Major news from The Andersons Inc., Maumee, Ohio, was a 22 percent increase in second-quarter pretax income from its Plant Nutrient Group (PNG), as well as company structure and organization changes. PNG results easily outpaced other company segments both in the quarter and year-to-date.
“I am proud of what we were able to accomplish in the second quarter, as all four of our business groups were profitable,” said President and CEO Pat Bowe. “We are focused on transforming The Andersons into a more cost-efficient company positioned for scalable growth. Our vision is to be the most nimble and innovative North American ag supply chain company. The steps we are taking to transform the organization should ensure that we have the right vision at the right time to continue to serve our customers.
“Our Plant Nutrient Group’s income was up more than 20 percent due to an excellent spring planting season,” he added. “Our Ethanol Group’s navigation of the unprecedented decrease in demand due to the COVID-19 crisis helped produce good results under those difficult conditions. The Trade Group continued to feel the effects of a small 2019 corn crop in the East. Both the Trade Group and the Rail Group felt the persistent negative impact of the pandemic on customer demand. Both groups were profitable for the quarter.”
Under the structure and organization change, PNG and the Rail Group are being combined and will be led by Joe McNeely, who formerly headed the Rail Group. The Trade and Ethanol Groups will be combined and led by President Bill Krueger, who formerly led the Trade Group. Jim Pirolli, who headed Ethanol, has been appointed Senior Vice President of the combined group.
The former head of PNG, Jeff Blair, has left the company. The company confirmed that it has eliminated a number of positions recently, with its actions expected to improve cash flow generation, which will help it reduce debt and continue to grow.
The Andersons said in May that it was targeting total expense reductions of $30 million in 2020, with half of those expected to be permanent. It said it expects further general and administrative cost reductions will be realized in early 2021. The company still expects to spend $100 million on capital projects in 2020, noting that it averaged $200 million over the last three years.
PNG pretax income was $19.4 million on revenues of $279.8 million, versus the year-ago $15.9 million and $270.6 million, respectively. EBITDA was $27.2 million, up from $24.9 million. Total fertilizer sales volumes were up 19 percent, to 962,000 st from the year-ago 809,000 st. This was driven by Ag Supply Chain volumes, which were up 32 percent, to 690,000 st from the year-ago 523,000 st.
PNG six-month income was $18.2 million on revenues of $404.7 million, up from $12 million and $399.1 million, respectively. EBITDA was $34.2 million, up from $29.9 million. Total volumes were up 17 percent, to 1.37 million st from the year-ago 1.17 million st.
Company-wide, The Andersons reported net income attributable to the company of $30.4 million ($0.92 per diluted share) on revenues of $1.89 billion, up from the year-ago $29.9 million ($0.91 per share) and $2.32 billion, respectively. Adjusted EBITDA was $70.7 million, down from $90.1 million.
The company reported a six-month loss of $7.2 million ($0.22 per share) on revenues of $3.74 billion, compared to year-ago income of $15.9 million ($0.48 per share) and $4.3 billion, respectively. Adjusted EBITDA was $85.4 million, down from $132 million.
| PNG Volumes (000 st) | 2Q-20 | 2Q-19 | YTD-20 | YTD-19 |
| Ag Supply Chain | 690 | 523 | 901 | 699 |
| Specialty Liquids | 121 | 133 | 194 | 196 |
| Engineered Granules | 151 | 153 | 272 | 273 |
| Total | 962 | 809 | 1,367 | 1,168 |