Green Plains Inc. Q2 FY2025 earnings call

• Jim Anderson noted Q2 was active with asset adjustments, SG&A changes, and a new go-to-market strategy centered on culture change, safety, and data-driven decision-making. - Michelle Mapes discussed narrowing business focus to core operations, progress in carbon strategy with CCS infrastructure on track for Q4 start-up, cost reduction meeting $50M target, noncore asset sales, and liquidity strengthening. - Chris Osowski highlighted 99% capacity utilization, highest ethanol yields, OpEx reductions of $10 million through maintenance and recipe optimization, and the Obion RTO project as an example of operational excellence. - Imre Havasi mentioned improved markets with ethanol exports, corn oil as a bright spot, and protein diversification efforts.

For Q2 2025, revenue was $552.8 million, down 10.7% year-over-year. Adjusted Q2 2025 EBITDA, excluding restructuring and noncash charges, ended at $16.4 million compared to $5 million in Q2 2024. SG&A totaled $27.6 million, a $6.3 million improvement from prior year. Depreciation and amortization finished at $27.6 million, including a $3.1 million impairment. Interest expense was $13.9 million, up $6.4 million from prior year. Net loss attributable to Green Plains was $72.2 million or $1.09 per share versus $24.4 million or $0.38 per share in Q2 2024.

• Back half of 2025 EBITDA outlook supported by rising corn oil prices, strong ethanol exports, and corn crop strength. - Carbon capture start-up in Q4 2025 expected to contribute $20-25 million in Q4. - Policy changes like the extension of the 45Z clean fuel production tax credit expected to boost annualized EBITDA from decarbonization strategy to over $150 million for 2026 from Advantage, Nebraska plants alone. - Cost savings to continue with continuous improvement efforts, aiming for low $40 million run rate for corporate and trade SG&A by fiscal year '25 end.

• Market changes and government policy uncertainties. - Soy protein supply competition impacting protein margins. - Potential fluctuations in corn oil prices if trade agreements with China don't materialize. - Execution risks with carbon capture project implementation and related regulatory compliance.

Q: How to frame EBITDA potential in the back half of 2025 and into 2026?

A: Phil Boggs said back half has a constructive setup with mid-teens consolidated crush margins, and carbon capture starting in early Q4 2025 contributing $20-25 million in Q4.

Q: Thought process behind selling stake in Tharaldson JV?

A: Michelle Mapes said it was noncore, data-driven decision as numbers indicated exiting made sense. Chris Osowski added focus on operational excellence for existing assets.

Q: Clarification on cash flows and Tharaldson sale proceeds?

A: Philip Boggs said $22.6 million RIN sales were part of operating cash, and Tharaldson sale proceeds were collected in July.

Q: Upside on carbon opportunity and monetization discussions?

A: Philip Boggs mentioned policy changes increased carbon opportunity, with $150 million annualized EBITDA from 2026, and Michelle Mapes said discussions show progress to realize anticipated pricing.

Q: Magnitude of cost savings for the year?

A: James Herbert said culture of continuous improvement and zero-based expense approach drive further cost savings beyond the initial $50 million captured.