World Grain - March 2018 - 14

NEWSREVIEW

Grain group performance buoys The Andersons earnings
MAUMEE, OHIO, U.S. - The Andersons Grain Group's continued
improving performance helped push the company's year-end
earnings. Net income for the year ended Dec. 31, 2017, totaled $41.2
million, equal to $1.46 per share on the common stock, up from $11.6
million, or 41¢ per share, in the same period a year ago.
"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 Pat
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with analysts on Feb. 15. "Notwithstanding expenses associated with
our decision to sell the three Tennessee elevators, the Grain Group
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improvement by Lansing Trade Group. For the full year, our adjusted
Grain earnings improved by almost $40 million."
Revenue for the year was $3.686 billion, a slight decrease
compared with $3.924 billion last year.
The Grain Group generated a pretax income of $12.8 million for
the year ended Dec. 31, 2017, which compared with a loss of $15.7
million. Revenue for the year was $2.106 billion, down slightly from
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"Our grain business results are improving and underlying
grain fundamentals are stable with good grain ownership income
opportunities," Bowe said. "As we expected, however, large
global 2017 corn and soybean harvests have kept world supply and
carryouts into 2018 for corn, soybeans and wheat quite large, which

have kept both prices and market volatility low. That low volatility
limits trading opportunities and continued low prices keep the farmer
less interested in selling."
The company's pretax income for its Ethanol Group was $18.9
million for the year, a decrease of $5.8 million compared with 2016.
Ethanol's revenue ticked up to $708.063 million, which compared
with $544.556 million in the same period a year ago.
"The ethanol business delivered improved results for the third
consecutive quarter despite lower year-over-year margins, which
again, driven by higher industry production and stocks," Bowe said.
The Andersons said values for distillers dried grains (DDGs)
improved markedly during the quarter as the group worked through
the last of the 2016 corn crop's vomitoxin issues. Better international
demand for DDGs also improved pricing and margins. Those two
conditions combined to drive values more than 10% higher than in
the prior quarter but not quite up to the values of the comparable
2016 period.
The Rail Group's pretax income for the year was $24.8 million,
down from $32.4 million in the same period of the prior year. Rail
revenue jumped to $172.123 million in the third quarter, compared
with $163.658 million in 2016.
"The railcar market continues to be oversupplied, keeping pressure
on the lease rates," Bowe said. "As we expected a quarter ago, our
utilization rate rose again sequentially and it exceeded the fourth
quarter 2016 rate. The lease rates were lower year-over-year."

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March 2018 / World Grain / www.World-Grain.com
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World Grain - March 2018

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