REX American Resources Corp (REX) 2022 Q3 法說會逐字稿

Greetings, and welcome to the REX American Resources Fiscal 2022 Third Quarter Conference Call. (Operator Instructions)

您好，歡迎來到 REX American Resources 2022 財年第三季度電話會議。 （操作員說明）

I would now like to turn the conference over to Mr. Doug Bruggeman, Chief Financial Officer. Please go ahead.

我現在想將會議轉交給首席財務官 Doug Bruggeman 先生。請繼續。

Good morning, and thank you for joining REX American Resources Fiscal 2022 Third Quarter Conference Call. We'll get to our presentation and comments momentarily as well as your question-and-answer session, but first, I'll review the safe harbor disclosure.

早上好，感謝您加入 REX American Resources 2022 財年第三季度電話會議。我們將立即進行我們的演示和評論以及您的問答環節，但首先，我將回顧安全港披露。

In addition to historical facts or statements of current conditions, today's conference call contains forward-looking statements that involve risks and uncertainties within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the company's current expectations and beliefs but are not guarantees of future performance. As such, actual results may vary materially from expectations.

除了歷史事實或當前狀況的陳述外，今天的電話會議還包含前瞻性陳述，這些陳述涉及 1995 年《私人證券訴訟改革法案》含義內的風險和不確定性。此類前瞻性陳述反映了公司當前的預期和信念，但不保證未來的表現。因此，實際結果可能與預期存在重大差異。

The risks and uncertainties associated with the forward-looking statements are described in today's news announcement and in the company's filings with the Securities and Exchange Commission, including the company's reports on Form 10-K and 10-Q. REX American Resources assumes no obligation to publicly update or revise any forward-looking statements.

與前瞻性陳述相關的風險和不確定性在今天的新聞公告和公司提交給美國證券交易委員會的文件中有所描述，包括公司關於 10-K 和 10-Q 表格的報告。 REX American Resources 不承擔公開更新或修改任何前瞻性陳述的義務。

I have joining me on the call today, Stuart Rose, Executive Chairman of the Board; and Zafar Rizvi, Chief Executive Officer. I'll review our financial performance and then turn the call over to Stuart for his comments.

董事會執行主席斯圖爾特·羅斯 (Stuart Rose) 今天和我一起參加電話會議；和首席執行官 Zafar Rizvi。我將審查我們的財務業績，然後將電話轉給斯圖爾特徵求意見。

Sales for the third quarter increased by 8.5% as we experienced higher pricing for ethanol, distiller grains and corn oil. Ethanol sales for the quarter were based upon 66.3 million gallons this year versus 69 million gallons last year. We reported gross profit of $11.3 million this year versus a gross profit of $25.2 million in the prior year.

由於乙醇、酒糟和玉米油的價格上漲，第三季度的銷售額增長了 8.5%。本季度的乙醇銷售額基於今年的 6630 萬加侖，而去年為 6900 萬加侖。我們報告今年的毛利潤為 1130 萬美元，而去年的毛利潤為 2520 萬美元。

For the current year quarter, improved selling prices were offset by higher corn and natural gas pricing. Ethanol pricing improved by 8%, dry distiller grain and corn oil pricing both improved by 25% for this year's quarter over the prior year third quarter.

對於本年度季度，銷售價格的提高被更高的玉米和天然氣價格所抵消。乙醇價格上漲 8%，今年第三季度乾酒糟和玉米油價格均上漲 25%。

Corn cost increased by 17%, and natural gas pricing increased by 56% for this year's quarter compared to the prior year as inflationary pressures and the impact on commodity pricing from Ukraine-Russia conflict continued. Corn pricing was also impacted by higher corn basis based upon reduced availability of corn as we approach the harvest season.

由於通貨膨脹壓力和烏克蘭與俄羅斯衝突對商品定價的影響持續，玉米成本上漲了 17%，與去年同期相比，天然氣價格上漲了 56%。玉米價格也受到玉米基差上漲的影響，因為隨著我們接近收穫季節，玉米供應量減少。

Gross profit comparison between years benefited slightly from fewer ethanol contracts sold net of freight in the current year, which leads to higher sales. SG&A increased for the third quarter to $7.9 million from $6.3 million in the prior year. The increase was primarily due to an increase in the number of ethanol contracts that require the freight to be paid by us compared to the prior year, which we classify as SG&A cost.

年度毛利比較略微受益於當年扣除運費後銷售的乙醇合同減少，這導致銷售額增加。第三季度的 SG&A 從去年同期的 630 萬美元增加到 790 萬美元。增加的主要原因是與上一年相比，要求我們支付運費的乙醇合同數量增加，我們將其歸類為 SG&A 成本。

We had income of $661,000 from our unconsolidated equity investment in this year's third quarter versus income of $349,000 in the prior year. The company's interest and other income in the current year increased dramatically to $2 million versus $35,000 in the previous year, primarily reflecting increased yields on our cash.

