GPP - Earnings call 2 2023 | Green Plains Partners LP

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Operator

Good morning and welcome to the Green Plains, Inc. and Green Plains Partners Second Quarter 2023 Earnings Conference Call. [Operator Instructions] I will now turn the call over to your host, Phil Boggs, Executive Vice President, Investor Relations. Mr. Boggs, please go ahead.

Phil Boggs

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

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

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

Todd Becker

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

results that during the experienced have we were challenged the us back quarter. as by transformation So been negatively events a impacted quarter good the what several showing a you events significant that we from several quarter, held of would

coming million the was be this $XX for last half locations first the the The over some X recovery year, back. took total, quarter. the was from so of our expect Wood most some of down company in impact which our largest and River of will of insurance incident, This we to in

in to upgrades had while experienced production in for some was downtime, X challenges lock we an event we at to downtime of. other level said, in put and prepare came QX that Gen And also our these and addition, events In a had XXXX in to X, most place which QX and which later had during quarter platform $X.XX unfortunate in a hedges Gen impact quarter high With unplanned also and already plants we need on the planned volumes of had sales June in beyond. margin in unable The environment, a gallon of the our on the lock was of over results to advantage we were took in. highest take timing that away. significant and of really that hedges we

operations, to completed diligently Because unplanned end gallon until us, to at after they near to us than an this ethanol is in of our in we and indicated locations, on as On accordingly production the and team and our job the more at these and rate team a even more resulting full the released paper, but is up utilization back did both behind ultra-high and back $X.XX But good getting experienced. the of making spring addition the service. expected, protein state are plant not extended Wood to get records great importantly, call, new events, now done better has there operations tragedy the the outages. With important, for through a last later Wood River shutdowns for team of we quarter. of many XX.X% the running opportunity tracking $X.XX operating May, weeks we were and rate downtime River

operate solid shutdowns, foregoing we enabling margin typical during are in and our oil, locations assets fall now improvements leadership our this of fundamentals. their to downtime are today, improve corn periods seeing team these implemented protein, paper and reliably and All at Our least production half additional ultra-high third reliability operations process margins and production. fourth on the with positions during to quarter protein increase of solid capable higher in, control ethanol

Now on depth in to more quarter, Jim cover later. will which the

prepared we both solid consolidated consolidated protein last on to there gallon, was impact again, and per minimum. ethanol, negative half. crush for in a but Between and $X.XX a margin crush absorption, was repairs, $X.XX opportunity Our the lost $X.XX are Wood overall River,

Our of needed financial the to we generation half margins, buildout position this liquidity. last the significant for help which don't large opportunity strong during remains pay for cash year. very will significant rest in for half, of strength And with our flow last the as we to capital a the the see part return with change the free

Nebraska, investments divest for Atkinson, to In facility addition, improvements. our our as to we contract not sales million does our XX technology into it gallon parameters meet making entered a justify

our For we are fit where we not be closes, this once accretive. Plains, And long-term did this it Green asset believe transaction vision. going will with

We increasing close further base. and financial and in few weeks expect on next the our the capital as to back the balance sheet, we optimize asset bring our strength

fundamentals bit rains corn solid and corn and finally, estimates acres in versus giving year. million across favor the in crop the our detailed higher source the west, our are either USDA's now, recap where I improved technologies, locations are little which call about each the expansion timely area acquisition half of last how later very in in prior market. I that X But XX an million the through demand than to tracking improving. strategy will the to walk an XX and and with several than we have again add take transformation inputs easier Core where spreads year. or an and thinking for our progress in We the we immediately our want of continues expect reiterate of you our opportunity you can not through a soybeans, past acres a for supplies is for expanding of volumes protein fuel conditions for is both remain With look of to at replace this technologies the look accretive, opportunity to the oil, summer strong therefore years. running, of ethanol price these large are

seen we recently, fact, in In western the have corn on crop, XXXX. just new bases pressure continued especially

to of tons we day After in hit seeing and once XXX multiple on designed Our have per extensive achieving days. over ultra-high are quarter, day. protein as taken X,XXX production second tons X,XXX production downtime the rates is rates per again the

overall of being on with made to Pro planning of exciting to from efficiencies. results. really to later to in hand dedicate to Fluid of yield they during now well. fourth true our X and will achieve production to are our supply sites have to our clean track our call capital of rate, have Wood I full fact, facility averaged well is start were higher we River have into with and to time over sugar I and MSC Quip. X datapoint within bushel better at capability approaching We on XXXX, Jim interesting produce as more sight, has the other vision early full X quarter. potential are the a quarter over protein, in for update the our refineries. And achieved build the over volumes financial The X can this XX% now our and since the development able up provide increases get One technology to pounds, platform world XX And of protein the an on we market to high begin technology the is pounds delivering this demonstrate our later No in fast as which future chain rates. pounds per investments these X.X X returned as to

Jim Stark

million and good Todd, second gallons lower revenues morning, approximately million, than XX% $XXX.X Thank over you, Plains for the quarter everyone. second revenues lower lower consolidated of year for approximately correlate year the a same ago. period or the XX% were to year the quarter. $XXX.X Green production The

plant last reported comparing during rate XX.X% Our rate year. run same XX.X% the in the utilization period the was to quarter

we As range perform all anticipate Todd the call, our second half capacity utilization of stated plants operating. targeting earlier to XX rates mentioned low-to-mid the in the percentage plants our of better in XXXX, with much now in

quarter XXXX. Adjusted to a an prior year the or expense for of well was we Depreciation diluted loss to net the per million $XX.X as reported million, $XX.X and share, the in or million XXXX. $X.XX compares quarter the for For of to ago attributable year MC the That per That a Green and a the net for builds, the period of consolidated sequential year. income compares to per gallon year. in loss $X.XX QX the million, consolidated the when We Plains last ] per diluted as amortization 'XX. million [ On of all $X.XX first versus $XX.X same to $X.X quarter, compared $XX.X the in a negative was by EBITDA prior due higher share. end online gallon the per $X.XX basis, technology realized saw $X.XX we [ quarter-to-quarter at a operating compared crush margin crush gallon strengthen of addition to ] crush this of year.

