REX American Resources Corp (REX) 2023 Q1 法說會逐字稿

Greetings, and thank you for standing by. Welcome to the REX American Resources Fiscal 2023 First Quarter Conference Call. Now I'd like to turn the conference over to Doug Bruggeman, Chief Financial Officer. Please go ahead.

問候，感謝您的支持。歡迎參加 REX American Resources 2023 財年第一季度電話會議。現在我想將會議轉交給首席財務官 Doug Bruggeman。請繼續。

Good morning, and thank you for joining REX American Resources Fiscal 2023 First 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，感謝您參加 REX American Resources 2023 財年第一季度電話會議。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向美國證券交易委員會提交的文件中有所描述，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.

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。

Sales for the first quarter increased by 9.5% as we experienced higher volume for ethanol, dried distiller grains and corn oil. Ethanol sales for the quarter were based upon 71.5 million gallons this year versus 64.5 million last year. Higher volumes were partially offset by lower ethanol selling prices as the price per gallon went from $2.28 to $2.21.

由於乙醇、乾酒糟和玉米油的銷量增加，第一季度的銷售額增長了 9.5%。本季度的乙醇銷售額基於今年的 7150 萬加侖，而去年為 6450 萬加侖。隨著每加侖價格從 2.28 美元上漲至 2.21 美元，乙醇銷售價格的下降部分抵消了銷量的增加。

We reported gross profit of $15 million this year versus a gross profit of $11.9 million in the prior year. Meanwhile, the SG&A increased from the first quarter -- increased for the first quarter from $5.2 million to $10.6 million. There was a trade-off between these 2 line items between the years as we currently classify freight cost we pay to an outside vendor as SG&A expense. We incurred charges of $5.1 million for that this year. In the prior year, more contracts called for the buyer to pay these fees and it was netted out of the ethanol price.

我們報告今年的毛利潤為 1500 萬美元，而去年的毛利潤為 1190 萬美元。與此同時，SG&A 從第一季度開始增加——第一季度從 520 萬美元增加到 1060 萬美元。由於我們目前將支付給外部供應商的運費分類為 SG&A 費用，因此這些年之間這兩個項目之間存在權衡。我們今年為此支付了 510 萬美元的費用。在前一年，更多的合同要求買方支付這些費用，並且從乙醇價格中扣除。

We had income of $1.5 million from our unconsolidated equity investment in this year's first quarter versus $2 million in the prior year. We reported interest and other income of $2.8 million versus $174,000 in the prior year as we benefited from higher interest rates on our cash and short-term investments. We reported a tax provision of $2 million this year versus a provision of $1.8 million in the prior year. This led to net income attributable to REX shareholders of $5.2 million for both this year and the prior year first quarter. Net income per share attributable to REX shareholders was $0.30 for this year versus $0.29 in the prior year.

今年第一季度，我們的未合併股權投資收入為 150 萬美元，而去年同期為 200 萬美元。我們報告的利息和其他收入為 280 萬美元，而上一年為 174,000 美元，因為我們受益於現金和短期投資的更高利率。我們報告今年的稅收撥備為 200 萬美元，而去年為 180 萬美元。這導致今年和去年第一季度歸屬於 REX 股東的淨收入為 520 萬美元。今年歸屬於 REX 股東的每股淨收益為 0.30 美元，而去年為 0.29 美元。

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, business improved at the end of the quarter and continues to improve. Currently, we're running at a rate of earnings per share that is higher than the first quarter, and we hope that trend continues. It's been great improvement over the beginning of the first quarter.

謝謝你，道格。展望未來，業務在本季度末有所改善，並將繼續改善。目前，我們的每股收益高於第一季度，我們希望這種趨勢繼續下去。與第一季度初相比，這是一個很大的進步。

We have $270 million in consolidated cash and short-term investments. Our plans with that cash -- first of all, our cash -- our cash flow is -- although we report a tax rate higher -- we actually report a tax rate higher than what we paid due to tax credits that we have carried forward, so our cash flow continues to improve both by earnings and by a lower rate than the stated rate on the GAAP earnings per share. In terms of going forward, as Doug mentioned, we're benefiting right now from higher interest rates. We have the $270 million earning significantly more than previously as you can see in the first quarter.

