The Andersons Inc., Maumee, Ohio, reported second-quarter net income attributable to The Andersons of $21.5 million ($0.76 per diluted share) on revenues of $911.4 million, up from the year-ago net loss of $26.7 million ($0.94 per share) and $993.7 million. Adjusted net income was $21.5 million, compared to the year-ago $15.3 million. Adjusted EBITDA was $59.7 million, up from $50.9 million.
For the current quarter, The Andersons recorded a $1.6 million impairment charge on the anticipated sale of its Como, Tennessee, grain elevator. And in its Rail segment, it took $5.2 million in charges due to a decision to scrap approximately 600 railcars due to a four-year high in scrap prices brought on by steel tariffs. The company took a $42 million year-ago impairment in the Plant Nutrient Group’s (PNG) wholesale fertilizer business, which significantly weighed on results (GM Aug. 4, 2017).
Wall Street liked the second-quarter performance. Company shares moved up 12.96 percent on Aug. 8 to close at $40.10.
Although the company reported significantly better results in the Grain and Ethanol units during the second quarter, PNG and Rail results were lower than year-ago levels. Sales volumes of primary and specialty nutrients were reported to be strong, but margins were pressured. Lawn and contract manufacturing, however, were bright spots for the segment.
“Our Plant Nutrient growth continues to be impacted by unfavorable margin conditions,” CEO Patrick Rowe told analysts on Aug. 8. “Because the group’s year is significantly influenced by its performance in the first half, we think it’ll be challenged to equal our full-year adjusted 2017 results. On a positive note, primary nutrient prices are beginning to stabilize and improve, and the inventory appreciation is starting to return to the market for the first time in three years.
“The group is focused on reducing its costs and expenses through manufacturing excellence and growing the top line to improve sales execution. We’re also building on the momentum in our lawn and contract manufacturing business,” said Rowe, adding that the PNG would need more time to recover.
PNG reported second-quarter pretax profit of $15.1 million on sales of $303.1 million, up from the year-ago loss of $25.8 million. However, year-ago adjusted pretax income was higher at a positive $16.2 million. Adjusted EBITDA was $23.5 million, down from the year-ago $24.7 million.
PNG six-month pretax income was $16.2 million, versus the year-ago loss of $19.2 million. The year-ago adjusted pretax number was a positive $22.8 million. Adjusted EBITDA was $32.8 million, down from $39.9 million.
| Volumes Sold (000 st) | 2Q-18 | 2Q-17 | YTD-18 | YTD-17 |
| Primary Nutrients | 657 | 628 | 859 | 845 |
| Specialty Nutrients | 247 | 221 | 433 | 430 |
| Other | 13 | 16 | 29 | 39 |
Company-wide six-month net income attributable to The Andersons was $19.8 million ($0.70 per share) on revenues of $1.55 billion, compared to the year-ago loss of $29.7 million ($1.05 per share) and $1.84 billion, respectively. Year-ago adjusted income was a positive $12.3 million. Adjusted EBITDA was $87.3 million, up from $72.3 million.