased over to to perspective. molecule tightness and seeing structure. as term are we're ethanol starting see in offtakes needs starting

position curve, to we're you at see forward when not relative the going you're start So, look XXXX to I good in think much yet the really in to margin. a ethanol

is right view and in execute are to our where position we It's to that pretty Our think issues without balance any now program what positioned I the a on we're we're think continue don't fundamentals, cleaned good up the And start pretty I the can in no world to China demand more prepared think well in that as gas we if even important, XXXX. have near-term back is maturities. kick on for sheet. either.

program. clean wanted sugar pretty continue through we to to a we program, to We're of to we're a permitting. And up gallon program, or execute making in the as it continue assets. to just one, while in build sitting number on the said, good on other delays that MAX but all these some go we're think I position $X.XX So, out about from we're get waiting where can we our seeing Minnesota, DCO DCO $X.XX Tech after get contribution our

So, I position think very overall, liquidity-wise. in we're a good

Jim Stark

Yes. of the of Jordan, some your question just on answer to look. XXXX kind

said call, the end range this to top what million at of I back down in you year the CapEx our we the for earlier $XXX look max. at of and If brought kind go

build-outs Tech full $XXX disclosed a in those next which today. the Todd those and as have a we the million the and projects that be are, look yet for those at So, costs including out $XXX cost probably of certainly, on outlined spend. million DCO MSC going do, lower think we And that year, to somewhere that there we're when in I at to want range haven't is know indicated, building but we market we are what to the

very we we the pretty feel today cadence of and we good are liquidity position the we're about the about how guide. So, mindful where capital, see

we're it, have to bringing up not on run last here rate of been XXX,XXX-plus pro nine our which now add high would we tons I in think I speak, for the months. as over

lift has question, add first pointed So when also, into oil at on lift should year. the plus that Adam's part out next as we the of additional should Tod get bottom the line

Jordan Levy

color. It's great

and a to just you're and mentioned I'm has Todd, the bringing you curious online follow-up systems I Central startup given Just at know up. it how that's changing City time starts the just going. start MSC that starting But quick is been all? picking the corn that, line - yields on. comes the up what before curious if been for has trending oil protein start-up

Todd Becker

No. always about quarter I fully mean, running been view it taking up up. our a get and ramped and to has

go want we little - Day when for more. as is on we oil systems investment. share But a oil run One making X the as pay faster start now because commissioning, as to we trained today helping literally everybody the that's make at trained you we to what start other do is and we learn at pound, start $X.XX can is much to because Sometimes you wanted really well facilities. a they're to thing

we but to for In can built almost just alone fact, the return, these. oil that's longer start pay don't - be not we why investment a to

we get the benefit was started very thing during we then. the market So, the that up, of when on Shenandoah, start back which early is up great different oil

drivers on hard our pressing and oil we're for then protein that. we yield, after So, bring

spec. and week, this send silos it up said, making protein City and As to and just now higher. we on in products dryer we're Central our to continue coming ramp we to started started the And product, starting we the literally

once So, the ramp rates fast very happen online. comes dryer

will - waiting to around XX time we're the on. allow Vernon, Mount us it's the state in that turn a XX, dryer permit November Again,

And for we wait have that. to so,

running and in And a that for gating we sometimes item. of seen our But going and the the those we're meantime, again, and the quarter run oil you that that's and can we are just as fast, help fourth any have to - extract to continue really system segregate system, well.

base do is corn point in as bring played on the to in significant do that third we we believe as we what low-carbon that I as a when valuable. we What still very, get in our I So, said, importantly we're how in monetize see inflection this more what starting thing above really opportunities quarter record market. about grow protein, customer possess we're than even much to feedstock even can can can't to I continue XXXX know a we stream out. in very oil more - systems today into and basis waste I we have and And to that, is seeing the the

the meantime, to been constantly pull or in great approached every the is is we and partnering get a to one soybean at But continues to way, form this the renewable shape oil. from continue We trading what's in on on for premium diesel day are that come significant. or another. stream More demand industry

curve. learning them We're a was them up plants and can to beginning run. the start run bigger in very we're how hard. have MSC comfortable to now, harder going much when We're So, day, it more systems running every the we with than

