Green Plains Inc. ((GPRE)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Green Plains Inc. recently held its earnings call, revealing a balanced outlook for the company. While there were significant operational improvements and progress on strategic initiatives, such as their carbon strategy and cost reduction efforts, the company also faced financial challenges, including a notable net loss and a decline in revenue.
Operational Excellence and Cost Reductions
Green Plains has achieved remarkable operational efficiency, reaching 99% capacity utilization and recording the highest ethanol yields in its history. The company has successfully met its $50 million cost reduction target, thanks to these operational improvements, which have also helped maintain low quarterly operating expenses.
Carbon Strategy Progress
The company has made substantial progress on its carbon strategy, with its CCS infrastructure on schedule to begin operations in Q4 2025. The extension of the 45Z tax credit under the One Big Beautiful Bill Act is expected to improve the company’s carbon intensity by 5-6 points and could potentially contribute $150 million annually in EBITDA from 2026.
Increased Liquidity and Asset Sales
Green Plains has strengthened its liquidity position through the sale of noncore assets, including the Tharaldson JV, which raised $23.5 million in cash. Additionally, the company completed the sale of RINs accumulated over several years, further bolstering its financial position.
SG&A and Efficiency Improvements
The company has reduced its SG&A expenses by $6.3 million from the previous year and plans to exit fiscal year 2025 with corporate and trade SG&A in the low $40 million range, reflecting a commitment to efficiency improvements.
Net Loss for Q2 2025
Green Plains reported a net loss of $72.2 million for Q2 2025, a significant increase from the $24.4 million loss in Q2 2024. This loss includes $44.9 million in noncash charges and $2.5 million in restructuring charges.
Revenue Decline
The company’s revenue for Q2 2025 was $552.8 million, representing a 10.7% decline year-over-year. This decrease was primarily due to the company’s decision to exit ethanol marketing for Tharaldson and place the Fairmont ethanol asset on care and maintenance.
Interest Expense Increase
Interest expenses increased by $6.4 million compared to the previous year, driven by expenses related to accounting treatment for warrants and the absence of capitalized interest from prior year projects.
Forward-Looking Guidance
Looking ahead, Green Plains provided several key metrics and strategic updates. The company aims to end fiscal year 2025 with a corporate and trade SG&A run rate in the low $40 million range. It expects to generate more than $150 million in annualized EBITDA from its decarbonization strategy by 2026. The progress in constructing CCS infrastructure is on track for a startup in Q4 2025, which is anticipated to unlock consistent cash flows and long-term value.
In summary, Green Plains Inc.’s earnings call highlighted a balanced outlook with significant operational achievements and strategic progress, particularly in its carbon strategy and cost reduction efforts. However, the company also faces financial challenges, including a substantial net loss and revenue decline. Investors will be keenly watching the company’s forward-looking strategies and their potential to drive future growth.