The Andersons Inc. benefited from a one-time $74.2 million tax gain under the new tax laws in the fourth quarter. Net income attributable to The Andersons was $68.4 million ($2.42 per diluted share) on sales of $1 billion, up from the year-ago $10.1 million ($0.36 per share) and $1.1 billion, respectively. EBITDA was $25 million, down from $40.7 million. Adjusted EBITDA was $53 million, up from $40.7 million.
Full-year income was $41.2 million ($1.46 per share) on sales of $3.7 billion, up from $11.6 million ($0.41 per share) and $3.9 billion, respectively. EBITDA was $87.4 million, down from $123.9 million. Adjusted EBITDA was $157.4 million, up from $123.9 million.
“Our fourth-quarter performance was solid considering that we continue to face some challenging market conditions in several of our businesses, and we incurred some impairment expenses,” said President and CEO Pat Bowe. “Notwithstanding expenses associated with our decision to sell the three Tennessee elevators, the Grain Group recorded better year-over-year results highlighted by significant improvement by Lansing Trade Group. For the full year, our adjusted Grain earnings improved by almost $40 million.”
The company sold three Tennessee grain elevators in Humboldt, Kenton, and Dyer to Tyson Foods. The sale is expected to close in March. The company is exploring its options for three remaining elevators in Tennessee. The company took a $10.9 million ($0.24 per share) pretax impairment charge associated with its Tennessee grain assets. The company told Green Markets that the elevators do not sell crop inputs.
“As we anticipated three months ago, ethanol margins in the quarter were lower again year over year in spite of continued strong U.S. exports,” he added. “Margins continue to be lower than last year at this time.”
He noted that the Rail Group’s utilization improved for the third consecutive quarter, and the group purchased more than 1,200 cars.
“The Plant Nutrient Group’s (PNG) margins continued to be challenged by an oversupply of nutrients and low farm income, even as year-over-year volumes rose considerably,” said Bowe. “We also wrote down the remainder of our wholesale fertilizer goodwill balance due to the persistently soft fertilizer market.”
The fertilizer unit, PNG, had a fourth-quarter $17.1 million ($0.59 per share) writedown. PNG reported a fourth-quarter pretax loss of $18 million on sales of $136.9 million, compared to the year-ago loss of $3.8 million on sales of $136.4 million, respectively. EBITDA was a negative $10.2 million, compared to the year ago positive $4.5 million. Adjusted EBITDA was a positive $6.9 million, up from $4.5 million.
As in the last several quarters, the business was impacted by low nutrient prices and an oversupply of product during the period. The group’s performance in the quarter was also hampered by continuing pressure on margins, even though the group achieved a healthy increase in volume. Base nutrient (NPK) volumes were up almost 10 percent year-over-year, while higher-margin, value-added nutrient tons (low salt starter fertilizers and micro nutrients) were up nearly 18 percent. Volumes for products in the group’s other businesses (farm centers, lawn, and cob) were down 27 percent; all but 10 percent of the decrease resulted from selling the group’s Florida farm centers in the first quarter.
Margins per ton were considerably lower in both base nutrients and value-added products, finishing down 25 percent and 11 percent year-over-year, respectively. Margins per ton improved considerably for the farm centers and the cob business, but were flat in the lawn fertilizer business. Those volume and margin changes combined to reduce gross profit by about $4.8 million, or more than 18 percent.
The company expects PNG’s wholesale fertilizer business to continue to be challenged in the near term until some supply/demand equilibrium is achieved.
PNG reported a full-year loss of $45.1 million on sales of $651.8 million, down from the prior year income of $14.2 million on sales of $725.2 million, respectively. EBITDA was a negative $12.1 million, down from the year-ago $49.3 million. Adjusted EBITDA was a positive $47 million, compared to the year-ago $49.3 million. The 2017 results include a $4.7 million gain on the sale of the Florida farm centers. Wholesale fertilizer volumes were slightly higher and margins were down about 5 percent, including more than 8 percent for the value-added product line.