segment Our merchant ebbs ag our million and quarter flows prior opportunities businesses, EBITDA. about and That's of than This decline in by quarter. year was million driven $X.X with year. lower recorded $X.X the on energy to lack each which

million was interest due quarter as income would completed. in the our XXXX. remind This the which when Plains in severance increased $XXX reduced company quarter SG&A by costs, these projects tax year right SG&A last quarter second our ago. The for increased though, to the which fees year were so I'd forward higher including was amortization may same costs be million like $X.X for GPP had to period of on quarter, compared was expense of of in XXXX. segments period million increase for fees the been impact and the net million end of like was to quarter that carryforwards to for Green income for of do associated all second QX legal the capitalized callers, debt at reported interest, $X.X the buy-in carried million both compared $XX.X costs, to For consolidate the I we note, with approximately the ] than and both million $XX.X available $X the indefinitely. for capital million, a expense million tax be legal benefit interest quarter, At entities. Interest GPP of [ to compared second for the $X.X the loss would 'XX the $X our sides and a driven personnel to the higher was certain includes costs.

Inc., continue around our for tax to excluding rate that Plains should be normalized interest, minority We Green anticipate XX%.

Our remains had quarter under million and of at and restricted solid working cash million we along $XXX equivalents, with cash, liquidity in $XXX.X revolver. available the approximately the position end cash, capital

and of executing steps and the on have so. next transformation the do focused are We to capital liquidity

$XX included maintenance, initiatives. which second we sugar and million to approximately $X quarter, and million million of initiatives the capital platform, was MSC For other $XX growth safety, About Shenandoah regulatory to toward allocated capital. million protein in our allocated X clean across and field also

of which we with ratio lower cash the same 'XX, was $XX of prior million volume in Partners million million for EBITDA for flow commitment the $X.X permitting ago. remainder for $X.XXX income through of anticipate year. also the couple The CapEx rates quarter net MSC of for a the $XX.X the partnership's our the million a to distributable an coverage the lower quarterly plant the QX reported reported deployments a plants. Green for financials partnership in period partnership of reported Green will steady for $XX.X to slightly line declared of and per were with quarter. of Plains million the adjusted minimum For than XXXX. continue $XX.X XXXX, as we quarter, utilization technology million of during at The The larger year the at the $XX.X the be the Plains timing same of work $XX while unit, than million range X.XXx quarter, a distribution of supported

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

of currently May units submitted company Partners preliminary partner the all publicly Plains of reminder, XXXX, Plains held the to acquire Green the Conflicts Holdings evaluate have already Green Green X, evaluating of Directors of nonbinding the authority the Committee is on the general common Plains. transaction. of not by to proposed Board proposal LLC, Board Directors been of possible The LP, a the terms of general of As a delegated to a partner owned the the and partnership

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

Todd Becker

Jim. Thanks,

limited have is better. of half and challenging, looking a I know about, and time, forward 'XX there's solid, last to our lot and path look gaining traction So the and we while talk and QX was 'XX

we talking on X.X ag clean pillars about For years protein, have decarbonization, producer is underappreciated. high-value This of a oil, the of sugar to ingredients, focused corn now. Quickly, couple out tech a now, the a been gaining transformation normal renewable and we sugar, reasons X and scores sustainable is of the the Carbon several products X our but do our protein. and of clean is bit decarbonization, which on probably in order, matter. tractions are technology future

sustainable We will years are and opportunity fuel incentive majority now carbon when place. believe in away a less decarbonize structures aviation alcohol or of to a to are our we jet roads pipeline financial platform, firmly discount our believe as strategy all than lead but Don't X what from we we significant production. is the underestimate

lifecycle of CI, gluten key rules. globally, technology for meal This carbon for ingredients selling PEF, and aligning though, today protein intensity carbon intensity, is with this of XX% our literally which score ISO globally. lower clean protein yesterday, reduced will We is Importantly ISCC a our to a future. point which the and to very be and sugar high-protein comparing food received important dextrose our further, shows in all latest producers the PLUS our our aquaculture products pet corn ultra-high even data score

can [ we the demand matched well. products supply on ] the significant cannot In we next current More by as with market CST on over intensity addition, our several later more carbon which be is than negotiations years. today, why this are in

XXXX. opportunities decarbonization in with to starting million that at add now $XXX Our should of economic annualized last million least opportunities $XXX half the

to new executed carbon a to different around strategy more have contracts use go. we give our have and confidence We number, also this us that few the

our our see Our a impact. remain commercial even short-term results on in and track strong to success protein rates continued initiatives was has reduced with which QX,

in ramp pointed our reorder Protein the for for rate even main have that costs; stronger of seeing Tharaldson high, to on Madison in initial deck rate which that relation locations we by out have increase Our our quarter turnkey our pending and normalized, few the in of to with and from capacity at remains and years. each range operations now up quarter, to is while this site, XXXX run hurt first production, we tons to out our the continue JV bringing much the platform couple our XXX,XXX $X.XX XXXX volumes. important, we in ultra-high close facilities X for margins X X Illinois turnkey has the economic input We our the that more uplift believe Minnesota. during the ability second years, we to Gen our XXX,XXX those gotten last full the why as gallon first are rates, which run our begin margins Fairmont better grows would is River. The $X.XX prices on of match to with our laid reasons: full important number per first, to in protein corn-soy this get is annual Completing anticipated uplift and increase narrowed, and range to marketing us North for total of remains what including XXXX tons, yields next, in $XXX as relationship indicated. very Wood million had is Dakota second, new million and over sales permitting out site annual $XXX

products. significant see marketing are We the for and continue to XX% counterparties the with late-stage our discussions in commercial protein of great in success ingredient

commercial could during to that in first We we beginning believe our of continue to the quarter, XX% sales our and fourth XX% expect XX% XXXX. shipments platform be protein

advantage meal meal, ultra-high has higher petfood the soybean importantly further and does protein a Our a fermented without offerings. versus high-protein product than our nutritional protein And application, soybean antinutritional it other factors. gives yeast and concentration for

the are for do we anyone together. labors to doing their as protein yeast what companies our biological tailor this with world of recipes on the can don't can beginning allows and happen now now as Novozymes we depending the are to fruits We our well. Now, see suit needs those to believe customer, partnership and in

been some points; pointing is quick for have other now. Two protein. opportunities now time first, and ultra-high these to ever are We future for producing now time first the we the non-GMO

