GPP - Earnings call 1 2021 | Green Plains Partners LP

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Operator

Good morning, and welcome to the Green Plains Inc. and Green Plains Partners First Quarter Earnings Conference Call. [Operator Instructions] I will now turn the conference call over to your host, Phil Boggs, Senior Vice President, Investor Relations. Mr. Boggs, please go ahead.

Phil Boggs

right. All welcome, Plains and to everyone, you, Inc. Green Thank Quarter Call. Green Plains Earnings First Partners and XXXX

today's are Officer. websites. on find Events and slide Participants & call available, it Patrich Executive and presentation on page Simpkins, Officer; on Chief Presentations the Chief under you link Financial and There investor a Todd is can Becker, the President corporate both

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

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

Todd Becker

and and for morning, everyone, thanks Phil, Thanks, today. joining our good call

today, our phase first our our we high-value transformation carbon earlier XXXX quarter lowers that carbon in our of total our the truly every been for intensity transformation item company with release We the oils and which plan products. the and the sequestration technology quarter. veg The funded proteins, as a events across executed plan, capture combined highlighted key most fully technology, during has our is accelerating sustainable but becoming path we important producing toward transformative agricultural of of company, sugars, clean

each during key several the back will and call. out the come on quarter, laid have later I verticals We to

to of extinguishment to results. financial raise. related notes the share of in $XX.X sale in $X.XX conjunction facility and charge inclusive diluted We loss capital related of the with the million or $XX million Ord to of reported gain a the our the $X.X quarter net million of a Turning convertible

gallon, Consolidated generally up the average crush margins underscores million, margin to per the year, prior Plains the that market. $X.XX changing Green spot our in during Achieving excluding our daily in was ability the gain. from outperforming businesses. X.X significantly daily the EBITDA available exceeded $XX.X Adjusted quarter to flexibly during the quarter $XX.X around million results averaged market the us adapt

could with. but volatility contend The quarter is we exceed second something these results, remain prepared market to

here to vortex our is gallons execute hit Production What during due X.X, quarter as beneficial is during we a transition Green much to February. lower really were is important that the we polar X.X the as that U.S. the of platform strong plan. Plains

trading in Our racks, resulting market segment fuel distribution distribution merchant well platform. also driven gas performed natural ag and and improved in during energy our our quarter, operating results by volatility and in businesses storage year-over-year, the oil corn

our high-protein to technology exceed and across portfolio. Shenandoah, ultra confidence deploy ever-increasing oil continued yields, corn gives higher we at as us business protein consistently further the yields Our increased delivering this River and Wood which expectations locations at

pet, swine feedback highlight it ration quarter, can product XX% how regarding and pet used. a customers, and production the substantial partners. dairy, this During be food in product end development. we Achieving indications with on this very aqua, delivered has to produced was full-scale positive poultry in us are protein Early a and resulted including our for

contribute sustainable growing to that a excited high-protein for meets ultra are We feed solution ingredients. the high-value need

to bushel approaching achieve recent you yields seen with period, that also and oil the to pleased X.X weeks, we sublots later. expect on on corn get am the have pounds XX% yields announce Quip have pounds we and X.X had during have low In in consistently we'll several well, of above to Fluid protein purities X we that the I bushel MSC for system. as protein back pounds more seen per the

is exciting more The has can that the a to is great be of the way been biorefinery past, this significantly variability applied in distillers premium of positive transformation post-MSC rations remaining reduced distillers Even consequence product at in our in traditional our grains. platform the a demand, slight yet and another into than pricing of future. through different

nicely, Wood quarter. during progressing third anticipate the River we at is start-up a Construction and

loan to transformation. term million in $XXX through as positioned our our we financing balance cash quarter excellent on transactions, We raise in including All transactions, and the raised MetLife. all, Our million draw and are closed convert in capital concurrent sheet our in ended we with equity remaining delayed is shape, well continue over million $XXX with well accelerating $XX the as on well we that with objectives transactions BlackRock goals Successfully and to communicated set the out. million, transformation Again, fully a Ord our retiring for have on our debt. protein capital of our has $XXX these was facility $XX and to of in have each achieve up the monetized we over while shareholders. structure executed the has quarter, million us laid and funded highlight

quarter. is initiative up the Vernon finish nearing as line recently, Mount and track is be construction in the Madison started completed XX Project to on third at Our

GNS We York. our the continue plans evaluate to upgrade at to complete

decision to the quality started the used as a York already in made. USP been special contract final No market. as have production has volumes XXXX We is

Our around also our oil which main our corn technology focus yields. across platform, accelerating benefits is going forward deployment protein

carbon our great sequestration offers upcoming Lastly, promise. initiative

we quarter, equates to ethanol, produced million which of a gallons rate. the During utilization XX% XXX

Plains strategic XXXX. minimum fallen management wider more volume Storm benefit lowest Green data has protected response Partners macro to country industry is While transportation. stable below as ethanol into the from people Winter distribution and stocks primarily was risk position quarter improve structurally continued in up by level demand another favorable to be led as did production have barrels Uri. The by Gasoline flows long-term million slightly recorded lower, to took which comfortable cash continues commitments. enables season to financially summer are since surface quarter driving opens vaccine and coming as feel actions traveling we XX its our the our

we delivered on During including transaction. reduce Ord million the to of an repaid debt and from additional $XX.X $XX the strategy million debt, quarter, our

Now both I'd on and to call the and each our Green Plains turn like to financial to the later over plan. vertical Patrich Patrich? more Plains Inc. about I'll specifically to our how back fits review Partners transformation Green ongoing initiatives call performance. come into talk