Operator

Our next Inc. Co., question Oppenheimer Owen & from comes with Kristen

Kristen Owen

are So, fourth variety in just you're cycle to the protein with we're customer of to you poultry advanced think discussions And macro given conversations, times speak generally of in these shipping the that among terms I the that talked seeing backdrop markets, the them. partners? How swine, working can quarter you in. about a

Todd Becker

was and through And full of making believe this get you're you of and hold say, now trains of get that protein. confusion But getting this now show or you much difference. that vessel, up as them a somewhere somewhat quantity? - And you can with now running, to And up full or into with can protein It shows ship was engaged we're and dealing get hard ship would somebody to world It vessel, have of unit and smaller systems, product. engagement to and you in when XX,XXX little a start you tons people have we market, of other similar you Shenandoah but can a seen ship Yes. says, on - XX,XXX hard tons that when the us want product. yes. we're up well to the when that's bit there's the we

engagement. get sales built is full a that we now rations get in paid attention And can a system. included to So, customer highly across that have team you on to focused real you real

you plants food because now we shrimp somewhere can't have available, available, our you're to because South talk four redundancy salmon with a customer talk just can consistent or producer execute, volumes with what in volumes producer much nervous, we the running unless five to world. we them not a Southeast like saw So, producer or in And three very significant pet Asia can an get going of or aquaculture America of are or they available to or attention these vertical. now you the volumes about and

been we And still customer up have we been as So, we we has and deal still of market. to we want this the and trying you relationship has us. food we was to relations that developed want verticals. and we first with obviously you can our that But with. sure that get business get pet business, that it to with the our customers have and can something to it, And premium get one the show everybody know, redundancy, developed make when we've the at say, a get from -

even been volume. to So, And haven't is think we that I able of had we that's because take thing our the advantage. advantage to one necessarily that yet haven't

engagement. a XX,XXX of XXX product, hold need now month again, cars volume and that's a product we if or this need I of or product this comes a somebody need So, this have different and in tons now I can that cars XXX says, the say in of yes we I a month

support and internationally product of nutritionists, the with is but domestically, of customer use full have and not best. inclusion out just comes this it again, we customers, on And always So, it's development working a to system. how any product and salespeople, not team when that same

very for from any yeast our give is and standpoint to they're consistency ability of as very that unique protein well. is unique even or the system looking at level Our

Kristen Owen

for soybean for. given EBITDA if question track guidance, updated on have The that I us thoughts you can that related just I'm you which meal base, expectation thinking the that is you're time frame come XXXX, meal XXXX pricing given just of super how online? give helpful. maybe you across about your how said That's wondering you J-curve, pricing you're expected of in XXXX protein is the related protein that soybean much were more to to the off

Todd Becker

around question the take XX been announced Yes. look two chunky on next world very plants three export grow. and the coming was export quickly world. million XX in soy brought been of history kind to million this our the industry, lesson, years, customers, or view, five is you continue quarter of near glut last you And absorbed current protein it believe In a to people that's shareholders, a tons when back for meal year to building we've million to XX go or and market our crush that the we fast. while might to what's because in years, I mean a discussing river at and the soybean that the in whole we will tons might are based just lot of view ethanol will this for two. they in somewhere absorbed a our a etc. it have It's into that with it's very two, When projects. view, online on get our the But been

demand years on year, to years, globally, as X we've not And high happened tons. the bit million XX of million been tons million to an for as see demand a protein really world really has year the issue Argentina of continues XX a average, seen in it's we per terms at XX it's that last a million and some tons XX and in be million growing reliable to supplier. XX XX, and

year, to XX soy million three grows And quickly in that of it demand if market. our next five will year total adjust over on the notwithstanding XX view to and tons, protein million that tons maybe will years a and a absorbed. for between to XX get chunky million is XX crushing, million going somewhere each is we're So, protein to of the our that market view bring

in for the our meal, a different we are we benefits opportunity market we offer a added In added customer. platform. into other it them. meal wants while go ingredient an but to off while getting benefits some to today, off And are can other very of that price ingredient meantime, with replacement soybean replacement, in applications, soybean soybean We new applications their are provides want to price you, we to the of of in this not through a meal those continue the the that's market certain