The will but We higher. will cost will the ship to trials customers and for high, several next initial months. returns over be the be analysis

hope Second, post being in X XXXX next quantities and this run ship commercial QX produce to come Renewable majority on recent locations of production MSC a as prices our online. oil location program continues for to facility week, we capacity to strength of the in resurgence Pro as dedicate its to to XX and a this diesel corn completed seen expect that renewable keep production. have

oil We corn to product. carbon lower to consistently intensity renewable our the due pricing oil achieve are seeing of premiums soybean

are the is remember, corn our clean As $X.XX advantaged XXXX, and CI in credit, $X.XX And in oil we the that underappreciated. result, think further pricing once pound I seeing to renewable again range. is low oil to XXZ starting also oil soybean fuel production a a under

for initiative, sugar in the to mechanical early teams construction make on at late to construction, clean XXXX. completion in crews great progress project our and and Shenandoah be our For continue continues XXXX engineering on and startup track

shutdowns startup there to create the have that of the the we very is remains the in larger completely majority well of in our past. run the carryout, our in finish have anticipated contributions half dextrose are upside coupled for back took as from ag lower expansion alone recent for obviously, XXXX, and as that commercial than we for could are of contribute are we expect and will the demand year-over-year first of to stronger half today a before run is back uplift we the revolutionary and quarter, in we in of biorefinery our laid half today's second The protein been is pace are for commitments drivers the has end protein in adding to across market facility, of for is rate have stronger of looks we all guided have prior have a half have business. pace for the the and oil during X Gen driving setting the led deliver positioned to ethanol level Customer the the capacity We a corporate corn $XX an intensity due on we previously sales to. and run targeted nonethanol and year of corn XXXX, and margin discussed our XXXX. pricing, has businesses The confident favorable with the At positioned $XX interest an utilization out. discussed operating areas to up last on annualized be second improved announceable spoken of back available of platform rates XX% outlook high, to XXXX current grind stronger rates we that dry have we at previously a our depending overhead, business year's the million we for to But the from number year. The market. sales the energy and strong all-in, different for on truly protein net the setting believe and past, a are done using hit and for something oil doing carbon to half that million never creating what than numbers to renewable first to us we materially

brief provide update. to a want I Finally, technology

our we towards exciting technologies. As we on technology some call, news are Quip indicated last for Fluid working

is pilot subsidiary should into sphere first, them York as combine Technology, Center are side conversion because energy of The fiber since X a this and not Innovation was building to getting SFCT processing Conversion or X fulfilled are adding fermentation, and early discounted in helps side. a Fiber separation, largest announcement the well our develop into the They underway our facility which companies, a the mechanical for to be with these very and been SFCT, our public about with process venture platform. world's adjacent process to Recruiting well efforts. we Shell Shell, where MSC large XXXX Equilon, precision by working we have collaboration of

what and leaving in collaboration? its it doing break this represents to technology that products into So of corn high-value allows kernel nothing is with are SFCT Combining us innovative down a behind. an processing we MSC agricultural for

for separation renewable X process. our to lower biorefining and maximizing really Canada. Said cellulosic our just or from the our value-added that at is built, MSC ethanol markets intensity oil convert away, in you've protein, X anticipate ultra-high we addition could capturing been has milestones. increasing XXXX, Green anything will the the lowest-value cellulosic is ethanol. ability and this which in which collaboration sugars, be in achievement have which far of product, and that products fermentation high-value which portion we low-carbon is Plains up feedstock of us DDGS, means, products: separated remaining been have protein upon SAF what component other than Quip, of decarbonizing commercialize precision of the coal make and mechanical to to past, step the We for another we facilities technology chemical the producing grains, believe key to can It's not this ethanol, start using oil, of In platform all next amount dry the at low-carbon distillers look fiber breakdown recovered, and a and this and technology corn and the that significantly through our we for different corn like adds be capital Fluid process seen already biological a renewable will into step expands way, key which already

primary the validates as feedstock MSC technology but also being globally, first Europe. Fluid blends, precision markets it technology as and door feedstock. the opportunity for not wheat Quip's as sale will In MSC had flexibility demonstrates its the application leading only world. opens with addition, corn, Quip wheat, the sorghum further efficiency its into work which around can separation and Fluid MSC be to The additional

patents X -- Fluid as material related recovery, issued protein stronger got includes Quip's focused converting X sugars. addition, we to recycling this patent X In pulp which to quarter, suite were related into and oil sugar, just on clean enzyme of cellulose-based new X

these We we very more for value coverage key be differentiator sugar have to Plains technologies as several begin company Green in technology underappreciated, the a the also X.X. Plains, expect are for to XXXX. Quip's and truly broad often demonstrate while globally shortly of announcements in patent latest informed we have clean a we by been to coming. The our portfolio revolutionary whose of issued Quip We reinvent into made is countries deploying Fluid IP value they platform Fluid IP Green are investment

the are setbacks although have seen are success just we we of future all leave question-and-answer across there. have executing for call some joining this with and with our and are We And we pillars, us start let's been some upon now. And that, the the I'll session. time it pointing now. future we seeing is today. believe opportunities our of to the is Thanks And us, for finally ahead on

Operator

Irwin comes ROTH [Operator Instructions] first Capital. Craig question from from Your

Craig Irwin

day. a XXX down HiPro so XX of sight on Pro. Line Todd,

it's of -- Quip of starting place, ever what sugar. describe that been in now line, sugar? some rollout And You translate most all clean to days you a you've but look these an the starting would there, last us with are different us things sure there's the from I'm us couple share in investors a a given nothing do, standpoint, sugar help own important learnings learning you right? the like looks Fluid the There's goes in into things said you years. lot did had exactly forward clean with execution for you some right? Can you're just can maybe HiPro Obviously, you the here, from that learned to and straight clean to what been of understand