今年第三季度，我們的未合併股權投資收入為 661,000 美元，而去年同期為 349,000 美元。公司本年度的利息和其他收入從上一年的 35,000 美元大幅增加到 200 萬美元，這主要反映了我們現金收益率的提高。

The discontinued operations reflected in the prior year numbers are from the refined coal business as we entered those operations on November 18, 2021. There was no impact in the current year.

上一年數據中反映的已終止經營業務來自我們於 2021 年 11 月 18 日進入精煉煤業務的業務。對本年度沒有影響。

We reported a tax provision from continuing operations of $1.2 million for this year versus a provision of $4.3 million in the prior year, primarily reflecting the lower level of income in the current year. These factors led to net income attributable to REX shareholders from continuing operations of $3.2 million for this year's third quarter versus $13.3 million in the prior year.

我們報告了今年來自持續經營業務的稅收準備金為 120 萬美元，而上一年為 430 萬美元，這主要反映了本年度較低的收入水平。這些因素導致今年第三季度歸屬於 REX 股東的持續經營淨收入為 320 萬美元，而去年同期為 1330 萬美元。

Total net income per share from continuing and discontinued operations attributable to REX shareholders was $0.18 for this year's third quarter versus $0.85 in the prior year. I would again like to point out all outstanding shares for all periods have been retroactively adjusted to reflect the 3-for-1 stock split, which was effective on August 5, 2022.

今年第三季度歸屬於 REX 股東的持續經營和終止經營業務的每股淨收入總額為 0.18 美元，而去年同期為 0.85 美元。我想再次指出，所有期間的所有流通股都已進行追溯調整，以反映 2022 年 8 月 5 日生效的 3 股拆股。

Stuart, I'll now turn the call over to you.

斯圖爾特，我現在把電話轉給你。

Thank you, Doug. Going forward -- currently -- in the current quarter we remain profitable, but crush spreads are still challenging, which our CEO, Zafar Rizvi, will discuss in his segment. We've made significant progress in carbon capture, which again will be discussed by Zafar Rizvi in his segment.

謝謝你，道格。展望未來 - 目前 - 在本季度我們仍然盈利，但壓榨價差仍然具有挑戰性，我們的首席執行官 Zafar Rizvi 將在他的部門討論這一問題。我們在碳捕獲方面取得了重大進展，Zafar Rizvi 將在他的部分再次討論這一點。

In terms of our cash, we have approximately $290 million in cash. Very little or no debt. We continue to look for investments in ethanol companies, although nothing is imminent. We're also making major investments in carbon capture, which will be discussed later in the call.

就我們的現金而言，我們有大約 2.9 億美元的現金。很少或沒有債務。我們繼續尋找對乙醇公司的投資，儘管一切都不會迫在眉睫。我們還在碳捕獲方面進行了大量投資，這將在電話會議的稍後部分進行討論。

We also now can earn meaningful interest on our cash, and with $290 million, we expect our interest income to go up during the current quarter and during the following quarters. We buy back stock on dips. We bought back approximately 250,000 shares in the quarter. We have Board authorization for another 875,000 shares.

我們現在也可以從我們的現金中賺取可觀的利息，我們預計我們的利息收入將在本季度和接下來的幾個季度增加 2.9 億美元。我們逢低迴購股票。我們在本季度回購了大約 250,000 股股票。我們獲得了另外 875,000 股的董事會授權。

Zafar Rizvi will now discuss our ethanol and carbon capture operation. Thank you.

Zafar Rizvi 現在將討論我們的乙醇和碳捕獲業務。謝謝。

Thanks, Stuart. Good morning, everyone. As I mentioned in our previous quarterly calls, challenging logistic problems caused by issues with the railroad and availability of corn, that was slowdown in our production. The availability of corn in South Dakota due to draught last year and again this year resulted in a decrease in corn yield, which led to an increase in the price of corn greater than the ethanol price. On top of that, the high price of natural gas is also negatively affecting the profit margin in the ethanol industries.

謝謝，斯圖爾特。大家，早安。正如我在之前的季度電話會議中提到的那樣，由於鐵路和玉米供應問題導致的具有挑戰性的物流問題導致我們的生產放緩。南達科他州的玉米供應因去年和今年的徵兵而導致玉米產量下降，導致玉米價格漲幅高於乙醇價格。最重要的是，天然氣的高價格也對乙醇行業的利潤率產生了負面影響。

As Doug mentioned earlier, that USDA November corn report shows the corn yield dropped 26% in Nebraska and 10% in South Dakota. Nebraska about 2.9 million bushels were dropped and in South Dakota, 78 million bushels were dropped compared to last year. In South Dakota, where our NuGen plant is located, and while -- but it increased 13% in Illinois, while our -- where our One Earth Energy plant is located. Sorry for that.