George Simpkins

same you, by as with Thank down well $XX.X as the rates change and Consolidated run energy year a the $XXX.X were from in ag lower export everyone. quarter, production in revenues lower our morning, or XX.X% million good Todd, period ago, the driven both volumes segment. being and first million

rate our For for capacity same run year. XX.X% to XX.X% the compared of the quarter, run period last rates were

our the related Plains $XX.X In of to of XXXX Green partial sale a inclusive $XX.X million of net facility quarter, the charge a loss realized extinguishment of first share to notes. of million convertible gain per and million $X.X $X.XX Ord our or related

energy the which in excludes for XXXX quarter, was compared change consolidated in significantly period was million assets, and driven improvements primarily in in the EBITDA, million year. EBITDA of by same our the on sale gain improved prior XXXX. contributions crush margin to adjusted This ag Adjusted $X.X in $XX.X performance from the of for the

of attributable onetime reported for was with quarter, $XX.X the year, change for segments charge in million adjusting insurance QX of was interest with the expenses million all to in the the $XX.X interest For $XX.X of XXXX, was note million year the the earlier, line Consolidated convertible expense to in this the prior costs Quip million inclusion compared company for to expense at prior however, transaction compared SG&A $XX.X the our year. higher generally. to $X.X related million Fluid described

debt to on that convertible our sheet will balance at accounting expense interest. now have with -- records longer point running accretion which a adopted want our also a out the I value notional include and noncash debt guidance, through convertible the we no new debt, our convertible

deck, capital, provide working prior $XXX at net X sheet cash $XXX.X of of a end million to financing Slide compared of had of year for quarter. our capital we first investor and of On quarter million working highlights. the balance We our the summary the

in the facility term loan. position along liquidity our approximately cash available of $XXX.X of also delayed primarily the consisted million $XXX.X amount the equivalents draw cash credit with under million cash, restricted $X.X end our and under million Our This at and working quarter includes partnership. revolvers capital available

balance high-protein and for including first related allocated Project was $XX.X CapEx of capital, $XX $X.X CapEx a of XX with being million to million initiatives. primarily our quarter to million, growth maintenance approximately the

XX% that will high-protein expected for over sites. well be For as of on to including expected that in CapEx million between Wood Vernon million, $XX Mount River, construction projects be start about projected with and $XXX quarters our the is X capital is $XXX XXXX, $XX additional X to roughly spending the of in timing, the to of balance technology and next at the Maintenance depending QX. coming completion as buy year million the million,

million XX% For lower volume was of production gallons result Plains during as storage rates we first as Ord. gallons Partners, from million down XXXX of Hereford quarter as Green sale plants Green throughput the the Plains had well facility our and the or of XXX of which at XX.X quarter, at a

in throughput which after was the amended billed sale the of EBITDA partnership the million the reported Ord. quarter, from other reported of to MVC XXX.X in partnership the For an mainly at due ancillary gallons increase $XX.X X% of Trade adjusted quarter Accordingly, up by slightly million level, of throughput Group $XX.X to offset quarter, by the slightly GPP, a rates charged the XXXX, million first for the costs.

quarter cash million, coverage EBITDA to For distributions basis, trailing coverage for were in $XX.X ratio million for X.XXx flow $XX.X X.XXx quarter compared first $XX.X flow for ratio million, of and for was distributable million XX-month quarter was declared and XXXX. XX $XX.X months. distributable the cash adjusted the On a the the million the a was same partnerships, $XX.X resulting a

required during excludes principal any payments the quarter. amortized Our for coverage ratio adjustment

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

Todd Becker

So thanks, Patrich.

saw back was the to of protein and of transformation were first oil look and quarter, at we of Green sugar towards achieved accomplishments first we started. X.X. clean development technology, corn as acceleration yields was our So execute, Plains required purities true our facility the higher a The the acquired,

largest future we in world's potential capture Solutions to the oils about with Additionally, the XX carbon COX potential. of are annually. Carbon sequester our develop capture we to and have initiatives we with the and carbon project sequestration of veg excited million and capture tons up protein, partnered combine to Summit When sugar,

Our and of bushel a help corn. of verticals interrelated, the lining up is business maximize they achieve a are can us from can each value that with number we

based We around deploying solutions. are technology whole kernel

will They play we it a little our beneficial want our that number to technology a Green and to in be to protein time projects, and future it Quip did as and the have they in business Plains and Besides role model. patent spend patents owned licensed. Fluid I applications platform total have ways. are XX on important a great of expect

patents fractionation. first to continuation one for in is recovery new patent more the during they the MSC in new of quarter supporting Brazil, corn One and one issued quarter. were X in their Technology; Plant filed Canada patents addition, market-leading process, new and X In relating XXXX, wet had exciting in the oil Flex that protein

for chewing the issued fourth product. from to gluten protein patent ZIM is ] from from gum [ is this was corn ZIM to make meal. ] an [ additional difficult high-value, protein from protein the during used traditional MSC and sealers of is everything a low-value Also XXXX, food quarter producing

base in validation. and While it this very map we testing our for road R&D is development, to have XXXX more some do on early

also various Quip underway and multiple studies third-party Fluid stages several for technology had engineering deployments. FEL in X various with projects X

deployments in Ospraie Finally, late-stage My is Green we IP X with and discussions to and plants. milling Plains. technology wet partnership that companies various of related through sales they BlackRock, dry are and the have agricultural believe we in point the new global here several their of leading

construction and Mount which our sugar XXXX alcohol, we protein, Now on be specialty should important break Obion MSC verticals, to on is our I'd protein soon. track to very ground guidance. and accelerate. to already the through and River covered beginning technology are walk some specifically, Vernon carbon In like deployment that of Wood to budget, and continues of oil,

projects build quickly conversations to to which we if up, speed contractor in a final them and more ability working this are general perhaps can we complete We ourselves, these to believe our important up. than wrap choose this we quickly to milestone are were

want schedule the technology we to that the others our earnings in sales diversify of to add their partner, order channel protein the show a to announce interest Once choose industry we also plan streams. builds. and strong to Fluid continues from Quip

a this X plants in a have U.S. achieving River plants this Fluid with proven U.S. X year, to companies Brazil, at We more speed success other Wood and No X Quip technology sale. and deployed in previous ag production. starting up market and tech