Todd Becker

is exceed to laid-out which more well I and and in them. experts more that the achieve be and crystallize what a that well. difference I we protein. new place, learnings, run ramp little up from dextrose, of we a more wet out had from difficulty of now. to our the to only X are our and learnings as out hit and pound will system get in put be we times in XXXX, technology at up Yes, as results well quite different think we systems for saw more ramp then we significantly million numbers we underappreciated our not We think sites, in it, that build those dextrose XXX learned take consistently, building out longer a And is these XXX appreciate hired terms believe out rolled able as know, our these we sugar pounds we than as per I but but us And them. when bushel to them Took went partnership sugar. Sugar continue but X.X day Novozymes better allows apply of to every the we put we're today mechanically, million as built our protein going there in per optimize as seeing well even debottleneck on frankly, assets, with how will can to terms we're things just bit bushel yield. milling right think a we'd we pound thought how we to as now X we of we our for volumes we we're them them as based technologies, and to making we and we And going do have to off, we

have so to wanted our largest dry the we It's the we come so that several grind we X believe us is a on these milling work future company. And actually set the from in Gen hired of technology world differently that this management that this it's because really very, of wet up for running very team revolutionary assets. not implementation

product. we get top on then, of so And ahead wanted to the marketing that of

product a takes way use through to longer remains this -- of all but of high. food, dextrose terms industrial In the market

on was reduction X for so is a food because early differentiator to carbon for scores significant big products. and And which our is get carbon product both deal intensity, in a key very us this industrial

a XXXX food we and start start about away York of we to process and very carefully we in up start industrial closer gamechanger we take long do we we're already demand when ultimately, up fully build total takes on online But X what grade in get to we're their should bottom Shenandoah it is they in before going which certified, these grade to to where better we don't food on can market Shenandoah to so all to hopefully that move do But we #X, Do our is at be our collocate start out take look That's properties. And approached we the this differently, more protein, us. to focused food that, to that impact this want #X, sure to why can in out locations So us we believe, food-grade facility. the come certified for at length and then to which it go technologies. geographic is line to about Or start to technology, they We'll Or interest our a some how the X up, just that other product want such things the and designed certified sites? and much where months we but overload then X, just at roll versus very valuable markets, we it market. and facility selling us get are make this think is capacity, we have increase it. later expandable? hit in next. the

Craig Irwin

the the up So the active because been actually whether much be to some the for far Can vastly is out for update and years you've had to you the these more chunky assets other a opportunity your maybe where days an I the right a likely And X This MLP very you've sellers, tax as question far being them. the us in you offer situations on plant portfolios evaluating been of active had how easily proposal superior is as M&A. of on execute are the couple past, as of a interesting even advantage to right? X And Let's think, and possibly structure many last not for plants there single acquisitions hope big as or ethanol from now executing or to complications for market? broader consolidated, in away the what with number. appetite you small over field not weeks too portfolios? opens

Todd Becker

me let but couple there, unpack to focus on lot a things. just that's a Well,

leave the much we to we'll just continue of process. that Conflicts to at talked really of And more that. some MLP why we're We in the And with about the Committee and talk reasons than we the just where that past, it bringing negotiate at in do can't on in. want the because

scale the our acquisition that been a as standpoint, And the plants, bit. buy on Secondly, them. we plant. a saw, technologies want we harder small size, and from general, apply sidelines scope, are an in you divested to we've to to Ethanol in

But geographically, the there around that and But good. hard, out future. Acquisitions expensive, which it subscale is to just work our what logistics way assets in smaller protein was value strategy our want to somebody of operate and up. else's, we For it also the long-term us, have gone plant fits decarbonization. just a they're are won't sugar, oil, the it's locationally, fit the

to -- build technologies bushel before plant of on that's If to an one $X.XX $X.XX you gallon, our and minimum, today, replacement $X.XX gallon any in $X.XX add a you is minimum value ethanol want as well. for Midwest to a the sorry,

that's and years and quicker going the in next as nots of in and get as to which So will meaningful? opportunities, of X pipelines pretty want before or and and more there's the for got a as couple first, everything and that who platform the you up margins pipeline haves over but position. quick meaningful We on up, the over Summit because -- chose Summit, for somewhat a of more first, is most, our several we haves, believe sitting could those our blends ethanol to advantaged technologies the you're next operating than why at is if have partners Because running re-expand years look not gets applied, an think example, you're this And are can advantage multiyear going to expensive, X built which replacement why will built look the recovered, be begin our be be have industry. difficult. we you M&A it even on have of get yet. And take are absolutely that is is cost but can importantly, in that a we that probably is

some that's So look announced, to feedstocks different being an continue to alcohol low-carbon is the the jet you people we industry past. you've of at when volatility produce low-carbon acquisitions, notwithstanding to value very go seen value face. which of asset fuel, why up, we going to And have get you the already projects if to just this and in --

don't clean expand But capacity, pipeline. we our sites want take bunch well. we the sugar, build of to look we more we so at on advantage up have So being take some where we're take bit, can as a our also really expand a we platform. to opportunity absolutely We would capacity give love can fuel a market going place to like a and build us that as of if a Shenandoah will an out you little

few M&A the is this harder out was and it's what to expensive the they're like any years more way. no do there, in but much by margin ago, it It's quarter, matter much a So industry. not in given getting

Operator

Sachs. from Samuelson comes Next from Adam Goldman question

Adam Samuelson

on quarter maybe sure the you're clear question the guess we're I second and So framing first the making half. just how

you remarks, the talked a unplanned River think $X.XX downtime up I the leaving planned to issue to Todd, table. the margin and Wood potentially and the prepared other in gallon on of

now curves plus corn your we level the rates, As downtime margin second is about way in oil, of and at EBITDA? the of or the half HiPro less second that the where to look the think year, operating higher at are mix with forward half level right forward and network that margin