我們有 2.7 億美元的綜合現金和短期投資。我們用這些現金的計劃——首先，我們的現金——我們的現金流是——儘管我們報告的稅率更高——我們實際上報告的稅率高於我們支付的稅率，因為我們結轉了稅收抵免，因此我們的現金流繼續通過收益和低於 GAAP 每股收益規定的比率來改善。就未來而言，正如道格所提到的，我們現在正受益於更高的利率。正如您在第一季度看到的那樣，我們的 2.7 億美元收入明顯高於之前。

We're also working hard, which Zafar will talk about on carbon capture both at One Earth plant and what he has signed up or what our company has signed up with Summit. There's no guarantees, but we are moving forward on this and have great hopes that it will be a great contributor to our company in the future.

我們也在努力工作，Zafar 將談論 One Earth 工廠的碳捕獲以及他已簽署的協議或我們公司已與 Summit 簽署的協議。沒有任何保證，但我們正在朝著這個方向前進，並非常希望它能在未來為我們公司做出巨大貢獻。

We also continue to have our buyback plan in place. We use this on dips, and it's been something that's helped stabilize the stock a little bit, I believe, when the stock is dropped. The last thing, we continue to look for opportunities, not just in ethanol, but in carbon capture. And we have nothing other than what Zafar is going to talk about going on right now, but there could be -- and there's always a chance that something will come along, and we do have the cash right now to take advantage of it, which we would see.

我們還繼續制定回購計劃。我們在逢低使用它，我相信，當股票下跌時，它有助於穩定股票。最後一件事，我們繼續尋找機會，不僅是在乙醇方面，而且在碳捕獲方面。除了 Zafar 現在要談論的事情之外，我們別無他法，但可能 - 而且總會有機會出現一些東西，我們現在確實有現金來利用它，這我們會看到。

I'll now turn the call over to Zafar Rizvi, our Chief Executive Officer.

我現在將電話轉給我們的首席執行官 Zafar Rizvi。

Thank you, Stuart. Good morning, everyone. As I mentioned in our previous call at the early stage of the quarter, we were facing challenging operating environment. But later in the quarter, we saw improvements, which resulted in a profitable first quarter. On the other hand, drought has created a strong owned basis, particularly at the Marion, South Dakota location.

謝謝你，斯圖爾特。大家，早安。正如我在本季度初的電話會議中提到的那樣，我們面臨著充滿挑戰的運營環境。但在本季度晚些時候，我們看到了改善，這導致第一季度實現盈利。另一方面，乾旱創造了強大的自有基礎，特別是在南達科他州馬里恩地區。

We are pleased with the availability of corn in the Gibson City, Illinois area because of growth in domestic export from Illinois to own basis are beginning to [Summit]. According to EIA, May 24 report, ethanol stock and production has dropped during the last few weeks due to planned shutdowns of ethanol facilities, an increase in blending because of higher consumption of gasoline.

我們對伊利諾伊州吉布森市的玉米供應情況感到滿意，因為伊利諾伊州的國內出口開始增長到 [Summit]。根據 EIA 5 月 24 日的報告，乙醇庫存和產量在過去幾周有所下降，原因是乙醇設施計劃關閉，汽油消耗增加導致混合量增加。

We have also seen natural gas price drop considerably, which has a positive impact on the financial results. As a result, all of these factors, we continue to source corn at -- if we continue to source corn at a reasonable price and we don't face any major logistic problems, we believe we will have better financial results in the second quarter than the first quarter of 2023, as Stuart mentioned earlier.