正如道格之前提到的，美國農業部 11 月份的玉米報告顯示，內布拉斯加州的玉米產量下降了 26%，南達科他州下降了 10%。與去年相比，內布拉斯加州減產約 290 萬蒲式耳，南達科他州減產 7800 萬蒲式耳。在我們的 NuGen 工廠所在的南達科他州，同時 - 但它在伊利諾伊州增加了 13%，而我們 - 我們的 One Earth Energy 工廠所在的地方。對不起。

The USDA also reported corn production increase in Illinois, North Dakota and [Minneapolis], and production dropped in all other corn-producing states. The worst affected states are nearly all Western states: Nebraska, Kansas, South Dakota and Texas. The November USDA report shows an expected output of 13.93 billion bushels the 2022-'23 crop year compared to approximately 15 billion bushels in the '21-'22 crop year, a decrease of 8%.

美國農業部還報告說，伊利諾伊州、北達科他州和 [明尼阿波利斯] 的玉米產量增加，而所有其他玉米生產州的產量都下降了。受影響最嚴重的州幾乎是所有西部州：內布拉斯加州、堪薩斯州、南達科他州和德克薩斯州。美國農業部 11 月的報告顯示，2022-23 作物年度的預期產量為 139.3 億蒲式耳，而 21-22 作物年度的產量約為 150 億蒲式耳，下降了 8%。

On the bright side, ethanol and DDG export have increased compared to last year through September 2022 at the -- and the nonfood corn oil price continue to increase, and it is expected to increase even more. Ethanol exports of September '22 -- 2022 totaled 1.12 billion gallons compared to 873 million gallons for the same period last year, a 27% increase.

從好的方面來看，截至 2022 年 9 月，乙醇和 DDG 的出口量與去年同期相比有所增加，非食用玉米油價格繼續上漲，預計漲幅更大。 2022 年 9 月的乙醇出口總量為 11.2 億加侖，而去年同期為 8.73 億加侖，增長 27%。

Despite all these issues and difficulties as long as we continue to source corn at a reasonable price and railroad efficiency and logistic improves at this early -- very early stage, as Stuart mentioned, we expect that the fourth quarter could be profitable.

儘管存在所有這些問題和困難，只要我們繼續以合理的價格採購玉米，並且鐵路效率和物流在這個早期 - 非常早的階段有所改善，正如斯圖爾特提到的那樣，我們預計第四季度可以盈利。

Let me now share the progress of our carbon sequestration project. These are the bullet points. The first test well at One Earth Energy was successfully drilled in total depth of around 7,100 feet. The 3D seismic testing and water movement tests are completed, and we are very pleased with the results. Several other tests and modeling were performed to verify maximum injection pressure, reservoir quality, rock core analysis, expected movement of the CO2 plume. The test results show that location is a very good target for carbon sequestration.

現在讓我分享一下我們碳封存項目的進展。這些是要點。 One Earth Energy 的第一口試驗井成功鑽探，總深度約為 7,100 英尺。 3D抗震測試和水流測試已經完成，我們對結果非常滿意。還進行了其他幾項測試和建模，以驗證最大注入壓力、儲層質量、岩心分析以及 CO2 羽流的預期運動。測試結果表明，該位置是一個非常好的碳封存目標。

The design of the compressor facility is complete. The contract to build the compressor part of the facility have been signed, and long lead time equipment has been ordered. The pipeline to injection well operator identification number has been received. The work on pipeline FEED study is expected to be finished by January 2023.

壓縮機設施的設計已經完成。建造該設施壓縮機部分的合同已經簽署，並且已經訂購了長周期設備。已收到通往注入井運營商標識號的管道。管道FEED研究工作預計將於2023年1月完成。

The Class VI permit for 3 injection wells with a capacity to store 90 million tons of carbon have been completed and submitted. We continue to complete several other documents required by different government agencies, but most documents that require a lead time are completed or expected to be completed very soon.

3口9000萬噸儲碳注水井完成並報送VI類許可證。我們繼續完成不同政府機構要求的其他幾份文件，但大多數需要提前期的文件已經完成或預計將很快完成。

Once again, this is a highly technical and time-consuming project. It has required considerable time to make progress, but we are pleased that we have started -- what we started 4 years ago now has achieved some big milestone. As I also mentioned in our previous call, we are also evaluating several other projects that would increase production, efficiency and energy saving as well as reduced water consumption at our plants. We believe the completion of some of these projects will lead to a greater benefit under the Inflation Reduction Act passed by Congress.

再次強調，這是一個技術含量高且耗時的項目。它需要相當長的時間才能取得進展，但我們很高興我們已經開始——我們 4 年前開始的工作現在已經實現了一些重要的里程碑。正如我在之前的電話會議中提到的那樣，我們還在評估其他幾個項目，這些項目將提高我們工廠的產量、效率和節能，並減少用水量。我們相信，其中一些項目的完成將根據國會通過的通貨膨脹減少法案帶來更大的利益。

The Section 45Q cash payment for the carbon sequestration increased to $85 per metric ton from $50 per metric ton. The clean fuel production credit Section 45Z, which is related to the reduced carbon intensity score, could provide a much better return than 45Q.

第 45Q 節碳封存的現金支付從每公噸 50 美元增加到每公噸 85 美元。與降低的碳強度得分相關的清潔燃料生產信用部分 45Z 可以提供比 45Q 更好的回報。

In summary, we are very pleased to announce once again a profitable quarter in a very, very difficult environment as well as very good progress with our carbon sequestration projects. Hitting these carbon sequestration milestone and achieving a ninth consecutive quarter of positive income cannot be accomplished without the hard work and dedication of our colleagues. We are very appreciative of their efforts on achieving these positive results.