Todd Becker

contracts, a prices go person the then the advantage having to ranges on flowing. to which I other our those QX look, becomes you're double Yes. We side. in cancel today; when yes, of also you on if you the high-priced better. But the and It's can't whammy far not don't a potentially part was and even a bit not, ebbing saw expansion having from yesterday. of expands up, nice execute And the them back think the run or and and fact of market to those buy

them, for into our So well. hit were And of sites of as we downtimes And while tracking unplanned we time. us, really at had at all well. several unfortunately, big turned they downtimes same the planned

hedges actually missing so sales buy-in as wasn't just protein buy-in was sales, hurt having well, margin. just to And also high-priced the really it It us. and that

forward, we're margins have -- as those a higher when if achieve And get they've opportunity type of even now, little going we clean we clean So, and come down but right then, we since the more. bit. real them that's to saw

ethanol very saw come now up it's a rally down, builds. I think and numbers of that of improving again. As We went fast weeks corn couple are

it's better last soy our lot in And corn pet what the well. you soy doing we as for a sectors, just favor last all in think that and animal from -- up strategy sitting our sitting outlook just get the across at So narrowed, as good it's it's and spread seeing to the not of sitting over fuel X.X half. And indicated, $X setting obviously as including for I into got food we're we around in half a protein, base ago fundamental again. years the And but product $XXX, rates doing when the our good aquaculture. for about a have spread soymeal inverted but flows, pickup questions and and corn then of really around rations next we're think XXXX I shareholders and pretty demand this continues really in favorable when our better while inclusion ebbs year,

Adam Samuelson

really could that's No, on helpful. HiPro Okay. ask if commercialization. just a And follow-up I

portions getting or premium would regular versus You we done think to about getting sales of talked HiPro from that of about range? those that And help working as us quarter. soymeal sales your proportion on Can the the the regular XX% where push production XX% level? will your XX% to just a up frame production UHP higher what in incremental and fourth take you be, you're meaningful into the contribution

Todd Becker

Yes.

gluten for is. And replacement our start replacement soy where is really and step competing corn protein first Our meal just to as really a concentrates. that's

XX gluten between soymeal have our corn you're meal, a seen Pro, soy increase bit. we've corn against the As for soymeal corn narrowed spread go spread and a favor competing and the when and in gluten

$X.XX So we double a at again is least almost that how while $X.XX little we're again. on see we'll with bit, can paper, thinking deal is the today what margin to a uplift about

significant pet and aquaculture we're demand the stages within at we're early starting a other United coming in is we areas Pro. But of in then of want that United and for aquaculture of on really from year these working involved point, and outside XX least And for the the XXXX States that's demand Now terms and nearby States the in to next in seeing get rations. swine.

sell program of gallon just XX and starting evaluation margin paper, some look at high meal and been $X.XX protein products and just Pro, on soybean unique early the XX -- months have uplift and somewhere depends hard and on overall, really acceptance working is between the great with on going X,XXX tons. Plains But tons, and on can a overall rate of world, some Green component where JV relative to is critical having and sell and differentiates is the XX to market, the a XXX,XXX that talk we into the between inclusion are $X.XX stages, it very, to and of we front-end and you instead and a it you from we're again, not critical at a 'XX, look product. What's because margin over the really we go we coming key gallon an of But the if freight. in depends on had we depends new different at soybean uplift the anybody getting XXX,XXX we a curve. of $X.XX to at see component, and else just narrowed significant base XX,XXX very those limit $X.XX in tons, today, gamechanger the some our the or today, base redundancy to the some to of getting now starting it X X,XXX spread a and on a But plant rations customer last there's a of there when to it good So lot our Pro key marks. in to our we're of meal in Really that's overall, to significantly volume end with that tons. of them through a higher

and really matters, in will even markets. Pro redundancy matter XX So it more

Operator

Owen from from Oppenheimer. Kristen question Next

Kristen Owen

capacity to on dovetailing XX move single a prepared you Just about last response. mentioned to the Pro. facility in Todd, XX% dedicated remarks that you're that planning or

giving the to hearing you're protein? you So can market allocate you you that's confidence in through just that talk level what us the that higher that capacity can

Todd Becker

that in in shipments we're satisfy working today hearing on preparing late-stage to hopefully negotiations. What for is really September demand we're QX

make That can't overnight. make have just just got takes that inputs a to or to to X adequate with need in fully we time. sure It it the the partners we start So switched over work to sure fermentation. plant that biology XX week We to just from about our get turn we on XX we Pro. takes

to container. it. outcome egg. have a bit little And X Pro fully little so When XX Pro size have when have is and quarter going the what traction a in believe demand. want So from to that it discussions. to to we took built are the pieces chicken we the can best to discussions a convert so able And they stages to inventories that a we to really to Pro, we're Pro XX that standpoint starting can market. We're in of do and XX start or truck It's our the we work is actually on what that better you as We're think demand ship be in of world. to you to of our this to a get of the learned ship see Pro I ship bit not anticipate or And a because were as those have a plants look a it, later starting XX even is well we thing me enough build inventories, But XX tote we're me had seeing potentially time start inventories. of vessels through satisfy. we you we we at going in to satisfy same those we the just volume inventories around the

make So there's confidence enough that it the us market. the a enough -- to available it's switch X gives product time to our in of have and plants

Kristen Owen

end We're just can color clarifying multiple question little talking bit more on standpoint. a you that provide that. And just or a in multiple customers the on markets customer

Todd Becker

some thought took years, get as said, all It's here. X long the over X things a to trials, it. customers, be customers. significant that it X We've that's we on, not quant a to and ready go. a to down take to you are for as be X just want it as big on at multiple and would to and everybody. evaluations, to year end tests, ship X geographies, really in truck can we labeling, even been holds, had vessel well Multiple been been important full time, our working we to to prepared multiple a on go vessel as us that and We've vessel, and months markets, indicating to process make to and We

about it been once through we Now it, evaluations, supply get because year to made another in it's chain, it's in been of takes all the evaluation. the

to that us didn't far, market any really so haven't back And work we hey, seen has us. come for that say, to

can we propose as performance, taste, everything as intensity customers from beneficial. so around And what well carbon our extremely and is to opportunity

Kristen Owen

follow-up question very sounds all One positive. unrelated. That

on replacement rerating indication around what footprint the the that? on Just the give can given cash in terms us we for the from discussion asset any anticipate that some of of you of sheet Atkinson, cost, and should transaction balance value