Leslie, very soybean give or is meal. why this the maybe just different two three I'll of product of have And just than components key

Leslie van der Meulen

Yes.

comes distinct of to is think I of our refinery, - aspects the position buyer take the to product other list on So, into customers. as that a The our very which as account high comes - is we it a carbon, management out it have on

as it a of an So, comes we're there our where looking like products people not for lot additional nutritional product traction are out, getting advanced benefits. only but also

on question had address the to you the J-curve. other Really

get at corn into category disconnecting vision higher look and meal our complete of from base you're XX%, really it, XX%, products, the all where into looking other getting meals, the concentrates. you you're you're from a you proceed that product system. protein same the to at fish If meals, And as can the gluten soybean come

additional a it fermented, - like extreme solvent investment soybean products So, the requirements our And lot for meal. are extracted an there's a animals but perspective. least, not relatively these importance fact that in pre-digested no is state to from last of products comes relative of So,

Operator

Zaslow comes BMO. with question Our from next Ken

Kenneth Zaslow

a be about build to through how walk think expectations us a I is, just I smart mind consolidated - ask all You of went XXXX that able questions. Could pieces. lot together. just to through on EBITDA? two you isn't you One can my

just for about about that? thinking think consolidated out You us, just kind worked of EBITDA. do I kind of that XXXX How

Todd Becker

oil that in be range There corn at higher a $XXX potentially outlined through what are pound million range, definitely we in said, last overhead we an last will and this to and the are at we opportunity. and some range conference some in on mean this XXXX, XXXX. If pricing to the opportunity an that to moving last Ag prices upside, the that million $XXX a can getting opportunity at maintain million $XX pieces, we about of $X.XX the pricing we to , that XXX obviously I $XX Yes. basically $XXX $X.XX million watch we million to there's did, to $XXX XX watch it's to MSC that that range presented XX whether the have for kind $XX place midrange ranges in conference MSC, $X.XX. corporate in range. of all was million million Corn on opportunity. oil same there, energy, or downside. to the XXX is within but typically of Same

low going somewhere XXX plus of ethanol we're XXX You think there's to that. to and potentially our range. and higher could opportunities say plus any - even that that at leave of a doesn't of high than go But include And in kind I all. that

very again, QX that's at ethanol I the be say, And margins as and molecule oil that I is a was will undervalued to this mean, while think and in already. look corn seen starting good ethanol is case. can We're to we've is paying attention to little bit as quarter it you a before never not recover the in those clear positive it, move. curves curve XXXX nobody start the and see market

come we're curve the - potentially So, you over the - these all our going to still take ethanol the forward going give from in, negative not and don't ethanol let the be while decide where to is necessarily time that we'll is view that will average. positive you we numbers, view we in

at XXXX and our - XXXX leaving XXXX, to we're So, intact. guidance where relative today that's and

Kenneth Zaslow

getting is it much premium pro how relative your getting your of you portfolio? high high to your pricing on you're consistent And a then pro, of - much a on and are premium how across

Todd Becker

Yes.

different. little bit customer So, and prices with application, every every it a

of plants, what and compete could side a MSC commodity the look and protein. when So, at run lower our have more to harder against make we our we we plants

we $X.XX on So, get. we to not would we going believe to product. would thesis, we a you now three - guided long said move over years. as significantly or to on investment than how We early time Shenandoah necessarily And premium we exact in it you're gallon on this us to can initially take to Wood margin product gallon feel that the price base the make. confident our We sorry, we markets those and River, now to into It's demand. it know could much $X.XX know higher do we always XX pro uplift And pro. it's you over going when is produce $X.XX five very when the discount didn't do $X.XX how So, a XX we is I'm it did in in