總而言之，我們非常高興地宣佈在非常非常困難的環境中再次實現盈利的季度，以及我們的碳封存項目取得的良好進展。如果沒有我們同事的辛勤工作和奉獻精神，就無法達到這些碳封存里程碑並實現連續第九個季度的正收入。我們非常感謝他們為取得這些積極成果所做的努力。

I will give back the floor to Stuart Rose for additional comments.

我將把發言權交還給 Stuart Rose 以徵求更多意見。

Thank you, Zafar. In conclusion, the ethanol business remains steady, and we believe our potential carbon capture business has been helped significantly by government legislation, along with great progress by Zafar Rizvi and his team.

謝謝你，紮法爾。總之，乙醇業務保持穩定，我們相信政府立法以及 Zafar Rizvi 及其團隊取得的巨大進步極大地幫助了我們潛在的碳捕獲業務。

We continue to consider -- we continue to believe that we have the best plants among the best plants in the industry. Our locations are good, especially the one that is right in the middle of what we consider the best carbon capture area of the country. But more importantly, we truly believe, as Zafar said, we have among the best employees in the industry.

我們繼續考慮 - 我們繼續相信我們擁有業內最好的工廠中最好的工廠。我們的位置很好，尤其是位於我們認為該國最好的碳捕獲區中間的位置。但更重要的是，正如 Zafar 所說，我們堅信我們擁有業內最優秀的員工。

Most companies in the industry were -- many, many companies were not profitable. We had a profitable quarter, and we continue to consider our employees to be among the -- we consider that the real reason why we're doing better than most is we consider our employees to be the best. And that I think separates us in ethanol, and I think you'll see, and we hope that it will continue and will separate us in carbon capture.

該行業的大多數公司——很多很多公司都沒有盈利。我們有一個盈利的季度，我們繼續認為我們的員工是其中的一員——我們認為我們比大多數人做得更好的真正原因是我們認為我們的員工是最好的。而且我認為我們在乙醇中分離，我想你會看到，我們希望它會繼續並將我們在碳捕獲中分離。

I'll now leave the podium open to questions.

我現在將離開講台接受提問。

(Operator Instructions) Our first question comes from Jordan Levy with Truist Securities.

（操作員說明）我們的第一個問題來自 Truist Securities 的 Jordan Levy。

Really nice execution again this quarter. Maybe I'll start out, you're clearly making good progress on the CCS side. If I think about that project moving forward along with the clean fuel credit and the IRA that starts, I think, in 2025. Maybe could you just help us think about how those 2 items might play together as we get into some of the out years, assuming CCS progresses and what that means for the business?

本季度再次執行得非常好。也許我會開始，你顯然在 CCS 方面取得了良好的進展。如果我考慮在 2025 年開始的清潔燃料信貸和 IRA 一起推進該項目。也許你能幫我們想想這兩個項目如何在我們進入未來幾年時一起發揮作用，假設 CCS 取得進展，這對企業意味著什麼？

Zafar?

紮法爾？

Yes. Jordan, with 45Z and 45Q, 45Q is a direct payment up to $85 per ton, and 45Z is a tax credit, which you received if you reduce the carbon intensity, which is the line right now, if you -- most ethanol plants have approximately 70 CI score, what we call is carbon intensity [plan].

是的。約旦，有 45Z 和 45Q，45Q 是每噸最高 85 美元的直接付款，而 45Z 是稅收抵免，如果你降低碳強度，這是現在的線，如果你 - 大多數乙醇工廠有大約 70 CI 分數，我們稱之為碳強度[計劃]。

And then there is a line which is 50 -- if you reduce anything below the 50, you get some per gallon basis tax credit on each gallon you produce. So there is a formula to look at it, carbon -- we are not a -- just want to make sure we are not tax expert, but this is what I understand.

然後有一條線是 50——如果你減少低於 50 的任何東西，你生產的每一加侖都會得到一些每加侖的稅收抵免。所以有一個公式來看待它，碳——我們不是——只是想確保我們不是稅務專家，但這是我的理解。

So the carbon -- when they do the carbon sequestration, you reduce approximately 30 points for CI score. And then there is about 18 points is for the land use that also reduce because we are -- whatever land use will happen, we further reduce that 18 points. So if you started 170 and then you reduce by almost 48 points, and then you can reduce your further CI score. If you are able to achieve a 0, which is not that difficult, not that easy, but there also have to be made lot of changes in the process and other things, which has to be accomplished.

