Green Plains: Strong Demand Is Beginning To Offset Low Margins
Tristan R. Brown
Tristan R. Brown
Tue, Aug. 23, 3:19 PM
- Spanish renewable energy firm Abengoa (NASDAQ:ABGB) is selling five of its Midwestern U.S. ethanol plants for $357M, with Green Plains (GPRE +6.2%) agreeing to acquire three of them for $237M.
- GPRE, which operates 14 plants and has an ethanol marketing unit, is paying $200M for Abengoa plants in Mount Vernon, Ind., and Madison, Ill., and outbid another company for the York, Neb., plant with a $37.4M bid at bankruptcy auction; the three plants have a combined annual production capacity of 236M gal/year.
- ABGB sought bankruptcy court approval in June to sell the plants as part of an attempt to divest non-core assets.
Wed, Aug. 10, 8:44 AM
- Green Plains (NASDAQ:GPRE) -3.9% premarket after saying it signed a letter of intent to buy a company in the food ingredients industry at a proposed price of $225M-$275M.
- GPRE, which primarily is in the ethanol production and marketing business, says the purchase would be complementary to its existing businesses and "part of its growth strategy it plans to opportunistically invest in the food and feed ingredients markets."
- GPRE says it is currently only conducting due diligence and is in preliminary discussions with the potential seller regarding a stock purchase agreement.
Mon, Aug. 1, 4:18 PM
Nov. 30, 2015, 3:28 PM
- Biofuel names react favorably and refiners negatively to just-released EPA biofuel targets that come in above those proposed by the agency in May.
- Fuel suppliers will be required to mix 16.93B gallons of corn-based ethanol and other renewable fuels into gasoline this year and 18.11B gallons next year, according to the newest EPA targets.
- The final 2016 standard for advanced biofuel is nearly 1B gallons, or 35% higher than actual 2014 volumes.
- Biofuel names include: PEIX +17.7%, REGI +8.1%, AMRS +7%, GEVO +4.9%, SZYM +2.5%, GPRE +6.2%, REX +3.2%, ADM flat.
- Refiners are pulling back: VLO -0.9%, TSO -1.5%, HFC -2.6%, MPC -0.3%, PSX -0.9%, WNR -0.7%, CLMT -2.6%.
Nov. 19, 2015, 2:56 PM
- Green Plains (GPRE +1.5%) is initiated with a Buy rating and $27 price target at BB&T Capital, which says the market's view concerning the sustainable margin structure and long-term supply/demand dynamics of the U.S. ethanol industry - and thus GPRE - is too pessimistic.
- BB&T says GPRE has demonstrated its ability to generate mid-cycle margins that should translate to EBITDA of $300M-$325M on its projected 2017 asset base, yet the shares are trading at just one third of replacement value.
- The firm finds GPRE's balance sheet is strong, free cash flow generation is attractive, and management is a proven commodity, and believes patient, value-oriented investors will be rewarded.
Nov. 3, 2015, 11:26 AM
- Green Plains (GPRE +7.3%) agrees to acquire a Texas ethanol production facility from Murphy USA (MUSA -0.4%) for $93.8M, the second ethanol plant purchased by GPRE in a week.
- GPRE says the Hereford, Tex., plant, with an annual production capacity of 100M gallons, is near a large concentration of cattle feedyards, a top market for the ethanol byproduct dried distillers' grains.
- The sale follows last week's $18.2M purchase of Virginia's sole ethanol plant, which had been idled; the plant has an annual capacity of 62M gallons.
May 29, 2015, 11:15 AM
- Ethanol companies rise while refiners are off session highs after the EPA announces its renewables fuels mandate.
- The EPA proposes requiring 15.93B gallons of total renewable fuel in 2014, 16.3B gallons in 2015, and 17.4B gallons in 2016, but the proposal for the total renewable fuel requirement falls short of levels Congress mandated, which were 20.5B gallons in 2015 and 22.5B gallons in 2016.
- Also, the EPA cuts 2016 corn-ethanol quota to 14B gallons; U.S. law required 15B gallons of ethanol for 2016.
- Ethanol exposed companies are mostly higher: ADM +0.7%, GPRE +4.2%, PEIX +4.1%, REX +1%, DAR +2%, CZZ -2.2%.
- Among refiners: HFC +0.3%, TSO +1.3%, VLO +0.8%, WNR +1.9%, PBF -1%.
- Biofuel related stocks: GEVO -8.3%, SZYM -2.7%, CDTI -1%, REGI -0.7%.
Mar. 9, 2015, 12:45 PM
Mar. 9, 2015, 10:14 AM
- Green Plains (GPRE +13.7%) says it has filed for an IPO of its downstream ethanol transportation and storage assets, hoping to raise $200M-$250M by selling an unspecified number of limited partner interests in a new MLP.