well. So, we as reached that point now

we want. So, at when every protein that look it, price we'll different they the market depending on

we'll to replacement it's back against still corn, we're are to what possible. and run upside kind - where now little slower. today a pounds a harder outlined. where go today to bit bushel make those The three a out, pounds a of bit it expanded bushel, that it meal market, XX protein, we've when base plant and or the volumes it still XX comes even we've a The making competitive margin So, of collapsed we instead lower of margins somebody that out be XX%. higher commodity just was can now we'll four we'll are bit it's again, wants opportunity against is XX of XX%, for little a now margin market. pro And XX pro at protein if run If XX% seen to will get a soybean a down little to basically XX% but

Operator

Our with Sachs. Goldman next question Samuelson Adam comes from

Adam Samuelson

before. points counting. about and was to clarify Todd, we're maybe hoping Sorry of not some sure just those double I make guidance

oil. uplift gallon $X.XX about reference talked kind but to it's of you So, corn also to from per $X.XX high pro, distillers

the plus just And clear, million been gallons XXX purely want trying protein -- be on to $X.XX protein converted. or just high - the high guess, I'm value, that I I value to $X.XX just I'm oil it clarify trying So, is is corn that's to yes,

Todd Becker

corn wavered across pre give pounds clarified number you on I I MSC year. that based a system, never is it. No, million our XXX that you. we Yes. the from this. The we we've can we've answer for to volumes oil make mean close is which

figured cost So, a if corn million you it's in $X.XX XXX pounds, oil. $X.XX the to make we to take pound

year, pound, and will if that's than the a $XXX times $XXX million bit to to high market $X.XX approximately a side. is opportunity XXX So, $X.XX take $XXX that. pounds pound So, million next something little maybe that, the of - revenue like $X.XX And EBITDA be less that, on off about $X.XX million, $X.XX XXX your a million,

$X.XX do you lower do side, it $X.XX you the a $X.XX could On if obviously, a gets to or pound, or math or can pound. math $X.XX just your your

is sell the proteins oil. and and now meal we're our the what corn these Included with this a earnings that oil value, potentially systems, - something, oil when will have value in see our will out. today, and now we're it's we higher not to on the shrinking So, And MSC higher in always has and been since move we a between spreads with share. a like that oil margins. distiller's MSC starting feel share high-protein even non-MSC systems seeing even those But in baseload a with run feel corn we that confident of is and at prices, soybean right just now times, oil better that we corn and obviously,

in a both places. it's bit little it's So, -

oil protein giving actually a including really different outside MSC our but separation we we're you that included oil system. of an you, what separated not just and be just is earnings separates in products, a than of because It's lots would If oil higher protein. separation today, MSC protein including system

Operator

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

Eric Stine

that's or Obviously, Midwest it the maybe one made level carbon credits, that that fields, progress see local tax on Express, kind in digging counties, pipelines notice state on or or being just in seems the pushback through there do going the hand, versus but So, got of the etc. capture. you've like

maybe just at push the your forward. believe, to and in capture carbon starting contributor and this look a about pull on But I as optimistic going here thoughts obviously, XXXX. you be So,

Todd Becker

area are bill, company, interesting Reduction our - new our absolute an the IRA Eastern plants first let's well. in pipelines is the the as significant protein, on game that seen of And make a as will even changers only look opportunity never provides is to to all, especially it but fact something in it ingredients I The industry here. low-carbon from direct our out decade. so a and that provides things alcohol, inject industry, or and It's alcohol-to-jet significant, finally carbon where at or game oil we and the to our fact move Yes. it's are around whether being the in to can the These capture think before, we've in invest It later that not in there. well, about a we - alcohol it's look we the pipeline that are economics think, Act, an of behind. at in so built economics and whether something stake and at changer Inflation it's what's to

immune state to And going continue hundred to committed of pipe, a to our, to plants are we've that's eight, you states, can continue holdouts at our least farmers to that. just to will on of that from And make think look state. look get at just pipe from with with that carbon and ground, locked sitting we we've today. I many higher get out what's get just been when and build because don't pipeline, continue to kind our some in going the progress. of be carbon through you percentages couple to of trying and allowing of right-of-way to what standpoint miles continue commit at their that go all - successful to miles plants at or of of it's higher support with the in a six not there's Iowa our build a down our XX,XXX just say to great when to of - on they They There pipelines of to the and many, So, always you pipeline.