所以碳——當他們進行碳封存時，你的 CI 分數降低了大約 30 分。然後還有大約 18 分是關於土地使用的，因為我們是——無論土地使用會發生什麼，我們都會進一步減少這 18 分。所以如果你開始 170，然後你減少了將近 48 分，然後你可以進一步降低你的 CI 分數。如果你能做到0，那不是那麼難，也不是那麼容易，但是在流程等方面也需要做很多改變，這是必須要完成的。

As I mentioned, we were working on a lot of these things previously from the last couple of years to reduce our further CI score. So we are already working on that thing. If we -- for example, if we are able to achieve 0, but I'm not saying that we will be or we will not be, then it's almost equal to $1 a gallon of your ethanol production. So if we are producing 150 million gallon and we reduce CI score to 0, we can have almost per gallon basis $1 a gallon that may be in one location, can be as much as $150 million. But we are not expert, but that's what we understand at this time.

正如我所提到的，過去幾年我們一直在做很多這樣的事情，以進一步降低我們的 CI 分數。所以我們已經在做這件事了。如果我們 - 例如，如果我們能夠實現 0，但我並不是說我們會或不會，那麼它幾乎等於每加侖乙醇產量 1 美元。因此，如果我們生產 1.5 億加侖並且我們將 CI 分數降低到 0，我們幾乎可以每加侖計算 1 美元，每加侖可能在一個位置，可能高達 1.5 億美元。但我們不是專家，但這就是我們目前的理解。

And I'm certainly no tax expert either, but that's a great explanation. Maybe just to clarify, did you -- on the land use side of that, did you mention that you're working on something to get that 18-point reduction? Or is that just (inaudible) relation of it?

我當然也不是稅務專家，但這是一個很好的解釋。也許只是為了澄清，你是否 - 在土地使用方面，你是否提到你正在努力實現 18 分的減少？還是只是（聽不清）它的關係？

No. When we have accomplished the carbon sequestration, because if we take the carbon all and put it in the ground, under that formula we get approximately 30 points for the carbon sequestration we did, an 18 point, which is now -- ethanol has been used. They've used always that when they compare their -- our CI score, they always add 18 points for the land use. So that land use will be automatically will also get a reduction with the carbon sequestration. So that's where it adds up. That's what I understand. .

不，當我們完成碳封存後，因為如果我們把所有的碳都放在地下，根據這個公式，我們所做的碳封存大約可以得到 30 分，即 18 分，也就是現在——乙醇已經被使用過。當他們比較他們的——我們的 CI 分數時，他們總是使用，他們總是為土地使用增加 18 分。因此，土地使用將自動隨著碳封存而減少。所以這就是它加起來的地方。這就是我的理解。 .

So you're basically -- you're getting nearly a 50-point reduction just on the carbon capture?

所以你基本上 - 僅在碳捕獲方面就減少了近 50 個百分點？

Yes...

是的...

None of these numbers that Zafar is saying include what we potentially the higher selling price of zero carbon or low carbon ethanol, which -- it's another -- we're not -- we don't want anyone to put that in their numbers, but that's a real possibility also. .

Zafar 所說的這些數字都不包括我們潛在的零碳或低碳乙醇的更高售價，這是另一個 - 我們不希望任何人將其放入他們的數字中，但這也是一種真實的可能性。 .

Exactly. So as I said, Jordan, generally, there is a 70 -- normally, 70 to 72 generally ethanol plants have CI score, which they call it. So if you take it 30 point reduction for the carbon sequestration and 18 point reduction for the land, that's 48, so to 70 minus 48. So you can see that it's come approximately 22. So the line started with the 50 that you have to have minimum 50 and then go down. So that's where the comparison is done. So it is there a formal which we understand that it will be used.

確切地。所以正如我所說，喬丹，一般來說，有 70 - 通常，乙醇工廠通常有 70 到 72 分，他們稱之為 CI 分數。所以如果你把碳封存減少 30 點，土地減少 18 點，那就是 48，所以 70 減去 48。所以你可以看到它大約是 22。所以這條線從 50 開始，你必須至少有 50，然後下降。這就是比較完成的地方。所以我們知道它會被使用。

Got it. Got it. That's helpful. Next, there's been some headlines on RVOs coming out in the next day or whatever. Just curious your thoughts if we assume mandates for ethanol are roughly held flat over the next 3 years or so.

知道了。知道了。這很有幫助。接下來，有一些關於 RVO 的頭條新聞在第二天或其他什麼時候出現。如果我們假設未來 3 年左右對乙醇的強制要求大致持平，您的想法會很好奇。

I think we are -- as we are hearing, it's approximately is still going to be staying 15 billion for ethanol, which -- they may increase the overall to 21 billion, but we understand that it's probably going to stay 15 billion for the ethanol, but we're not sure up until it's released.

我認為我們 - 正如我們所聽到的那樣，乙醇大約仍將保持 150 億，這 - 他們可能會將總數增加到 210 億，但我們知道乙醇可能會保持 150 億，但在它發布之前我們不確定。

One thing that would be important, and we don't know -- so far the Biden administration has held firm is no waivers. They have the ability to give waivers wherever they feel like giving them and they have in the -- administrations have in the past. And Biden has been pretty good at very little or no waivers. So if it's no waivers, it's actually a decent increase.