我們還看到天然氣價格大幅下跌，這對財務業績產生了積極影響。因此，所有這些因素，我們繼續採購玉米 - 如果我們繼續以合理的價格採購玉米並且我們不面臨任何重大的物流問題，我們相信我們將在第二季度取得更好的財務業績比 2023 年第一季度，正如斯圖爾特之前提到的那樣。

The May 2023 USDA report was also very positive. It's expected to be 15.26 billion bushels and 181.5 bushel per acre, and if this happened and we will see that -- if this realized, it could have very positive impact on future earnings. But as we all know, we have a long way to go yet. Ethanol export was dropped this quarter, first quarter 2023 were 354 million gallons compared to 394 million gallons same period last year. DDG export through March 2023 were 2.4 million metric tons compared to 2.88 million metric tons, a decrease of approximately 400,000 metric tons compared to the same period of 2022.

美國農業部 2023 年 5 月的報告也非常積極。預計每英畝產量為 152.6 億蒲式耳和 181.5 蒲式耳，如果發生這種情況，我們將會看到 - 如果實現，可能會對未來收益產生非常積極的影響。但眾所周知，我們還有很長的路要走。本季度乙醇出口下降，2023 年第一季度為 3.54 億加侖，而去年同期為 3.94 億加侖。到 2023 年 3 月，DDG 出口量為 240 萬噸，而 288 萬噸與 2022 年同期相比減少了約 40 萬噸。

Let me provide you an update on carbon sequestration project and sustainability report. We are very pleased to announce our inaugural sustainability report, highlighting what we have accomplished while addressing the sustainability economy and our social responsibilities at large. We have -- we are delighted to partner with Summit Carbon Solutions, developer of the world's largest carbon pipeline for the NuGen facility in South Dakota. Our goal to reduce greenhouse gas emission perfectly aligned with Summit Carbon Solutions expertise.

讓我為您提供有關碳封存項目和可持續發展報告的最新信息。我們很高興地宣布我們的首份可持續發展報告，強調我們在解決可持續經濟和我們的社會責任方面取得的成就。我們有——我們很高興與 Summit Carbon Solutions 合作，Summit Carbon Solutions 是世界上最大的南達科他州 NuGen 設施碳管道開發商。我們減少溫室氣體排放的目標完全符合 Summit Carbon Solutions 的專業知識。

At the One Earth sequestration location in Gibson City, we continue to complete the paperwork for different government permits and requirements of agency, while we are waiting for EPA to approve Class VI permit for carbon injection. This is highly technical, very time-consuming project and it depends on several local, state and federal agencies approval. Those decisions are beyond our control, which have meant we are moving forward a bit slower than we would like to. But we are, however, pleased about the big milestone we have reached so far. We submitted the Class VI permit for 3 wells, ordered long lead equipment, expect to build a modular -- expect compression plant will be delivered by the end of 2023 with construction around the modular unit will start in 2024.

在吉布森市的 One Earth 封存地點，我們繼續完成不同政府許可和機構要求的文書工作，同時我們正在等待 EPA 批准 VI 類碳注入許可。這是一項技術性很強、非常耗時的項目，它取決於幾個地方、州和聯邦機構的批准。這些決定超出了我們的控制範圍，這意味著我們的前進速度比我們希望的要慢一些。但是，我們對迄今為止所達到的重大里程碑感到高興。我們提交了 3 口井的 VI 類許可證，訂購了長鉛設備，預計將建造一個模塊化——預計壓縮廠將在 2023 年底交付，模塊化單元的建設將於 2024 年開始。

We're also in the process, as I mentioned previously, in evaluating whether to increase the ethanol capacity of One Earth Energy in the Gibson City, Illinois to 200 million-gallon a year instead of 175 million, as I mentioned in the previous call. The current capacity is approximately 150 million gallons a year.