opportunity no building this continue just chicken guys and these this out drive for U.S. are a sequester egg agriculture So, ultimately ethanol than and is for the these of and pipelines, try and but bigger farmer, plants to there industry. of of that been the bit to for a has carbon potential

it, it's hard hard be what available XXXX, we're So, and there XXXX to you act from sequester to a that our available money, economics energy available if because for imagine for excited even fossil we and this we lower about - at it's is through carbon. for But this your look very because vacuum you us cap, not it's numbers stare and XXXX, at put It's this in to to you now going even when incented the you're it. us at fuels. just beyond, look out

there's be the significantly in So, numbers guidance, we lower. When produce through fossil production do power and get we IRA And for out those to like do at be of decarbonize. will capture you that of money heat us. CI to using you for can you energy to own combined your out probability look like all that which credit bed systems, fuel to high really fuel and alcohol do would is we can XXXX there like a nobody a alcohol-to-jet that it reduce opportunity if an things if our and XXXX be fuel things jet company in - success is XXXX do The So, and incredible available do are scores will is believe your successful, to almost commitment the This industry of do clean boilers, things this. site. cogen when put things go XXXX ourselves, XXXX and like you believe that and under fluidized anything this because

on that And a high to opportunity their will the pipeline chance of a built. great for carbon. I we're that We're it's probability success committed high So, think project there's us. sequestering - get

Operator

Salvator Our comes Tiano next Bank with of America. question from

Salvator Tiano

have about Yes. how system. to question manage - you your little ethanol One just what bit a opportunity

if again, not year, next the be again to options losses? EBITDA do let's you of kind given you brought your great and mentioned if you maintenance I'm was, what just were this forward lot corn You extreme shutdowns say, this actual are facilities? a the where wondering, of would if systems that how turnarounds. happen And avoid may to of harvest considering basis happen have manage to

Todd Becker

I unique, ever we've a this - I unique Yes. this unique I mean guess but inverse. was such more mean, seen, than

You XXX not every longer. have that. States. the And lasted our or and United adjust to make and a through they running decision in the not day of Minnesota, want ethanol of during years off happen a break that This inverse what's they inverses break high decision in to on did the history, fast, lot XXX don't a Fairmont, plants Nebraska And and be any time. you square we industry run just to to year the be one to over just In in the one given and and on break over. in basically basis made. the levels hard history,

see in for Now fact and levels positive ethanol contribution for from that this QX, oil basis still molecule for low the point. driving made made we in the the carbon is are at need we our product be need to corn be oils that rising the as and see margins QX, elevated we're and and need the this to before

well. grow have couple years We year, States. So, need good United it again? to need need happen last off South Could we it to was than come to corn we a of this America unique season. Yes, in growing need a well as - well. better We need think I as to get to situation. the the that We grow

to got But we've closely. helped system the backing that some watch So, corn system. weather up little river into the a bit

and and we're China that their we use start next economy not reengage this can get to gasoline. through think to to barrel and at exporting industry, build only get it. If an going gas as running we I and get we pace - year, driving stocks in in their instead own million that's season winter and not a do of

going place versus plant we're the the but increased up I ability most shut could our have it. think it's cost of had of through we're the that, that we team a harder drive top we to middle And doing. great everything it, have these on of ran of seeing run have for with or before. operations two, plants in bringing to in a But doing of setting I we all ethanol we the up rest for it back situations part. have probably in to than ever just XXXX we're opportunity mean down through cost these the that

because to QX a going driving a system run XX levels from and of our We've could to been how by now here. we're ourselves our to so be should product had all one in significant and hard but running is rates XX just continue turnarounds to and we a we that. place, do our we run margin bringing unheard record these days to negative and back positive oil it our going position with But to XX QX And did today. of, were to have we're in with sugar. run get almost going quarter to it's suite we're we're $X.XX plants, run this would going maintenance drive last and basis under forward track the plants harvest of to drive when we're gallon protein, And run margin hopefully run going advantage on really to take ourselves of

hit we we're and was sugar approach corn XXXX yields And a as then so, place protein our numbers. scenario oil online without and board worst-case to on XXXX coming without this through pretty with and in yet protein, fully good