有一件事很重要，但我們不知道——到目前為止，拜登政府一直堅持不放棄。他們有能力在任何他們想給予豁免的地方給予豁免，而且他們在 - 政府過去已經這樣做了。拜登在極少或根本沒有豁免方面做得很好。因此，如果沒有豁免，這實際上是一個不錯的增長。

Yes. And hopefully, this export continues to increase. As I said, this year, we can see that we are way ahead compared to last year. And if exports continue to increase, that will also help us.

是的。希望這種出口繼續增加。正如我所說，今年，我們可以看到與去年相比我們遙遙領先。如果出口繼續增加，那也將對我們有所幫助。

Got it. That's helpful. Lastly, jumping around a bit here, but just to go back to CCS. Zafar, maybe can you just -- you went over it in your prepared remarks, but just so we have it separated out. Can you just talk to kind of the next steps as we move into early next year? I know you mentioned that you've -- most of the long-term items you've been working on in the detailed plans, but maybe just break out what we should be looking for as you move into 1Q, 2Q next year.

知道了。這很有幫助。最後，在這裡跳來跳去，但只是為了回到 CCS。 Zafar，也許你可以——你在準備好的發言中復述了它，但只是為了讓我們把它分開。當我們進入明年初時，你能談談接下來的步驟嗎？我知道你提到過你已經 - 你在詳細計劃中一直致力於的大部分長期項目，但也許只是在你進入明年第一季度，第二季度時打破我們應該尋找的東西。

Yes, Jordan, as I have mentioned, there's a lot of still work to do because there's a lot of government agencies' permits we are still in process of applying. Those permits doesn't take that long compared to Class VI permit, that would take from 6 months to 18 months, but other permits, which is required by the Illinois, it's required by the federal government and other things, so we are working on those progress.

是的，喬丹，正如我提到的，還有很多工作要做，因為我們仍在申請許多政府機構的許可。與需要 6 個月到 18 個月的 VI 類許可證相比，這些許可證不需要那麼長時間，但伊利諾伊州要求的其他許可證、聯邦政府和其他方面要求的許可證，所以我們正在努力那些進步。

And then we are -- we cannot start injection well, start even digging the injection well up till the time we received EPA permit. So we are in the process of looking at to starting the bid, already to be prepared for as soon as we receive permit from EPA, we should be prepared to start injection well.

然後我們 - 我們無法很好地開始注入，甚至無法開始挖掘注入井，直到我們獲得 EPA 許可。所以我們正在考慮開始投標，已經準備好一旦我們收到 EPA 的許可，我們應該準備好開始注入。

So there's going to be -- a lot of work will be happening in next year. But our goal is, hopefully, but this certainly, as Doug said forward-looking statement, that we complete this project by the end of '24. But this could take longer, but that's what we are trying to achieve.

所以明年將會有很多工作要做。但我們的目標是，有希望地，但正如道格在前瞻性聲明中所說的那樣，這肯定是我們在 24 年底前完成這個項目。但這可能需要更長的時間，但這正是我們正在努力實現的目標。

Got you. And just because you filed for 3 permits, I would assume that you're thinking about some third-party volumes there, too?

明白了僅僅因為您申請了 3 個許可，我就假設您也在考慮那裡的一些第三方卷？

I think at this stage -- at that stage, probably that's what we're thinking because we do not have enough capacity for our ethanol facility. But we know there is a lot of demand for the well is going to be in the future. And so we just wanted to make sure there's going to be 2 extra well will be available. We don't have to start digging them right away as we -- they will be started as needed basis, but we will have already a permit for the EPA to achieve those. So that if we wanted to start it, we can start it any time.

我認為在這個階段 - 在那個階段，可能這就是我們的想法，因為我們沒有足夠的能力來建造我們的乙醇設施。但我們知道，未來對這口井的需求量很大。所以我們只是想確保會有 2 個額外的井可用。我們不必立即開始挖掘它們，因為我們將根據需要開始挖掘它們，但我們已經獲得 EPA 的許可來實現這些目標。這樣，如果我們想啟動它，我們可以隨時啟動它。

Our next question comes from Chris Sakai with Singular Research.

我們的下一個問題來自奇異研究公司的 Chris Sakai。

Can you talk more about, is REX experiencing any logistical challenges with rail?

你能多談談嗎，REX 是否在鐵路方面遇到任何後勤挑戰？

I think the main concern which we have is, as you can see, the recently going on there is strike, and you can hear it from the strike and all around that during the 2019, '20, '21, and the railroad laid off a lot of people and then certainly these drivers and all those things, demand increased, but there is not enough manpower. We see sometimes that power is already there, or power made it to the plants to pull, but there's no driver.

我認為我們主要擔心的是，如您所見，最近發生了罷工，您可以從罷工以及 2019 年、20 年、21 年期間的所有事件以及鐵路停工中聽到很多人，然後肯定是這些司機和所有那些東西，需求增加了，但人手不夠。我們有時會看到動力已經存在，或者動力已經到達植物，但沒有驅動力。

And they are supposed to pull it on [fair] on Monday, they are not there up to Saturday, Sunday. So as these things delayed further to pick up those railcars, other containers are not available sometime, and that delay cause our -- there's limited storage, although we have increased a lot of our storage compared to other ethanol facilities.