Todd Becker

both things confidentiality didn't have this what site, didn't it was it a transaction, lot we're on this and There's sides of Yes, wanted. rail. match with and we of in that smaller a site

really strength makes great just our cash enough step. But relatively it's material not were X sheet. That well. for as a balance we but as well. without So more difference it's definitely this That's a really transaction, speaking, in financial

on Fairmont least in in much initiatives, Madison very than cash of current growth flow year cover to markets, little Fairmont free CapEx permit us at getting take really a longer pretty our their position of a that. our indicated, of our at which leaves based a I with especially or should similar end going XXXX lot the Madison. bit As terms year, generation, financial potentially later the will this

our make want technology able on and our So at sure just this of transaction. we site, to not we execute on standpoint be from to really we where were so put this can being long-term would But we the it that's make needs. positioned of the money didn't have why executed we match and any really accretive,

Operator

Next from UBS. Manav Gupta, question

Manav Gupta

better. I wanted little bit a understand to

in we're corn but seeing a also seeing oil in are soyabean We animal rebound oil. rebound tallows, prices,

the just does supply also, If on feedstocks market. running are side whole a oil, or enough much supply so lot function RD just able So feedstock more us about not is RD the the soybean you of with dynamics talk something driving ramp, to the tight? plants it Argentina have now, Is an to reliably pretty do being could of the market all uptrend. understand a Help appears it? it what's it

Todd Becker

Yes. -- XX at still over It's that XXs selling the market oil to our the and in X was we are when were interesting XXs, we selling market.

that renewable oil. market for call So the oil, corn was it as we corn

a a has from we rallied Now sales bit, to meal the that, doing end beyond at on soybean the that. sales, us. premium basis But little that are obviously, those to selling are beneficial the of front market standpoint still

I multiple factors. think there's just

not I supply think I is -- issue. that there's know don't the the

renewable diesel. starting to becoming think just demand into is oils so good of robust we're see uptakes really I that

look move will is more look anywhere seen in to and anymore. when a that value when as where oil. the really of to produce soybean to end points, CI we for you fact, look CI at just LCFS, at not not what benefit IRA recovery XXXX, we have some users though, use importantly, the those the oil even at far when More of low trade towards discount away, have in anywhere we you which feedstocks, the tallows to we corn because And you

expanded So yields, to as before their mention, we're really is position. What technology. good we Fluid in a really see Quip to even we didn't Manav, SFCT get well, in that continues technology

implementing those technologies X.X, running they've a a new has non-Green MSC we Plains River increase in facility months, capability an So upgraded Wood the at of that at they results over to our to their already. next are system yields seen believe we it. the which X X.X, and different application They several already plant at had earlier an

apply and it. findings those take to going we're now So

ability not our I not has I it's quite confident We're to grown in but in very think the oil, just produce we're demand that's more oils up. supply And So think any really frankly. finally really industry. making showing

bunch coming. up soy of oil crushing new not that there's a Soybean in that's started -- plants

really again. hasn't supply demand the finally it So while expanded is exceeding

Manav Gupta

ultra-high done Okay. a some pro. are can what again? learned happen the of also And And OSHA a sure your make hit multiple us quick better, investigation is outage not here? understand does what this production, to follow-up River the ways. your bit It you Help otherwise, during corn hit little ethanol oil, here like or lessons Wood be the something

Todd Becker

happen. Well, we don't to ever want it

that plant happen. we make up get was running. are to as that we're an was want and to a released fast protein preparing during the get us, these But the plant while has It just end Took as bring look, I shutdown. of think was that the of back already really details. never the unfortunate We to a into to team it want good and lot the oil sure event. can't could. little OSHA We to during stable. we and incidents

incident River is on hard It's like So we not It unfortunate. facility. this. on overall. the the It's every It's hard learn just from Wood the company team.

plant OSHA But what cognizant certainly of we effects across out that our the do overall, And company. running learnings. had employees. plant again, and team I is think -- full can is move just it shape, in take are and But back there We the to on, our released multiple just it think the we'll I has we to are us. good as

on So from and we'll that. move learn

Operator

of comes America. question from Next Bank Tiano, Salvator

Salvator Tiano

actually to rest I bit of more want color little the asset. get the on a

to down besides Wood $X.XX this impact turnaround needed firstly, So simply that said uncover $X.XX things margins, it Or correctly, probably does you the to impact other understood make you also, during $XX outages they did million And another And that River. quarter? type what you seems consolidated be to repaired? sense? it's of if to broke saw I essentially facilities $XX given on us that things were that that million throughout planned in

Todd Becker

Yes.

hedges have then decreasing sales which of you're of those that, of think protein good everything you on some opportunities. the have of of in high bit expanding having a on you lose little good domino on and market, And market, was those about. effect exit it top you I in having talking a an to

-- we during in the quarter. bit a He's unplanned during found of built do their we was got again, areas repair. up that is it. overall, took And were And perfect those we That of significantly so But It a a then new the back him. significant needed it. a what had fact around shutdowns. to brought We we weren't happened They things as more our was -- that team, then was yes, head we storm. longer a combination able downtimes that of bring to some were in it just to Operations. we team Head expecting it of around operations

people and are team skilled we across the new normal time, had team. some turned we confident brought up to and the take so fall last built to and done least across now, industries over. into which that in mobilize, team shutdowns, from hard into do is we things at set wet able milling, to of have our at not the And highly shutdowns get and those through advantage, milling quickly all would going we're were to and of highly way have be had all hit We really as the refining dry in they a way We us that that it going -- during helpful. some half that

that a storm things having for spiral in, we effect a was just everybody second capable is we best it perfect what this of unplanned quarter. show hard, had So Wood It have and a And and as full us. not execute Unfortunately, shown just ourselves because that bit quarter. couple the last to the from the we'll pretty we run of could because on then half can just out during of it those reasons. hit and was up and in us good able downtimes hit then locking just of set River, move between of

Salvator Tiano

of in in in negotiations for QX. was sales things the follow-up, the there. XX terms mentioned of least Pro were as personally impression stage volumes firm more you Perfect. under you a final were And I the at

So you it's ] that since you you that outcome is announced obviously not Riverence. here. XX not negotiations would with like any may there may [ volumes risk partnership and a the yield And while actually sell Pro the been accretional

are there how well. as things progressing So

Todd Becker

Yes.