Salvator Tiano

each the a try $X.XX idea XX. to think I were I benefits would with to of expect, something what your gallon I nobody wanted like the were we Perfect. into the it. And to regard think new if that a if under Okay. ask, also do to - the But that with put for would is numbers credit CI in years, you to believe point mentioned that, deal IRA is few you a

for after is CI plants, So, some could can based on you to ethanol of you try numbers and this do, could to now we actually happen ethanol what kind right XXXX? believe guidance score projects what put

Todd Becker

Yes.

But I on on are carbon it into you the at of XX look look think to ideas a when it Argonne by just under of possible. XX plants intensity. and put it what starting is sequester a forward reduce XX start some at you you When point, you the as points. we'll that our GREET, our pipeline, above art to

a you two combination put and and to one you it's reduce government XXZ, on points a basis kind they're top get and heat that on XX in program our all to in of that, is But we one basically, program below and do per there, X your your XXQs your But there's this view payback getting intensity you the power incent you by subject that and combined maybe you share XXZ place on is to of where a has $X.XX like do - a and this. reduction. of to of again your can a pipeline $X.XX point we our the all point to capital choose XXZ, that U.S. year is you're choose because partner. with under which So, can things interpretation. Obviously, XX

carbon On you things. could top lower go doing of on intensity your by other that, even

program, shot get But program, your and just So, And but California benefit ship upside to low there's have CI allows you even a whole a at product. such not ship Washington, just that's into or over California, like U.S. California, fuel. credit, point to carbon and States market from there. production into to the you United that's get Oregon a you fuel green it And this really - that a if XX, California there there, game changer. is to low X that's doesn't you a if that XX great, - that a it's range carbon

So, of of dollars go millions we're talking opportunity in hundreds the potential to of of after.

program that's and from our think going has first was business our of which little the sequester well partners to went to bit a to really in pipeline ago, be XXQ down up as This on has different that little significantly. in reduction I set a succeed LCFS, only partnering we help as us $XX at as with well place the carbon with couple in we're the when come a to as a carbon succeed years

Operator

At you. for further time, CEO, now there closing over questions. this remarks. turn I back Becker, Todd are the will call no Thank to

Todd Becker

for rest we low ability shareholders. starting opportunities, forward markets, the to the Thanks, that we to quarter that bringing not to to new diesel to for to that quarter we fourth why now fact executing speak, company on ourselves are carbon the capacity, in feedstock our tightness chain it projects and during approach deliver strategy maintain able low we major carbon is these to developing as biggest laid and we as and a supply we and Yes. have with the but our strategically construction we believe going we a have five of that believe wanted the starting the and opportunity have, under XXXX want monetize we five and the all we ingredients, XXXX. That's quarter. is renewable markets, unique put on COVID be XXXX, been projects we of we'll Obviously, out everybody. us And the want with rest are delivering on dealing as the provider we've

that, to of that's and more for that aviation financial XXXX think to a of will into first started we very, really pathway continue opportunities top well last us I the any on, really half is thought plant. We the platform our just capabilities out made and also be decarbonizing to on lot sustainable of will build opportunity, fuels this. effects low-carbon the don't of producing glucose And believe decade. alcohols that when as our significant as this on we us have very positioning this we And know from dextrose well

very the into We're we're support. excited in financially your that We're as financial opportunities of we you. about great great sound. we're QX a position appreciate are and we going into us, a Thank launch XXXX, place. So, ahead in and

Operator

the Thank today's you concludes conference. program. in This participating now for

disconnect. You may now

Green Plains (GPRE) 3 Nov 222022 Q3 Earnings call transcript