正如我之前提到的，我們也在評估是否將伊利諾伊州吉布森市 One Earth Energy 的乙醇產能從每年 1.75 億加侖提高到 2 億加侖，正如我在之前的電話會議中提到的那樣.目前的產能約為每年 1.5 億加侖。

The Clean Fuel Production Credit section 45Z which is related to reduce fuel carbon intensity score could provide as much as dollar a gallon depending on the carbon intensity of the ethanol produced and sold. That could continue to enhance the strong position of our company. We also continue to evaluate other projects that would improve energy efficiency and reduce carbon intensity. We believe completion of these projects will lead to a greater benefit under the Inflation Reduction Act passed by Congress.

與降低燃料碳強度得分相關的清潔燃料生產信用部分 45Z 可以提供高達每加侖美元的金額，具體取決於生產和銷售的乙醇的碳強度。這可能會繼續加強我們公司的強勢地位。我們還繼續評估其他可以提高能源效率和降低碳強度的項目。我們相信這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好處。

In summary, we are pleased to announce a profitable quarter. Good progress on our sequestration question project. Our plan to increase ethanol production at One Earth Energy to 200 million gallons to maximize 45Z benefit and a NuGen facility signed a carbon offtake agreement with Summit Carbon Solutions. If we continue to make progress, we will be ready to provide low carbon ethanol and byproducts with the social impact of reducing carbon in the atmosphere and the financial impact that empowered company -- that improves company performance for our shareholders.

總之，我們很高興地宣布一個盈利的季度。我們的封存問題項目進展順利。我們計劃將 One Earth Energy 的乙醇產量增加到 2 億加侖，以最大限度地提高 45Z 的效益，並且 NuGen 設施與 Summit Carbon Solutions 簽署了碳承購協議。如果我們繼續取得進展，我們將準備提供低碳乙醇和副產品，具有減少大氣中碳的社會影響以及賦予公司權力的財務影響——為我們的股東提高公司績效。

Once again, we could not achieve this milestone without the hard work and dedication of our colleagues. We are very appreciative of their efforts on achieving these positive results. I will give the floor back to Stuart Rose for additional comments. Thanks, Stuart.

再一次，我們無法實現這一里程碑，這離不開同事們的辛勤工作和奉獻精神。我們非常感謝他們為取得這些積極成果所做的努力。我會將發言權交還給 Stuart Rose 以徵求更多意見。謝謝，斯圖爾特。

Thanks, Zafar. In conclusion, we have great plans as shown by our numbers. We drastically outperformed the other public companies in the industry as far as I know. Great locations, including a great carbon capture possible location in Illinois, which will be our own project, and we also now have a partnership with Summit for our South Dakota plant.

謝謝，紮法爾。總之，我們有很好的計劃，如我們的數字所示。據我所知，我們的表現大大優於該行業的其他上市公司。優越的地理位置，包括伊利諾伊州的一個偉大的碳捕獲可能位置，這將是我們自己的項目，我們現在也與南達科他州的 Summit 工廠建立了合作夥伴關係。

We have great opportunities going forward. But the most important thing, and I talk about it all the time, is we have the best people in ethanol, and now we're leveraging those great people to take advantage of the opportunities in carbon capture. And if things go right, hopefully, we can do great things in carbon capture, best business in the world as a business that can be socially responsible and also have great returns for our shareholders, and that's our goal and we work towards that so far and as team works towards that every day.

我們有很大的機會前進。但最重要的是，我一直在談論它，我們擁有乙醇領域最優秀的人才，現在我們正在利用這些優秀人才來利用碳捕獲方面的機會。如果一切順利，希望我們可以在碳捕集方面做偉大的事情，世界上最好的企業，可以對社會負責，也可以為我們的股東帶來豐厚的回報，這是我們的目標，我們一直在努力實現這一目標並且團隊每天都朝著這個方向努力。

I'll now leave the floor open to questions.

我現在讓大家提問。

(Operator Instructions) And we have a question from Jordan Levy with Truist Securities.