oil. to to oil Turning corn complex veg continuing The accelerate higher. prices is

deliver structural technology it by more. a can helps increase oil MSC or corn as believe Our we XX% advantage yields

long-term of X.X move which while renewable prices is to We continue continue margins, parameters very pounds is structural and per operating increasing low-carbon critical our believe will supply and piece and us industry to for the gives refine consistently, we helpful close. an uplift diesel Shenandoah higher, X.X Delivering intensity the of getting of very we feedstock bushel are success. achieve to a a

our tap believe the be a doors milling to lessens renewable growing flexibility we produce Quip dextrose bioplastics government The from market dry biology It biochemical, technology corn sugar, significant once oil. and valuable mill upside our corn the to synthetic opens not a sugar biofuel In clean disruptor. platform of but unavailable while on to proteins dry could we reliance policies, potential only continuing Fluid produce for adds the and space. true enables this that to technology added new to markets the as industry

with opportunity Clean biofuels value sugar our an is Green production. provides to deployment Plains of outside unique biorefineries and

is Center CST shipments. installation first Innovation preparing commercial York and completion, are we our our nearing for at Our

bushel to future. created customers Our end cash value goal for to believe by expanding facilities select strong, near and is the of We of our existing full-scale deployment sugar to with one innovative this helping these corn. work in from stable we of margin of clean can a flows, technology a production, develop maximize the

a process same the mill. products this has produced Importantly, which traditional is intensity, clean carbon sugar at a than lower much wet

In most the carbon proposed a quarter during of to locations on on into be pipeline launched carbon focus exciting we sequester our included pure the announced geologic February, new COX sequestration. our and verticals One growing X formations. is initial to capture

partner be connected founding on the As LCFS we of will the company, generated benefit of the a biorefineries. to development pipeline each we able of top the from income believe at

being the early Southwest success bio us last due into allowing the week Iowa of X carbon to the rounds, project, with combined to with to and We nearly to XX% of are announced excited have to it that our capacity add Nebraska, the carbon refineries the of of committed to more the is improve opportunity. pipeline pipeline a expanded our great each intensity this or is products score CI of opportunity these

want as formations. each, mention for we to are X Mount this carbon our this proximity are locations, remaining did exploring on potential injection we to well as due as well. sequestration that I direct Vernon, potential addition, and candidates suitable Madison their to geologic In of Obion but path the to each explore come More this,

gone on past XXXX calls, them I it's While of targets the our we once revisiting through again worth EBITDA think couple do here. have

million deliver anticipated to $X.XX capacity, the in is initiative $X.XX gallon the over add million is to years, XXX protein potential million the contribution baseline, per EBITDA. next $XXX protein to of has of couple $XXX gallons EBITDA as with to of Our this deployed ultra-high a annual

over have on able results to been up has long-term full believe and be cycles. $XX XXXX gallons more this since the million is seen we we corn every improves, believe of are prices XXXX oil With XX and corn we $X.XX contracted improvement achieve the this we business EBITDA, we adds contribute some premium lately per grade nearly $XX already these compression depending Renewable incremental economics seeing to go fuel a through as will capacity, beginning and in than alone. million that contracting already volumes alcohol in specialty contributor. pricing that oil that significant million improve will of There pricing pound have but

gallon once capacity a we million ethanol our in coming $XXX to XXX $XX In $X.XX EBITDA add million -- minimum million of of capacity million the per convert technology or sugar clean gallons sugar, of XX could in if clean technology years. of place, to

Finally, XX-XX to uplift $XX a fuel $X.XX conservative if split we low that with committed gallon EBITDA. of our standard contribute due consider million capacity carbon incremental our can only contribute -- a we XXX potential million premiums pipeline, over gallons of

the $XXX comes carbon crush the track achieving a there improved and these commodity to we of more considering stable moving and gross solutions. opportunity This on combine from puts more you nutritional sequestration and percentages, up low margin when margin the over annual much flows So as earnings predictable cash rate percentages with are run to J-curve online to move as protein track gross for traditional from us initiatives, a up single-digit EBITDA on double-digit and we XXXX margins as by million and processor. prior

legacy this, from as enormously X.X Added stable to well. our are certainly business all economics helpful

have In value platform our speak, nutritious to The Ospraie that Hayashikane as Optimal our markets. an to to of low Syngenta ingredients partners renewable late-stage conclusion, value to development Summit and we we partner more many under Novozymes to products is to from carbon, matter just and wanting impressive started. to our truly pet to list get sustainable help of all high getting food

heading XXXX, sight. inflection Plains quickly Green towards and in in is point are We an X.X

as is this grateful that support for their it through efforts of are dedicated complete the our transformation. employees We will we

ingredients to matter, solutions remain every on execution kernel for whole delivering day. we we As focused look that

session. Q&A can and joining for Thanks the the today, call we start

Operator

of question first from from comes Montreal. Bank our And Instructions] [Operator Zaslow Ken

Kenneth Zaslow

can that's was and the going rest of portfolio? the a to relative think break you the I margin is, to there out questions. if where One go what couple about Shenandoah, Just of structure

Todd Becker

Yes.

general for year $XX the based in to for XXXX as product is we roughly. over X then initial XX% volumes Every gallon meal sold well, when a $X.XX $XXX first last terms, XX% years volumes the we pricing Shenandoah the the up meal soybean and So the soybean a between $XXX for on and started somewhere at premium protein. over

between so to somewhere XX% over $X.XX distillers $XXX current to grains a at to and a protein product. premium $XXX $X.XX land somewhere gallon And between

Kenneth Zaslow

what is I if your gallon, you're So that -- that facility? what it's in -- put to per relative the $X.XX gallon profit the saying is

Todd Becker

Well, initial gallon made that EBITDA $X.XX million. about at or to gallons what the sales that a Initially, we and is XX again, makes year. $X.XX margin, were to million a said $XX $XX million a profit approximately facility

Kenneth Zaslow

just is for there's don't Then I top that's anything too? just fair, no you of comes just or time, understand something no over Okay. that the the Is not that -- on Or kind of the equipment reason is the I that? and maybe there revenue Fluid and from whole sharing ], [ but don't this relationship, that into bake a it that, there's model. just -- understand

Todd Becker

Yes.