他們應該在周一 [公平] 上拉它，他們要到週六、週日才到。因此，隨著這些東西進一步延遲以接收那些軌道車，其他容器有時無法使用，這種延遲導致我們的 - 存儲空間有限，儘管與其他乙醇設施相比我們增加了很多存儲空間。

But there is a point reach which you have, your tanks are completely full, then you have to slow down the project or your storages are all full. You can't really overflow the ethanol from the tanks and then you have to slow down and wait for the rail cars to come back before you load it again. So that certainly caused the problem of production. That certainly has caused the problem of shipment. And unfortunately, that's the consistent continued problem at this stage.

但是你有一個到達點，你的油箱已經完全滿了，然後你必須放慢項目的速度，否則你的儲藏室就滿了。你不能真的從罐中溢出乙醇，然後你必須減速並等待軌道車回來，然後再裝載它。所以這肯定會導致生產問題。這肯定導致了裝運問題。不幸的是，這是現階段持續存在的問題。

Okay. And as we head into winter, can you comment on how an increase in the price of natural gas will affect profitability?

好的。隨著我們進入冬季，您能否評論一下天然氣價格上漲將如何影響盈利能力？

Yes. I think actually, that's really we are already analyzing it. So generally, we try to make sure that we have at least enough natural gas before we get into that plant. But you can see it's -- NYMEX is trading today, the $6.93. And last month, it was $6.35. And last year, it was $5.42. So there's $1.50 is change, and this change since that happened. And it's consistently continuously, we see the natural gas is -- although there is enough natural gas in this country, I think that basically reaction is due to the European situation, or Ukraine war again. Since that happened, that's the time this natural gas prices start going up.

是的。我認為實際上，我們已經在分析它了。所以一般來說，在我們進入該工廠之前，我們會盡量確保我們至少有足夠的天然氣。但你可以看到——NYMEX 今天的交易價格為 6.93 美元。上個月是 6.35 美元。去年是 5.42 美元。所以有 1.50 美元的零錢，自那以後發生了這種變化。而且它一直持續不斷，我們看到天然氣是 - 儘管這個國家有足夠的天然氣，但我認為基本上反應是由於歐洲局勢或再次烏克蘭戰爭。從那以後，天然氣價格就開始上漲了。

And that makes really major impact. If we look at it actually in calendar year, it was about $2.08 average and 2021, it was $3.84 average. And now for this calendar years so far is a $6.64 average. So this -- and we don't know what will happen 2023. But that certainly is affecting the bottom line. As Doug mentioned, there's a 56% increase. So that takes away your 56% of the portion of the profit.

這確實產生了重大影響。如果我們按日曆年實際來看，平均價格約為 2.08 美元，2021 年平均價格為 3.84 美元。現在到目前為止，這個日曆年的平均價格為 6.64 美元。所以這 - 我們不知道 2023 年會發生什麼。但這肯定會影響底線。正如道格所提到的，增長了 56%。因此，這會帶走您 56% 的利潤部分。

Our next question comes from Pavel Molchanov with Raymond James.

我們的下一個問題來自 Pavel Molchanov 和 Raymond James。

You provided some useful perspective on natural gas. Let me zoom in on corn. When we look at the futures curve, I mean it basically points to $5 to $6 a bushel practically forever. And we went through a decade pre-COVID with $3, $4. So is $6 corn in your view going to be the new normal now on a permanent basis?

你提供了一些關於天然氣的有用觀點。讓我放大玉米。當我們看期貨曲線時，我的意思是它基本上永遠指向每蒲式耳 5 到 6 美元。我們以 3 美元、4 美元的價格經歷了 COVID 之前的十年。那麼，您認為 6 美元的玉米現在會成為永久性的新常態嗎？

I think it seems to me at this stage, at least the area where we have, CBOT probably going to continue to trade at that level. But the -- Pavel, the major problem is that area is where you have drought, which I mentioned earlier in my prepared remarks, those areas like South Dakota, Nebraska and Kansas and Texas. Texas is already the deficit corn area. But these area is certainly due to the drought. The basis are very high.

我認為在我看來，在這個階段，至少在我們擁有的區域，CBOT 可能會繼續在那個水平上交易。但是 - 帕維爾，主要問題是該地區發生乾旱，我在之前準備好的發言中提到過，南達科他州、內布拉斯加州、堪薩斯州和得克薩斯州等地區。得克薩斯州已經是玉米短缺地區。但這些地區肯定是因為乾旱。基礎非常高。

You can find somewhere bases are $0.50, $0.60 or $0.80, even though we have seen $1.20 basis for the corn base. And if the corn is going to leave some area like say, North Dakota this year has a bumper crop, last year, they didn't have that great. Minneapolis has a great crop, that area. And Illinois has great corp. So when you are shipping this corn from one area to other area by rail, the rail costs about somewhere depending on the destination.