（操作員說明）我們有來自 Truist Securities 的 Jordan Levy 的問題。

It's Mo on for Jordan. Well, congrats on the solid results. Yes, so maybe pivot to pricing. Can you talk about how the corn pricing is tracking recently? And what is your visibility into the summer full season for pricing, presumably, it's a better harvest this year? How should we think about that?

這是喬丹的Mo on。好吧，恭喜你取得了不錯的成績。是的，所以也許轉向定價。你能談談最近玉米價格的走勢嗎？您對夏季全季定價的能見度如何，大概是今年的收成更好？我們應該如何考慮？

I'm sorry, could you repeat that again? Sorry, I just didn't hear it properly.

對不起，你能再重複一遍嗎？對不起，我剛才沒聽清楚。

Yes. So can you maybe talk about the corn pricing? How should we think about the pricing is trending into the summer full months?

是的。那麼你能談談玉米定價嗎？我們應該如何看待整個夏季的定價趨勢？

Okay. I think, as you know, as I mentioned that, the corn bases are continue to strengthen. And even in Illinois, which they are exporting to other -- on Western states, including South Dakota and Kansas and other sites. So I think we probably -- it's going to increase the price as it seems to be, but if it's -- then on the other hand, we have seen that China cancel some of those orders, and that's the reason price dropped, but the bases are still very strong. We have seen somewhere $0.65 to $0.90 plus basis. Did that answer your question?

好的。我認為，正如你所知，正如我提到的那樣，玉米基地正在繼續加強。甚至在伊利諾伊州，他們也出口到其他西部州，包括南達科他州和堪薩斯州以及其他地點。所以我認為我們可能 - 它會像看起來那樣提高價格，但如果它 - 那麼另一方面，我們已經看到中國取消了其中一些訂單，這就是價格下跌的原因，但基地還是很強大的。我們已經看到 0.65 美元到 0.90 美元加上基差。這回答了你的問題嗎？

Yes. Appreciate the color.

是的。欣賞顏色。

It's going to be tough. Corn is going to be tough, but Zafar so far has done an excellent job and his team in managing to get the corn and still get the corn at a price where ethanol plants can be profitable. Hopefully, if we get a good rainy season and last year was drought in South Dakota. If we can get a good rainy season, we can get back to a normal bases -- get back to paying normal, over or under basis. But presently, we're paying significantly over basis.

這將是艱難的。玉米會很艱難，但到目前為止，Zafar 和他的團隊在設法獲得玉米方面做得非常出色，並且仍然以乙醇工廠可以盈利的價格獲得玉米。希望如果我們有一個好的雨季，去年南達科他州乾旱。如果我們能迎來一個好的雨季，我們就能回到正常的基數——回到正常的、高於或低於基數的支付。但目前，我們支付的費用大大超過了基礎。

We do have a question from Robert Maltbie with Singular Research.

Singular Research 的 Robert Maltbie 確實提出了一個問題。

Great quarter. I'm [standing] for Chris, who can't be with us at the moment. We had an overflow from our conference. It's good to see so much interest in the small and micro-cap space. We have about 500 investors on the call. So he's a bit tied up and here I am and he's giving me some notes to follow-up.

偉大的季度。我 [支持] 克里斯，他目前不能和我們在一起。我們的會議人滿為患。很高興看到人們對小型和微型資本領域如此感興趣。我們有大約 500 名投資者參加電話會議。所以他有點忙，我在這裡，他給我一些跟進的筆記。

Congrats on the quarter. It's good to see a small cap wide up the tape here and they dominated in a market dominated by the big cap. So congrats on that. My questions are two-fold. One, could you elucidate a little bit more on the opportunity in the carbon capture as per earnings accretion, revenue growth over the longer term, and how much of a contributor will that be? And the second part is, well, you have -- my quick calculations, still about a $15 a share in cash. And my question is, if -- at what point would you consider a large dividend or some type of a return of capital to shareholders of that cash?