Quip that's the sale we've business. they a -- reported partnership. that produced, Fluid the because Fluid But bought returns Fluid margin Fluid once the does of Quip made. the Quip, from streams each in will be make. the the plant partners, package. for So on ongoing general, now obviously, each But and full that from Quip acquired our sale purchased benefit technology makes that package that earns they've they revenue with their And Quip Fluid have small in

Kenneth Zaslow

And my I projects would X you play flat And done what given completely margin, but is, believes going just what question I'll would you of then margin. type are if In projects be it X. were showing EBITDA that, be of and Just and X let's nobody a nothing to They ethanol what XXXX, give some changed. can us are know margins that leave ethanol last Okay. were context assume out? just assuming then done. how there. and

Todd Becker

operating, with half of XXX X potentially gallons. which we'll in about or is XXX we where think will think X be million have million X our to We plants plants Yes. That operating. platform XXXX, to

of alcohol, we on our X and just we X we based million for can adding coming of assume $XXX then in But that, X the start plants then that rest calculus And on. 'XX on in comes really on then put the you when ethanol really just we the mid- in late XXXX is 'XX in obviously, think and And if But that and just if inflection XXXX. on. dates average million at come 'XX. point inflection X a do kind million. it's is on gallon -- rate margin -- with top believe of on for of to X we business, XXXX base run the $X.XX oil corn a turn a completion $XXX when we ethanol to million that's to why that's forward EBITDA, $XXX when base basis line And see on $XXX kind protein it to traditional model XX%,

Operator

question comes next from our And Laurence Jefferies. Alexander from

Laurence Alexander

capacity Can a and opportunity bottleneck there? out facing? of be the thinking you fermentation investing partnerships sort that that dextrose clearly industry because little you how to the in some would a is of and flesh you're the appears And bit consider about bottlenecks

Todd Becker

mills Yes. with potential from or that involved thinking wet customers, working buying we've it customers want with How traditional we're either where dozens already carbon be dextrose. new our technologies to of have is been they've that technologies been about low

capacity. and else you And is or of very look at or important. one And fermentation is something that, the obviously, like -- whether lactic acid PLA so constraints, fermentation obviously,

what fermentation but need, than what And different fermentation then some may is others our be also need. our

we're just be and conversations the where potentially which customers work first to our do can't them, is that to various shipped to which to at their want market in in goal because a companies we selling just customers And we've is with stages biochem. want just all to the So product identify of commercially development. confectionery product not -- well. have to way had co-locate, they're with to We development going all as customers want

it to as well. sites well the going as the clean of deploy we sugar co-location shipping technology it's opportunities so potential customer a combination to where the And at as be

that a We also very is know, as and obviously, expensive. it's you said, often bottleneck, fermentation

sugar We have you plants technology, scale need capacity as fermentation when will less the you have fermentation capability deploy for available, your especially at well.

think in evolution But sizes in carbon as we're well be think as just driven customers to some that's with and right intensity times something well the access various there'll on that I retrofitting their this to product. have now, manage in our various low And by So future. working to we'll there be on I strategic mainly going of it.

Laurence Alexander

And if then pipeline? what's time a with considering pipeline, increase to -- on the COX economics the investment frame, capital taking any, of your that

Todd Becker

Yes.

they're look needed, in through I from point had the million a basically shovel-ready raising there the have pipeline think then think I to they're to their up everybody producers in achieve -- decides continue amount had Summit full round project it they're still capital market. tons significant terms from will final once the capacity interest of XX the ultimately is now, If And of they their had very or this to to We've get close. right of already, process and -- has gets of capacity. signing I to to Summit engineering in where emitters then at ethanol the permitting. significant they think not other next

a And think has mainly capturing I be on decisions will Summit very then industry going project. continue capacity have to that it's project, to how want to And done invest. because this in invest great we from job point, make other to sign far up. to successful at we significant obviously, rights in of terms the a And shippers

Operator

our from next question Goldman from And Samuelson comes Adam Sachs.

Adam Samuelson

protein. to Ken's helpful the of you response and tons dig commercialization to more on the question of Todd, bit little So maybe XXXX. hoping I in how some for you a And sold gave on high color was kind XXXX Shenandoah

road, be think think think value protein values As able kind timing opportunity Shenandoah we Mount at about incremental be offtake that agreements? high to much higher as the of pro we you've Do the able -- been about you J-curve? and replicating and do think cetera, move those -- down about in about you more capture have et when kind protein high content of Vernon, of commercialize realize those your that the could content. Obion of Wood you ability How would to that just the at thinking at real protein and actually you River up how premium and to the markets we sold

Todd Becker

Yes.

have of we can get a lot of state. at We made think We've move learned obviously, produce point a that we lot mechanically biologically, now that both a pro. a the scale. a of confidence We've to and proteins steady We since lot. to XX% announcement higher progress, can up protein

of going things we've that it's of other from learned come things it interesting. of to and from mechanics Some have that come are biology some and

poultry, swine of dairy, that with whether it's about, aqua, different We are or working those we customers of each have and in every levels protein of those a pet, one need. verticals customers on talked different

for and ways using with now around in it, today stages the increasing using product that final out are XXXX in will -- later around the sent comes prices River of in up rations. goal purities as the it of probably well. as them our up figuring end and their in Our we well on we who customers higher we the Wood several online formulate that have higher And is as in to books protein, protein discussions customers that with kind we're and XXXX about protein

as as have customer to support purities higher to possible our do quickly and protein is move So the to up that. goal