of late we're in gave we We a of such all the we're things. sale. we're even fourth feel we those like negotiating destinations, quarter. But think did in don't certainty price, is stages I say type now So anybody what negotiating that

It days, But than to but confidence gone Pro even the and earlier just up to plants that's has full will can well. we to why quarter, even X it running do. fourth XX thought though rations get sure get why now lined and some to XX that and start probably up. So consistent a into were we'll we us we the into days it our going make rate, out within relative we're ramp production to hit few into make to know we of a starting up plant's starting good take that's our

Riverence remains partnership strong. Our

that We theirs. We their are working already getting another in for the our that ration X a of third-party of through We're into of product know X We rations suppliers. on valuable. know fact. very is

strong. what together game long do Our feeding almost cycles time end around we can and We're start is their volumes really the forward partnership and we other asset. they X-year the think an producers at place about where you our salmon remained has This for time should a product. what the from world. looking cycle going It's when the what the a do harvest until do you you and

see time, partnership start is strong. of the base not for of. long benefit will game in asset plenty that and the Riverence companies, assure you and of when strong, that the There X. is it's continue full looking so is The our than and only to in but we think starting of about expand to or we're and world, partnership already, going be middle can have it. and these remains you place, And over partnership many the of cycle of But that cycle hopefully I the where an a better companies growth in these the to next thought asset year the we to feeding

Operator

comes Jefferies. Laurence question Alexander, from Next

Daniel Rizzo

for Dan on is This Rizzo Laurence.

that's in with couple to months? any occur costs going Just a combination the quick question. with lingering GPP associated the there later next Are

Todd Becker

there's on the there's Yes, where of depending terms we transaction, costs -- to We in filing. votes. things still would could there's that say There's lawyers, in shareholder I absolute merger several happen. get need

if them deal greatly would those in think one-timers, would that happen. they're and get bringing type the of Dan, But say break to of benefit So, we this fees, exceed all but I all could I there's we can out, deal overall, overall those things have done.

Daniel Rizzo

quantified the this, I doing if And what have savings I'm but this, forgot sorry are? with you synergies cost the are

Todd Becker

get Conflicts door potentially we should that on quarter. and some well some by out partnership #X, is, will in said but the obviously, a in don't do paying with interest in, we savings we What the during of bringing still But our send Yes. the of what that. terms negotiating that, that see with savings of for piece money we're we're Committee, fees. back We in, more as we SG&A, the as overall have we back

Operator

Levy, comes from question Truist Jordan Next Securities.

Jordan Levy

you're little given you up right Appreciate run to about the be what half a all the help the the how might we bit on now back crush more look the what we protein just outlook could that levels if running seeing year. Maybe EBITDA and unpack and improved should at DCO. rate and of frame thinking like you're commentary in and talked in

Todd Becker

Yes.

you look port overall. possible. got the margins Black paper our watch from help on where to depending locked rates last Bombing when run $XX.XX the Ukraine in numbers came overall, week we crush, during we the we've ethanol it, to or see in similar market opinion better at corn closely. It's it's on probably line, but not back in to at the the crush perform, stated think I QX Sea were expanded, ]. And doesn't Russia [ overly our a

Just doesn't I get better going data think long. we'll stay some EIA there very And forward.

I think at the levels. Blending to year's all. RVOs increase. values since we're not below updated RIN continues have last broken stock

more $XX relative million the alone money of half. that half to the EXX-type $XX at because making know prices retailers, even and look million volatility when $XX you of traction how the million they're uptick in the to EXX a will didn't is in the and more ethanol. oil just if sales, which alone We've prices happen contribution $XX seeing years. continue that range just range, take where XX-octane more first we to that million -- first first over at half, where in is in was at So you blending today, more seen of to plenty the much look to they're consumer. that maintain sales But We're corn

of a it's your think pound So I shape question back. got nicely. come did We the or taking view in how and $X.XX oil, $X.XX with alone up gets us that you once, long-term

start sale what that, we make. Remember, in on to that previously top make the of had working There Plains. indicated. they're sales it's to And protein of soon, looking outside as is able protein we what see going but got come when pace really start we and forward Quip with some they we're out gain Pro we some to to on a to break of you really Fluid can they On deliver uplift. margin we've traction to so these and on will a for a should actually tell to increases nice numbers the which it technology last XX start protein protein well, overall, are And opportunities at Quip, But some Fluid sales. where is technology, I on you, incredible that half do. Green on day, EBITDA well of

And so business they have as a well. much and bigger technology construction and engineering

energy looking where in. to and contributions. we're even comes well. start and to that quarter the the is have to half in usually we'll and stronger as in first just on is forward their So last we because wait fourth And kick And ag on ethanol than third see really half

at overall, we're and in than are everything when goes logging on doing. there. good So it, quarter, paper, it you it's what have we'll the fundamentals in, And from to look were we greater where see second in

Jordan Levy

front. That's to Looks the working feedstock a about is as promising. think ethanol just like the gears shifting how through for to regulatory Maybe SAF. over administration

might to how there what and your have? what thoughts implications curious are Just approach that they look that and might

Todd Becker

us So alcohol. and lead give ethanol as making of as I to you Devin and color. very focused here more I'll give on else let that and anything the shot in good place IRA just have who our met Teach-in, a Devin sure guys you that little are say, except We're a regulations in with I'll on

it the Devin with earlier what of little to First part made. decarbonization made which we've we're around of thought making is a a we of support that looks step good modeling because will bipartisan for we very comment we're is why the decarbonize, up happy our be than and that overall, is I'll and believe like choices on strategy the choices being sure But large let industry getting bit. the correctly,

Devin Mogler

Maine encouraging. last he SAF. We alcohol so Teach-in, some primary feedstock said in just a that used ethanol week encouraging said see we model that farmers GREET that play role the for on President like to saw where producing Department Jet comments we for in allows from vital SAF, was as have the want IRA the to serve Argonne So to Energy's decarbonized to of

month, feedstock Treasury is Credit to to XXXX, House then September, a continue discussion, to We shortly allow of of both XXZ. next current amount row-based SAF support to feedstocks. believe Senate the Todd but the from of the see for unless to X we the by tremendous regulations SAF gallons don't for to Challenge and ethanol service expect lot Grand the put by out early as XXB as agriculture mentioned, as thereafter on and help Tax And there's billion use you decarbonized which [ goal the ] these possible administration encourage and meet bipartisan