你會發現某個地方的基價為 0.50 美元、0.60 美元或 0.80 美元，儘管我們已經看到玉米基價為 1.20 美元。如果玉米要離開某個地區，比如今年北達科他州的豐收，去年，他們就沒有那麼好。明尼阿波利斯那個地區的收成很好。伊利諾伊州有很棒的公司。因此，當您通過鐵路將這種玉米從一個地區運送到另一個地區時，鐵路成本取決於目的地。

But if you look at -- if you send it from North Dakota to Texas, it's about $1.60 to just to ship a bushel. And on top of that, they're going to be a $0.60, $.70 or maybe $0.80 on basis. So if you are delivering $1.60 plus paying $0.80 basis, so $2.40 to deliver corn in those taxes, Nebraska and other area, which is further away, is going to be very difficult for some of these ethanol facilities to continue to produce at that corn level price.

但是如果你看一下——如果你把它從北達科他州送到德克薩斯州，僅僅運送一蒲式耳大約需要 1.60 美元。最重要的是，它們將是 0.60 美元、0.70 美元或 0.80 美元。因此，如果您交付 1.60 美元加上支付 0.80 美元的基礎，那麼 2.40 美元交付這些稅收的玉米，內布拉斯加州和其他更遠的地區，對於這些乙醇設施中的一些來說，繼續以該玉米水平生產將非常困難價格。

Okay. Let me turn to a regulatory topic. It seems like it's forever, we've been talking about E15 on a year-round basis, and I know there is a new bill from Senator Fischer in Nebraska to put legislative authorization on that without going through the EPA waivers. You anticipate that bill has a good chance of passing? What do you think?

好的。讓我轉向一個監管話題。它似乎是永遠的，我們全年都在談論 E15，而且我知道內布拉斯加州的參議員 Fischer 提出了一項新法案，無需通過 EPA 豁免就可以對其進行立法授權。您預計該法案很有可能獲得通過？你怎麼認為？

I believe this time looks to be -- is a good chance of surpassing because the most -- all the players are agreed, seems like agreed, I should say. It seems like they agreed that E15 will not be a bad idea. So if that pass, I think that will be great help because if the pumps continue to supply 12 months in a year, then people will convert that. Because I have seen some several pumps in actually in Illinois, Nebraska and other area, what they call is E88, they are selling.

我相信這次看起來 - 是一個很好的超越機會，因為大多數 - 所有球員都同意，似乎同意，我應該說。似乎他們同意 E15 不會是一個壞主意。因此，如果通過，我認為這將有很大幫助，因為如果水泵在一年中繼續供應 12 個月，那麼人們就會轉換它。因為我在伊利諾伊州，內布拉斯加州和其他地區看到了一些泵，他們稱之為E88，他們正在銷售。

And you can see the price difference almost $0.15 to $0.20 sometime difference than regular price. So people are using that. So I think if these pumps can produce -- sell regular basis 12 months, I think this will catch up more and more, and that will be very -- certainly will increase another 5% ethanol demand.

你可以看到價格差異幾乎是 0.15 美元到 0.20 美元，有時與正常價格不同。所以人們正在使用它。所以我認為，如果這些泵能夠生產 - 定期銷售 12 個月，我認為這會越來越多，而且非常 - 肯定會再增加 5% 的乙醇需求。

Okay. And then lastly, you mentioned exports and obviously, kind of varies from quarter-to-quarter. But your general impression on the export window to China, where do things stand on that?

好的。最後，你提到了出口，顯然每個季度都有所不同。但您對中國出口窗口的總體印像是什麼？

I think if you look at it, really, we do not see much export to China this year. Mostly -- I think we can see that mostly, it was -- Canada was the highest we produced. Canada, South Korea, Netherlands, India and the U.K., and I think India certainly is moving also rapidly to meet their own demand locally in India, and they are pushing very hard. And certainly, Brazil was not a major player this year so far. But we have seen certainly Canada and South Korea and Netherlands step up. And -- but we have not seen any major shipment to China this year.

我想如果你看一下，真的，今年我們對中國的出口並不多。大多數情況下——我想我們可以看到，主要是——加拿大是我們生產的最高的。加拿大、韓國、荷蘭、印度和英國，我認為印度當然也在迅速行動以滿足他們在印度當地的需求，而且他們正在非常努力地推動。當然，巴西今年到目前為止還不是主要參與者。但我們肯定看到加拿大、韓國和荷蘭站出來了。而且 - 但我們今年沒有看到任何大宗貨物運往中國。

Right. Okay. That's consistent with what we're seeing.

正確的。好的。這與我們所看到的一致。

Mr. Rose, there are no further questions at this time. Please continue with your presentation or closing remarks.

羅斯先生，現在沒有其他問題了。請繼續您的演講或結束語。

Okay. Well I'd like to thank everyone for listening, and we look forward to talking to you at the end of next quarter. Thank you very much. .

好的。好吧，我要感謝大家的聆聽，我們期待在下個季度末與您交談。非常感謝。 .

Thank you.

謝謝。

That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your line. Have a great day, everyone.

這確實結束了今天的電話會議。我們感謝您的參與並請您斷開您的線路。祝大家有個美好的一天。