I frankly, guided quite we're we're in studies, -- think very And we're in good we're to our as pet being several several going progress I rations, making aqua as our said, several and going just we -- speak. We're discussions. -- priced go protein to consistently. we then where be XX% to produce they to need let stop. in what -- -- straight of how decide customers it the it's don't terms market to and And to want from

protein And you on so protein, well. as make to decision. get want in expansive we're We give more the away making free kind order have it, to don't use that but of to

achieve we we then we're there as higher So But year. to have with be today we -- Shenandoah and to great River want able initial remainder and out of going state, for we're we as on when steady customers from but we to confidence that customers start-up being Wood our pricing to of the fast can. working protein take guided where are purities, come the go

Adam Samuelson

helpful. just of have industry broadly The helped the really marginal And given to quarter. crush contribute on right. from see I'm inventories, backdrop state gotten performance Shenandoah All That's just to the market. of better seems what kind a guarded in we And sounded to ethanol then industry about your the margins? operating obviously, given first more kind volatile business but how of would about base it think, industry take rates to market up? your just arguably to given calibrate think get and trying to that what conditions. I'm better little performing actually trying bit backdrop you the

Todd Becker

we're as I'm or and listen, Wood we're we're in of we're -- sorry, XX. got coming shutdown is And -- Project Vernon a River XX, shut of still every Mount Madison out rid well. or -- down. a No, comes we plants just X of other plant Project out time still obviously, -- general,

movements the we the are is we QX, that quarter. the of is, -- But the obviously, through QX, obviously, some at So now how in programs and risk ability in to through through management our it had did QX well to thing we looking place storms first manage but volatile agricultural -- and the we're prior one markets. right quarter, these watching in our put

considered. think something that that's I to be has

with the to on good were certainly going ethanol, as be moving look what well first obviously, and corn be to better going than than QX. paper, performed fast, we it's quite not moving -- margins While we saying achieve. all limb up way in up maybe able to In of we're out so or as and of on patient going a better because QX kind terms quarter, in

watching as at up market fast think So us, corn, and volatility gasoline. I Obviously, for ethanol closely. as a premium trading hasn't moved we're we're to

it's QX remain until contribution very we a in to from through guarded well. get is helpful. Thus and to corn far, further buy kind okay. is QX. just oil still started watch -- oils this of But physical bit. But of the veg So market going we good we to harder got as corn little I'm terms corn somewhat out getting very very And

of have through going year. to the the something to that's think end watch marketing I we're

of whatever all for farmer to to left in farmer The anybody lot this no almost inverse A the There's has hands. corn the through incentive way. commercial tight is -- at a pace. it's record carry moved

physical held it's obviously, basis for So in gains. being increase

watch we're as So going closely well. to that

QX. QX, this just So to going kind of guarded I'm over be at point

coming going we're situation in better barrels million in But in though, ethanol time this XX I under summer definitely we fundamental driving a a we a we're last year place are into great -- say, would season. driving than into and in summer stocks great were general, season, with

is still in We general, our haven't we're about. seen I that something have years. for competing cheap. obviously, And price liquid X But watch to overall, that's how octane very optimistic. we're But think enthusiastic fuels. versus And we we all

out we're again, we've that. one got are we about on. our today. And procured, excited on there. and of corn have we're paper the margins obviously, that's best working But to thing make the QX, It's we sure look year interesting. Those physical

Operator

next our Irwin from comes Craig And ROTH Capital. from question

Craig Irwin

been But next the a about the you're corn LCFS Todd, have to feedstock talk little top at opportunities of So can one you favored oil couple going that the bit [ California. maybe be this online, construction. there years? being for do things what maybe out does producers for most As was of market that largest the something for thing an soy simply you value opportunity to We spot, a were crusher your strategic own good in see this strategic comes a Philips high to is the of from Is mind already into did monetizing over addressed of point. the pro of which dip than there, very look your like grab into exposed bit and at ] production little credits support a more point.

Todd Becker

the the they're a spot is gets And I I as we CI allocated. more is exciting what this how renewable CI market, strategic taking veg feedstock taking obviously, The that's the be think for sequester place. carbon changed is and beneficial Yes. And industry. are consideration don't of the will diesel product when oil to well. yet into score we how think Even phenomenon that our

through Technology, But for customers increases getting buy margin an overall as that an taken Quip our the being increase Fluid which our we is into consideration. plants you're roll that obviously, Fluid and Quip through and oil the corn the volumes. in increase plant, And in

how the optimistic point. company, pricing a we're the soy and I at was do us, XXXX think and -- approaches how XXXX. of type by structurally kind had we're as veg it a friendly still this in of terms in being partner supply say market. I right The on crush of empowered things we agreements that fundamentally it we bit track. that approach invested mean and to oil have we those very patient on We're industry on was plant actually, energy in move our to through We

oil or much oil corn is We CI today. what soybean have of than oil lower best

we right needed. happens I fit they And not. you story absolutely is the It actually intact commit And to great the and or that wait But economics, to I right happen. industry so willing supply that be that if our for see us, think we'll well. it's of empowering right tells and for that think see It's with will opportunity have to if the to partner oil, we security find it. and the corn that did is we more very our

think right But you're I track. on the

sheet balance our times to to the be and projects what's and something provide soybean is be available, industry because in closely, beneficial I think flows I going somebody may about your supply, up very soybean with some we're there to that to that's tightness that's there of any the what to to which these of will to feedstock and going you to there could strategic be out a it's balance end with call be the in think these and potentially watch overall. sheet brewing not have will all making buy veg and security monetize and oils opportunities

Craig Irwin

Excellent.