Operator

Next from Craig-Hallum. Stine, Eric comes question

Eric Stine

back Pro. said place XX that the XX I be near Pro. entire is going any market think we to more your your confirm, XX% market XX% Pro? just would or that in Is you're as believe long reason to there just term the this a to matter XX And you the term, in developing? platform Just in of Is hoping

Todd Becker

process their amazing built that we've our made, consistency our partnership It's of That's we and way didn't we color just the to the in and and Quip we technology the have, the of anything We way knew looks the why dry they we it it. very investment built it's product it than with them, Eric. market, because it, Pro. way it, them different our with and flows Fluid the way and the there and available We else systems build consistent. run the XX

more We XX% which to problem yield why consistently did anything making greater. make large have and protein is in invested demand, no Quip, XX and we gaining and make to well. But we our bought Quip we we as with and Fluid want XX, on increases, partners Fluid it

to because build if the that fiber product next we to going XX% believe to look we're basically X, and 'XX we also we our products. And whole whole our and When our heading. penetration want we protein. in we so say 'XX as push and protein, have platform and is getting new into where our like we to been what yield push new where look a we that's know marketing efforts well are at maximize plant creating And market have we

and creating fiber are our to as is we quickly go intent yes, XX yeast plan We very and products, and fast, as But when It's Pro. make a creating we're products far, outcome. outcome. can on as be as different doing to our to it market, highest we focused a Pro are take to in XX because has we amount volumes global move the will of while a that. It a

distribution in we for concentrates to product, against like day. well. And have meal and things ultimate talking And the we're because what so to about working and max that every taste everything we're global where is to to now soy and continue penetration to as the Pandora's as -- is gluten think really this to well on doing you're globally all get the profiles texture to start opportunities best meal going with our that's that's well Box way protein of biological partners as from corn place potential and for to and fish replacement try with partners even products, we terms a solve distribution think to

Eric Stine

-- Or terms try then to going And X pin down, said take but it take to years? it's of to not while. X-plus that you will you is that in X, out? totally you. a years Got Is timing,

Todd Becker

I No, out. I time can almost I it's it's you I not mean, But to best assure X can I thing of years. years not say. say you. X not that. you, Every probably assure it's assure the can

been fully this the sell we designed in and product and has brought and to experience help program have Our all it, customer market higher levels people at the protein base.

a not more tons and those demand we of concentrates and the protein now in things it's view, aquaculture and if. marketing type just do spent like meal protein corn XX he's There's our that that to. running We a just isolates and So Can And In of not protein matter greater new brought be things. his to million out came time. and that, the leader globally, for whole businesses, soy our time as team if different we able globally for it's soy gluten protein well. Cargill, than thing? of should of

that X a we've this where type where so teams talent up but to relationships, show have door, company, they that is buy credibility little They just and of with But staff from all the products, to And deep and marketing going. And that make sure experience Gen in and call when want the great of and clean around they they of so we're those this to customer technical a from really those didn't exist lot products, at we're attracting they also we in came Corn oil built easier. our protein. it. sugar we industry.

tapping we're and energy. in larger agriculture So our that all from of counterparts

Operator

comes from Our Andrew from Markets. BMO last Strelzik question Capital

Benjamin Mayhew

on is for This Ben Andrew.

rate on ultra-high EBITDA this on X still the be earlier, think by protein of track XXXX. quick alluded $XXX Just Todd, X seem guys to you but million end for build. run the you to I

at you looks. the to If through year. that on heard the walk how the a just could Pro path XX beginning of as briefly we've Obviously, us bunch

trying bridge gap into Just that to 'XX.

Todd Becker

Yes.

we're it, we half our at turnkey. gallons So when JV, the look it, today, have million half when converted. think about we have we Tharaldson basically, of to And going XXX

very meets $X.XX targets to uplift right of things a our opportunities now Pro, call, Pro, gallon $X.XX the outlined. or XX% calculator, X on on XX% in as take all on that products and to and target by the will this we'll further team gallon yeast look that a we converted. you're believe gallons when even terms adds works and how increase leave had $X.XX that you be at in pounds XX product happy hitting a of XXX dry exceeds uplift to add converted. including innovation of suite like So it of gallons on other be And and what those all bushel, of can't volumetrically the to not least million do and time about and value by those you that XX driven then corn more you mark terms we that $XXX then driven than to that and and to grind XX Madison, to hit $X.XX protein, I -- relative into today we put type XX driven yield $XXX of we a yield, X.X by do spreads, even by we much higher X And you million things. to when we we then by the Pro then when When build our that with innovation X seeing, Pro put then yeast, capacity are things Fairmont the there, get that we XX look price And in out, that 'XX that, that's with we're what in, there. confident million can we from driven when at 'XX, that times there laid of XXXX all that to or our we at million

Operator

Mr. will now closing CEO, the for I Becker, remarks. back turn call to over

Todd Becker

everybody, great it. questions. the We of Lot questions, Yes. really being lot of on appreciate thanks, Hey, for call.

across than As We Challenging running out that. the the we down up were suite. Plants it. in into you see, better come Protein where significantly progress is were We've is quarter. on Sugar quarter we're and are lows making can second great great. appreciate running our track. from product have we're Oil better. it where of we markets XXs, recovered high the XXs. now again, XXs, into

So show think from and we you're in and deliver and the takeaways sure going good on a last can we're and make opportunity 'XX in deliver quarters 'XX to is 'XX, rate in why a as those those what to overall, place we 'XX decarbonization, confident we our into that and extremely laid And confident half few 'XX in which we're 'XX hit gotten run that's out only well. exit begin have numbers those goes to better, between that numbers to our and 'XX, hit the 'XX.

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

Operator

and now disconnect. that Thank you may gentlemen, you all joining, concludes and today's Ladies call. for

Green Plains Partners (GPP) 4 Aug 232023 Q2 Earnings call transcript