- GPRE says the initial assets of the MLP will consist of the company’s downstream ethanol transportation and storage assets in 12 states through the midwestern and southeastern U.S.; it owns eight fuel terminals with a throughput capacity of 822M gal/year.
- GPRE says the date of the IPO, the number of common units to be offered and the price range have not yet been determined.
Sep. 11, 2014, 3:48 PM
- Pacific Ethanol (PEIX -7%) and other U.S. ethanol producers are sharply lower, apparently on fears that the industry in America could be hit by a surge of Brazilian imports.
- Brazil yesterday approved a tax credit for domestic ethanol exporters, which the government believes will help its domestic exporters "because it cheapens the Brazilian export and pays a devaluation of the exchange rate," the country's finance minister says.
- Ethanol demand has fallen in Brazil in recent years, with only 25% of flex-fuel cars there using ethanol in 2013 vs. 82% in 2009, according to Bloomberg.
- U.S. ethanol makers already have been pressured by the EPA's proposals to cut the amount of biofuels that refiners will be required to blend into gasoline, and moves by California regulators that have given Brazilian sugar ethanol a better greenhouse gas rating than corn-based ethanol produced in the U.S.
- Also: GPRE -4.4%, REX -6.7%, KIOR -8.8%.
Aug. 27, 2014, 2:41 PM
- Rex American Resources (REX +12.8%) reaches new all-time highs after posting strong beats in Q2 earnings and revenues, as the company credits favorable market dynamics combined with the efficiency of its plants for leading to record Q2 net income.
- Says cash rose 45% from year-end 2013 to ~$152M, plant-level debt fell 18% to ~$62M, and debt-to-capital ratio was 16% from 21% as of Jan. 31.
- The upside Rex results appear to be boosting biofuel and ethanol related names: PEIX +5.6%, BIOF +4.9%, GPRE +2.6%, REGI +1.8%, ADM +1%.
Jun. 18, 2014, 11:31 AM
- Pacific Ethanol (PEIX +1.7%) ticks higher after the American Petroleum Institute express concern that the EPA may raise ethanol requirements from its 2014 proposal.
- "Almost half of 2014 is behind us, yet EPA still hasn't finalized the ethanol requirements for this year," API says. "As the process continues to grind along, we are also concerned that EPA will raise ethanol requirements from its 2014 proposal, based on the specious reasoning that E85 - a mixture of up to 85 percent ethanol with 15 percent gasoline - is a workable solution. It is not."
- Other relevant names are all lower: GPRE -1%, REGI -1.4%, BIOF -1.3%, REX -0.1%, ANDE -0.3%, ADM -1.1%.
Apr. 29, 2014, 5:43 PM
Mar. 31, 2014, 3:59 PM
- Shares of BioFuel Energy (BIOF +132.4%) more than double after the company received a $275M buyout proposal late Friday from Greenlight Capital and James Brickman of JBGL Funds for the 64.5% of the company they don't already own.
- Greenlight's David Einhorn and Brickman said the proposal provides an opportunity to acquire an interest in a business with long-term equity potential and an attractive portfolio of assets.
- BIOF said its board will establish a special committee of independent directors to evaluate the transaction, as well as alternatives for the company.
- The move is providing a lift for most other alternative energy companies: KIOR +39.7%, GPRE +3.7%, REGI +4.4%, SYNM +5.9%, REX +0.1%, PEIX -1.9%, GEVO flat.
Dec. 11, 2013, 3:58 PM
- Shares of ethanol makers slide as an EPA official tells a congressional panel it’s not feasible for gasoline refiners to use as much ethanol next year as had been mandated, which is why the agency proposed easing the requirement.
- Producers of ethanol, biodiesel and advanced biofuels have criticized the EPA’s proposal, saying it undercuts a growing, domestic industry.
- ADM -1.5%, BIOF -3%, GPRE -3.8%, REGI -4.8%, SYNM -5.7%, PEIX -9.6%, KIOR -12.8%.
Nov. 20, 2013, 12:59 PM
- Green Plains Renewable Energy (GPRE +13.2%) is upgraded to Overweight from Neutral with a $20 price target, up from $17, at Piper Jaffray, which sees the ~10% selloff in shares following the EPA's ethanol mandate presenting an attractive entry point.
- Investors are overestimating the impact of the mandate on ethanol demand, the firm says, and with corn prices trading lower and the wide price gap between ethanol and conventional gasoline remaining, it sees the ethanol margin outlook staying stable or potentially improving over the next few months, which contrasts to the market's perception of a cut to the RFS mandate.
Green Plains, Inc. produces fuel-grade ethanol and corn oil, provides grain handling and storage and commodity marketing and distribution services. The company operates through four segments: Ethanol Production, Corn Oil Production, Agribusiness and Marketing & Distribution. The Ethanol... More
Sector: Basic Materials
Industry: Specialty Chemicals
Country: United States