Novozymes, for this with can what on over the number hoping with expect of and you're an your important next them on working was I very So we quarters relationship what relationship. from update

Todd Becker

of and tailor user. or had because, And product applied, Yes. where of us that to forget, relationships specific that we is that their needs this technologies protein to it's I nutritional providing about in many, can protein the the within end lots just to many mean really start of around that's opportunities ago, we that's with of that really lot Fluid are something of characteristics with many we been the oftentimes, protein for of even is up have be purity innovation early spend can that Quip time technology. been Novozymes long as more I years XX% on mean purities. for And got XX% before at Novozymes -- many, move evolution a levels and lot library Novozymes that a going working we looking not start yeast, you yeast. people think involved

while. so something around that's And for that's been a

of that's amino we express we product, end says, for express to a comes product and to And characteristics? we I so, our can where Or working nutritional is so do can and characteristics this acid, that? a the protein that really tailor that's this can more us nutritional to more we this partially Can I exists increase we're other library between comes really that's number to the that in the that where an importantly -- lot. this when power exists nutritional what product lot of our tailor to of quality at need us increase incredible available product. characteristic, and hey, start need we to can think is More that to tailor value purities, purities, but It's yeast tailor looking in, but more really user and one, of with really we each how relationship.

I mechanically. is on we on purities look there. more post-MSC can own would progress just its can increasing tell make you, exciting at to distillers. protein some But think is even working Quip get -- now we Fluid We the

a piece was and now So traditionally, and to get would that off of protein which What going variability we for are of is reduced post-MSC happen. we distillers in the distillers off and ration, grains we're the nutritionists premiums our to rest of we cutting we're distillers the this more and has traditional. leave our the thought the seeing Shenandoah we're of product of -- distillers now use the starting grains much post-MSC that, have grains, grains, we will

more grain, to of fast, bring start consequence that post-MSC can to initially what's and which thought add in a space of be product thinking and want Fluid another that up very now ] start to where an product this distillers excited would starts Walter start do. whole unexpected premium in a [ by they a that we're starting that technology nutritionist well. what and to this also again has think value Actually, is is is -- out getting uniform adding us tons, and in in turning very Shenandoah that space, the next the for But on started to millions to Quip's on is go River opportunity space the much and respected the as was -- dairy big great Wood component even straight and swine really, I is really about poultry

Operator

And our Truist next from Levy Jordan question comes from Securities.

Jordan Levy

that following make to corn increase out look markets much any Craig's on sense start would for of CI need and yield. oil. corn elsewhere their up producer pretty ethanol to to and Kind oil seemed question renewable given It low for the feedstocks on diesel

wanted on to to Fluid technology of what out kind I So technology, look just Quip's relates that the that get thoughts might it license capacity to your as and like?

to Fluid flow years that you beyond and in And Quip made value to then laid potential have guys is that out? you've alongside the next for what start the upside few that, over some investment through what create

Todd Becker

Yes.

oil their more So pounds would plant corn systems, in maybe mean, the oil, bushel. of ethanol terms liberate between oil, to that somewhere in pounds, which traditionally, protein X.X there's oil. corn little X.X per systems, in XX-pound of a of a higher liberates the I corn, and bushel of X.X And than an X.X besides bit remember,

pounds prices. technology. leaves to once at prices, we're Quip XX% MSC we'll X.X pounds believe, we increasing put liberation which us now through Fluid up And bushel there. so or the per per soon higher another to And X.X another starts it extraction the but able an XX%, bushel at That from return return liberate lower in very in process, the still to to additional diminishing you a just gets have be up, and

where want So of products going at go oil because out, in because final to distillers taking $X.XX after oil the But rest value too to relative by your veg to want justify remaining of all that still the may see you degrading some can the much oil, terms of value. post-MSC don't grains the prices kind you to product that. between and oil we're $X.XX, has all you after you the enough change

X. step that's So

think I of solution. are is you X, going obviously, X.X starting bit Quip work grail, to kind is to of make on that do pounds Step to a there. how starting really going that? a and Fluid that progress after but And that's holy

of to others to value start the get greatly. I be more are corn too kernel. But oil to how point, certain well liberate out the you careful, you have a to you the as other if of as degrade think products could

of of we're to try per in X.X bushel, to is And kind we spot pounds to we're of to that to sweet where X.X out. those of work kind continuing So want going on pounds solutions. kind settle

of Quip, very platform, at excited terms look Fluid we're In when that about it. you

a they're a just just that a and put across to this our applied yields multiple are protein they've it's on and the not we technology, of different whether are, valuation Green on the higher they of have oil true there throughout -- and website, things We plant, many lot higher the besides purities. partners other different got there's They've plants ethanol fractionation lot got try technologies working platforms. profitability go in fiber Plains technologies, terms it's they've think It's up Our company in you of not technologies, that of technologies. technology increase if or got plants are.

to value we're for for company our partners. only just that think of there. ourselves and we getting the think We we our continues started development get overall think greater is So the future going in and

Jordan Levy

I how views touch That's entity? gears and And either it your or on helpful. potential to that bit. you're change to wanted back you up-to-date on Great. think just in-house about -- most then thinking a bring whatever to refi GPP there or

Todd Becker

Yes.

address So remaining million to of focused And the its debt, combination at outlined debt we GPP right only a now utilize we about of the repay and of end is making like will year. maybe pretty current which well paying be cash sure on we and $XX that refinancings down this maturity operating actions strategic year, think the obligations. those

whether of very the I the think we we'll goals of other restructuring that unable then it's we the maybe should platform. the third refinance, in couple that look if outlined have we And months, to confident we're will we opportunities, We're actions next have at achieve take. for debt quarter. that the that other can just hopefully, by end place, or strategic in

this at focused today. are that's on And what mainly point, we

sometime maybe MVC lenders by have on the will overall, distribution with in whatever debt They this back we new the notwithstanding Our on well, from Plains. the up obviously, depending there. the Green the think, new point, point, some heavy Birmingham amortization, refinancing. the we well the eliminating at hopefully, end to structure increasing in look facility our And like, place continues perform where at as repaying XXXX, and amortization, debt

we're what alone, fine. stand as point, a just this it's doing And focusing at that's on. So

Operator

Bienvenu Stephens. next our question And Ben from comes from

Ben Bienvenu

want just project. timing. on carbon sequestration to the the capture I ask clear and to about I be want

applying program? do still for could you'd an Or updated of Is LCFS expected? that I think from And project have line? sense on you operational you you score work start for yet the you those California noted to on had than a lines, a be in when pathway that time previously expect the same sooner CI along to then XXXX. is the