祝賀這個季度。很高興在這裡看到小盤股走高，他們在大盤股主導的市場中佔據主導地位。所以恭喜你。我的問題有兩個。第一，你能否根據收入增長、長期收入增長以及這將有多大貢獻來進一步說明碳捕獲的機會？第二部分是，嗯，你有——我的快速計算，仍然是每股 15 美元左右的現金。我的問題是，如果 - 在什麼時候你會考慮向現金股東發放大額股息或某種類型的資本回報？

Thanks for the questions, Robert. First, in terms of carbon capture, we have hopes, but there's no guarantees. The law allows for, I believe, it's $85 a ton in direct pay from the government and 45Z could be $1 a gallon. So our -- the one plant that we're doing independent of Summit. Well after expansion produce about 200 million gallons. So you can do the arithmetic, but there's no guarantees of anything. This is a couple of year -- maybe 1.5 years, 2 years off at the earliest. So we don't want you to go crazy with your numbers or anything like that, but you can see there's great potential there.

謝謝你的問題，羅伯特。首先，在碳捕獲方面，我們有希望，但沒有保證。我相信，法律允許政府直接支付每噸 85 美元，而 45Z 可能是每加侖 1 美元。所以我們的 - 我們獨立於 Summit 的一家工廠。擴建後產量約為 2 億加侖。所以你可以做算術，但沒有任何保證。這是幾年——可能是 1.5 年，最早是 2 年。所以我們不希望你對你的數字或類似的東西發瘋，但你可以看到那裡有巨大的潛力。

And in terms of the cash and -- we do, and I think we're -- and you've followed us a long time. We probably are the kings of spending our cash and buying back stock. I don't think -- I know of no company on the New York Stock Exchange that has bought back a larger percent of their stock. And when you're a small-cap stock and you generate cash like we do, usually have 1 of 2 choices to pay a dividend or buy back stock. It's always been my feeling buying back stock is a lot smarter because it reduces the earnings per share or reduces -- excuse me, the number of shares outstanding and drastically and has the potential, if we're making money to drastically increase the earnings per share, whereas the dividend, it just goes and it doesn't have the potential to increase earnings per share. So that's our chosen method, and that's what we have preferred to do with our cash.

就現金而言——我們這樣做了，我想我們是——你已經關注我們很長時間了。我們可能是花錢和回購股票的王者。我不認為 - 我知道紐約證券交易所沒有一家公司回購了更大比例的股票。當你是一隻小盤股並且像我們一樣產生現金時，通常有兩種選擇之一來支付股息或回購股票。我一直覺得回購股票要聰明得多，因為它會減少每股收益或減少 - 對不起，流通股的數量並且大幅增加並且有潛力，如果我們正在賺錢以大幅增加每股收益股票，而股息只是去，它沒有增加每股收益的潛力。所以這是我們選擇的方法，也是我們更喜歡用我們的現金做的事情。

We have a question from David Locke with (inaudible) Investments.

我們有來自 David Locke 的（聽不清）Investments 問題。

A couple completely unrelated questions. The first one is, have you guys given any guidance for how much capital you're going to need for the plant expansion and for the carbon capture project?

幾個完全不相關的問題。第一個是，你們有沒有就工廠擴建和碳捕集項目需要多少資金提供任何指導？

I think, as I mentioned previously, and just now in my prepared remarks, we are still evaluating the -- we are trying to expand from 150 million to 200 million instead of 175 million. And when you put those bids to the different people and getting information and that then you realize that it will be better to do $175 million, that $200 million. So we are still analyzing and budgeting those numbers. But at this time, I really cannot pin it on.

我認為，正如我之前提到的，剛才在我準備好的發言中，我們仍在評估——我們正試圖從 1.5 億擴大到 2 億，而不是 1.75 億。當你將這些出價交給不同的人並獲取信息時，你就會意識到做 1.75 億美元會更好，那就是 2 億美元。所以我們仍在分析和預算這些數字。但是這個時候，我真的不能寄託了。

Okay. And then the second question is can you -- do you guys have any opinion or thoughts on sustainable aviation fuel? And if that's something that REX could participate in, or to what extent might that just stoke up some demand for or stoke up some of the supply of U.S. ethanol production?