Todd Becker

some would And the for things that's on accelerate say, I start want geographics date they the a they the starting think can to I and in would pipeline. but XXXX and there's that, try there, out to mean, I Yes. bring we obviously, kind Summit If in XXXX shipments. as goal. of build guys obviously, get outlined continuing different have

there that, X fuel addition In that's if economics and standard we Vernon the and carbon Madison, low to realize working the all Mount XXQ would on Obion, direct well. credits, the inject are are of any as we sites where from

we're getting well, So well. and think we're we're geographically locations excited those as We great about there. in just for there as started

And those second What are lots But do was those so exciting. to in the of both obviously, of parts. question? very each

Ben Bienvenu

for On be the California... getting a in revised to CI ethanol score sold your

Todd Becker

Yes.

done Summit in prior well. have us half. are basically those and plants and cut to of happen a to X have So very the the the the just got would -- up there sequestered pipeline. going as point the that of in but X of and Carbon plants as plants on gotten starting that X -- on a been have plants ourselves, not we that shipper score plants, each what well, the the on team on There that scores pipeline, their And lot that signing have manner have the scores similar they others any and carbon we carbon had there carbon, -- guys, becoming they sent work if carb partners management to X from in

about CI. as that's and oil-based to oil-based, you if renewable So oil-based the XXs the the the that, to or well. diesel or XXs they you start in obviously, is a And XXs. diesel, soybean look into in scores corn went the of CI And vegetable from into think at XXs on renewable XXs

other even some of the waste lower the And oil, oils then than that. are

really a for X the a we that's as more after the which on pump that and going confidence, ethanol biofuel. the plants we demands a ethanol fuels. need on in would think example the be does I world carbon the which low-carbon or half, is be carb that lower So tank future, getting told fuel us carbon And what in the us path how when really saw gave to interesting in sequestering that's storing cut low-carbon fuel in more low-carbon is play to

so taken to into future to compete imports. where think it quantity, taken able in with has think -- of I the compete standpoint. tank, into be to going standpoint be the And able to that CI the prepared consideration terms to Brazilian pipeline be CI some in I think I that's how but online compete to be to lowest We'll national when biofuels LCFS into the made And of from multiple from of in not the well We're be we fit being consideration we're because across with going states fuel a as with a carbon United have we expand comes renewable and diesel. potentially the world. States standard, this are will to we able

Ben Bienvenu

second Understood. revisiting fundamentals. question That's is just ethanol great. the My of kind core

or more reticent it or your in anything you're while the for ability know fund there pretty little or in X margins the for cautiously are impact much that good industry bit I'm his you're said the have a for it on next with looks As would resurging Adam year an in transformation The to south undergoing? did noted those curious optimistic. fully improved. next Q&A, -- here little turn Is where this I market you if S&D that Todd, driving. that demand self-fund

Todd Becker

X not reticent the you always an at capacity that Yes. And you last saw and only be, reason years, other last optimistic kind was in industry. faced. to we're oversupply way keep mind is as full years And yet the to it I'm X cautiously or because the challenges X of the still running but that of obviously, the have

the watch to I to to impacts have that going how the structure as well. even we'll watch closely feedstocks, of margin those that But that, of carefully overall. forward price in think very So terms than have more we're

there's while to its optimistic industry of its we capacity a we're the great shape, discipline as stay lot that and cautiously shape fundamental watch and to So closely. if maintains very I'm optimistic, off-line but in have an that focus in industry

And going what be been several all cautiously there we're a worst own our to And today. is bit in last but we've maybe out now, obviously, more optimistic than optimistic the so I'm little enemy years.

yet. in of seen We not we the back bit seen but of we've on -- little little haven't a have We bit export China the saw seen a resurgence earlier that come market, year. a

everything is I I but really for we're the think good it a So gets rather based numbers. sure. strong steady, contribution in EBITDA, is than here be on beneficial this just just strategy. that's a alternative, X so a did into X.X just where numbers a our to from or ethanol place. -- baseline X mean, X.X XXXX, X platform are even our all that's baseline. We And And 'XX is I'd

a So us. just industry be a steady -- X.X ethanol fine be would would with

get start when even flows markets we production And our year cash in, now, the capacity sitting, to that would within X right on XXXX especially just line, cash now to to hard from on generate not flow. have basis worse X. been X, we're on be the mean the day they a turn or the coming finish way where And I in pretty so. historical ever capacity funding all it have generating we've X you from protein or those day to

where executing took tough liquidity that way while we're think in of point, successfully company, our our anything such this right it a balance point turn in with great even have for sheet -- at pretty if and I us So would ethanol this at shape, place available now significant in in to additional a as be is get a liquidity X.X.

in already lead pricing. to We've place, time got to order fact equipment of needed in equipment. even our And started of most lock X on that to on we've that even X other stuff plants the get long we

as we there be I Obviously, Sure. in we we're just these what it that's insulate we're think watching that escalating But way bit? best we're to a little the structured, closely, are component shape. of a good steel pretty build. trying small projects the market Could costs And but can.

So tough our get for way point. of something to strategy X.X this it'd a be at of completion in the pretty successful

Ben Bienvenu

Yes.

Okay. accomplished and rest with you everything luck Great. quarter of the the good this on year. Congrats

Todd Becker

Thank you.

Operator

next Manav question And from comes Gupta Suisse. our Crédit from

Manav Gupta

XX from On that $X.XX indicated capture, That's $X.XX to a gallon almost the score to you CI carbon drops uplift. the XX.