好的。然後第二個問題是，你們對可持續航空燃料有什麼看法或想法嗎？如果這是 REX 可以參與的事情，或者這會在多大程度上刺激對美國乙醇生產的需求或供應？

I think I can say that we are always looking for new cheese, and we have done some research, and we are in the process of talking to some different companies and trying to find out more about SAF. And we -- that's the one of the also reason that once this 45Z or carbon sequestration things gone, way by that time, the technology will be developed, and we will have a 200 million gallon plant at One Earth Energy and then about 150 NuGen. And as I understand from my research, it's approximately 2-gallon -- for each 2-gallon of ethanol, it's 1 gallon of SAF you can produce. So we are trying to evaluate all those things and looking at the return on investment and analyze also how much investment will be needed to convert those. So at this stage, we have no immediate plans, but we are certainly doing a lot of the research on it.

我想我可以說我們一直在尋找新的奶酪，我們已經做了一些研究，我們正在與一些不同的公司交談並試圖了解更多關於 SAF 的信息。而我們——這也是原因之一，一旦這個 45Z 或碳封存的事情消失了，到那時，技術將會得到發展，我們將在 One Earth Energy 擁有一個 2 億加侖的工廠，然後是大約 150 個 NuGen .正如我從我的研究中了解到的那樣，它大約是 2 加侖——對於每 2 加侖的乙醇，你可以生產 1 加侖的 SAF。因此，我們正在嘗試評估所有這些東西並查看投資回報並分析轉換這些東西需要多少投資。所以在這個階段，我們沒有立即的計劃，但我們肯定會做很多研究。

And one thing I can tell you, we're laser focused on carbon capture. And we don't want to take our eye off the ball and there's a lot of money if we can do it. There's no guarantees. But if we can do it, there's a huge amount of potential income in that area, whereas aviation fuel to date, we don't see anyone -- we are looking at it. We have interest in it. But like a lot of things, we want to see someone else make some money at it before we jump right into it.

我可以告訴你一件事，我們非常專注於碳捕獲。而且我們不想把注意力從球上移開，如果我們能做到的話，會有很多錢。沒有任何保證。但是，如果我們能做到，那麼該領域就會有巨大的潛在收入，而迄今為止，航空燃料，我們還沒有看到任何人——我們正在研究它。我們對此很感興趣。但就像很多事情一樣，我們希望在我們直接投入之前看到別人從中賺錢。

Right. But would you -- do you think -- would you agree that you guys could essentially sort of passively participate in that market to the extent that it develops just because it should use a substantial amount of ethanol as a feedstock.

正確的。但是你會 - 你認為 - 你是否同意你們基本上可以在某種程度上被動參與該市場的發展，只是因為它應該使用大量乙醇作為原料。

We absolutely -- sure, if someone successful, they're going to -- these -- a lot of these companies are not big ethanol players that are developing -- that are trying to develop aviation fuel, so they're going to need a source of ethanol. We'll sell our ethanol to anyone at the highest price. We have every chance to benefit from that if someone is successful.

我們絕對 - 當然，如果有人成功，他們會 - 這些 - 這些公司中的很多都不是正在開發的大型乙醇公司 - 他們正在努力開發航空燃料，所以他們將需要乙醇的來源。我們將以最高價格將乙醇出售給任何人。如果有人成功，我們就有機會從中受益。

And -- in fact, we're more likely. Some people have contracts to sell their ethanol for other uses. Ours, we are very little, and we don't have like -- we might go a month or 2 out, but we don't have contracts. So we'd be a perfect place for people to buy ethanol if they're successful and would be a perfect place to supply them new ethanol.

而且——事實上，我們更有可能。有些人簽訂了出售乙醇用於其他用途的合同。我們的，我們很少，而且我們沒有——我們可能會出去一兩個月，但我們沒有合同。因此，如果人們成功了，我們將是他們購買乙醇的理想場所，也是向他們提供新乙醇的理想場所。

And then just on capital allocation, and you guys regularly talk on every call about how you're always looking around for plants that might be for sale. I'm assuming that -- it's very much cheaper to expand capacity at existing plants than it is to buy somebody's existing plants at this point in terms of just increasing the overall footprint of your company?

然後就資本分配而言，你們經常在每次電話會議上談論你們如何總是四處尋找可能出售的工廠。我假設 - 就增加公司的整體足跡而言，擴大現有工廠的產能比購買某人的現有工廠要便宜得多？

Yes. We've come close to buying plants before and have tried very hard to buy plants before. But today, I don't know of any really good plants that can be bought at a reasonable price. And so I think what you're saying is exactly right, it's much cheaper in today's market to try to expand capacity, and that's what Zafar is doing.

是的。我們之前已經接近購買植物並且之前非常努力地購買植物。但是今天，我不知道有什麼真正好的植物可以以合理的價格買到。所以我認為你說的完全正確，在當今市場上嘗試擴大產能要便宜得多，這就是 Zafar 正在做的事情。

Okay. And is there anybody out there that's thinking of building a greenfield plant? Or is everything just kind of 25 million gallons here, another 25 million gallons there?

好的。有沒有人在考慮建造一個綠地工廠？或者這裡的一切都是 2500 萬加侖，那裡還有 2500 萬加侖？

We know of no one, but there could be -- Zafar, do you know if anyone that's considering it at this time?

我們不知道有人，但可能有-- Zafar，你知道此時是否有人在考慮嗎？

I'm not really aware of that.

我真的不知道。

I don't know if anyone, and I don't -- it's been a tough market over the years. And we think it's going to -- we've done way better than the industry but the industry is not done -- it hasn't been as good of an investment for everything else. And for most of the other players it's us. So I think most of the other players are doing what we're doing is concentrating on other ways to make money out of the ethanol instead of opening new ethanol plants. That does not mean we'll never look at opening new ethanol plants. But to date, we don't -- we have no plans, and I don't know of anyone else.

我不知道是否有人，我也不知道——多年來這是一個艱難的市場。我們認為它會——我們做得比這個行業好得多，但這個行業還沒有完成——它對其他一切的投資都沒有那麼好。對於大多數其他玩家來說，是我們。所以我認為大多數其他參與者正在做我們正在做的事情，就是專注於其他方式來從乙醇中賺錢，而不是開設新的乙醇工廠。這並不意味著我們永遠不會考慮開設新的乙醇工廠。但到目前為止，我們沒有——我們沒有計劃，我不知道其他人有沒有。

Yes. And also, I think we are concentration in to make sure that we reduce our CI score which is -- as I mentioned, we are looking at several other projects. So our goal is to somehow further reduce our CI score as low as practically possible. And that also needs some investment. And we'd rather spend that money on those, which will be more beneficial for 45Z and carbon sequestration and return on investment will be very quick.

是的。而且，我認為我們正在集中精力確保我們降低我們的 CI 分數——正如我提到的，我們正在研究其他幾個項目。所以我們的目標是以某種方式進一步降低我們的 CI 分數，盡可能低。這也需要一些投資。我們寧願把錢花在那些上，這對 45Z 和碳封存更有利，而且投資回報會非常快。

There are no further questions at this time. I'll turn the call back to Stuart Rose.

目前沒有其他問題。我會把電話轉回 Stuart Rose。

Thank you. We'd like to thank everyone for being on the call, and we'll talk to you at the end of next quarter. Thank you very much. Bye.

謝謝。我們要感謝大家的來電，我們將在下個季度末與您交談。非常感謝。再見。

That does conclude the call for today. We thank you for your participation and ask that you please disconnect your line.

這確實結束了今天的呼籲。我們感謝您的參與並請您斷開您的線路。