You're your indicating slide deck. about $X.XX on

involved a here? is So transportation there cost

to case, Carbon, Summit with I'm IRS And LCFS who's carbon a being your project in competitors doing Along it. understand, similar clear agreement second credits. with the with question there is, your this takes is one belong that as off? to XXQ of trying a credits very is split solely this credits the project on

Todd Becker

be on in you with XXQ. signing if you're cost capital built, Basically, Summit, you, just pipeline shipper as to is up Yes. that how a at to shipper, pipeline the a the credits splitting gets no which want the

type you're plants the asking, like not plants obviously, on we're a like for putting I we the any different where that's great a economics. investment asked investment So up risk. shipper, very it's signed for And ourselves But take-or-pay the in signed think just season. return the of is high similar not in. that the And economics, open Summit project. obviously, also being up very because takes others And me that a an and all offtake X-year nobody have

going that's -- something we would wouldn't to get we really So not in. be to have involved wanted

and imagine build to the you is to pipeline, the all just would incredible we'll with So together consortium other why partners to incredible opportunity we'll each pipeline. starting that guys that point. the on that's other. It's have get the ourselves, with the Summit and all we're economics, that on the an ship It's partners the put I commit involved volume, go and shippers pipeline, share

XX get it, doesn't as other exactly is to the you where and involved involved a that, market of going some right that depending shippers It's the well, $X.XX voluntary those going on or then to obviously, go But reduce their and credits XX And include, are take of even economics. CI where look in to? reduce shippers going you're -- to And be score risk. XX the to or level from on at as a to the about XX you gallon credit. the whatever obviously, you're LCFS a

And schemes so -- and we'll then come obviously, what LCFS other place. see in

shipper and So in we about as everybody from can all we well is a do the wanted be in in great to share -- on share as well. general, invest I that line thing it's if The Summit pipeline, think our standpoint, to is start economics the economics. those

So it's a pretty exciting opportunity for us.

Manav Gupta

lot Okay. And is of high some hit ethanol here their follow-up one your of prices facilities. natural peers quick took in a gas on

dodged completely bullet. you that Somehow

how elaborate, how you did If that? can -- you was achieve that

Todd Becker

think years. have They've and it's -- it we and have put a that team anticipated gas snap. gets something here That's cold that many for winter one certain. was look, I we cold. the cold great place Well, for remember, in thing And snaps been that for natural just seen the many they protection

was polar -- So the if set big that before ourselves you vortex not back X against it where and last polar the of go in it's ourselves your to obviously, years, look go every protect winter. you -- back that, we extreme and X And these X happened probably we vortexes up -- and or had had snaps. cold

place the team able able achieve very And so do those that that. results. to that's really we be how was were proud And we're to of in to

other natural ethanol for in But like that going it's it's going crop And thing the one we're is planted, planted. markets, it's corn to the whether get the it certain yearly, certain in corn a to if one the whether And thing cold. whether it's markets, for to the is as against then do, get much we gas, in crush, don't we protect get want we well.

risks, that. company it's I mean, corn, that the investing into it's have oil, -- capital looking in a we always those snap all to ethanol. of were set winter, of been able that's it's this downside have in the always cold in natural in a we whether risk as corn in are we whether gas some or And whether whether So we it's ourselves and there's at who and insurance protect for up we and

Operator

our from from And Akyol comes next Stifel. question Selman

Selman Akyol

comments Very your Plains. much earlier Green appreciate on

Plains do at in there, carbon about and sequestration role that you see think a the Just have for thinking evaluate opportunity Partners you things, you about Green as all?

Todd Becker

examined. as that we're think that's shipper We're don't I Carbon as a we pipeline, developer it and Obviously, the potential of partner. as involved in Summit investor we've not that's well Solutions. and -- as something the a a

a will think MLPs one nice have so or the I carbon last obviously, to us. were that And others, apply maybe Green to plan. after go know If Don't how we it's the public. ever I X But Plains last yet very of there's the to -- mean, basically Partners. recall, I X the

in is not determined. will But partners So carbon well. be at lot But how is there. its development optionality in there is early this that there and yet playing of or certainly, end up there's still optionality to a point, as playing

Operator

And question Craig-Hallum. our from comes from next Stine Eric

Eric Stine

on Just conversation sugars, think past, talked about with XX-plus clean parties there. the in quickly, I you've the

So just curious where that stands.

that? sugars? and And still big small then or one using in secondly, you've I plant have think that mean XXXX, one hoping talked by plant about Is you're producing that I clean online plan? to the the the past, --

Todd Becker

a seen than of this out. forward, York roll what out been obviously, disposition deployed positive sites, remember, York positive to so Everything far have plant bigger that doing then, given we're to We was has already at our we've to York. much keep Yes. it us at commercially moving it for and to brought you start reengineer and back to has

talked now for So everything we've what right about. is track on

with working customers are We we speak. today as

the it track. others have with types much CI We achieve absolutely dextrose different to that what price able are that have like we supply. that to able it we're we opportunities has the achieve to score at we're opportunities, right including customers on co-location want with next that think that In general, that uses, is have all of we've co-location to the right seen

so very seen to date Green this Plains. exciting us going for great everything of gives I we've confidence is that that think to York out far, be

Operator

back would for now Todd remarks. I questions. over Becker showing like turn closing call to am further And I no to the

Todd Becker

Yes. Thanks on coming call. Thanks, everybody. the for

for I balance great really is exciting think sheet is in us our what's shape.

our We transformation. have fully funded

right value us outlined. I of purities we is innovating Everything construction just this We successful projects transformational then for heading ability the protein in getting going continue and The out of gains gives be confidence to we've qualities. a to truly increasing we're innovating is roll remaining are and around terms of that that in more purities underway. purities is made path the nutritional The around that in those these to direction. And on projects company. increasing we're telling us our higher and the our think yields

don't believe a X.X -- achieving and was right down also our top now know continue that results, can is solid general, this stable in there's we that, that to lot a On stop platform from very just us of nothing path. But helpful. going a of concern I others. we're

your you. So to quarter. you we we'll talk appreciate next support, and guys Thank

Operator

Thank today's you. call. Thank you conference This and disconnect. for participating, now concludes you may

Green Plains Partners (GPP) 3 May 212021 Q1 Earnings call transcript