REX American Resources Corp (REX) 2023 Q2 法說會逐字稿

Greetings, and welcome to the REX American Resources Fiscal 2023 Second Quarter Conference Call. (Operator Instructions) I would now like to turn the conference over to Mr. Doug Bruggeman, Chief Financial Officer. Please go ahead.

您好，歡迎參加 REX 美國資源 2023 財年第二季度電話會議。 （操作員指示）我現在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 2023 second 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 財年第二季度電話會議。我們將立即進行演示和評論以及問答環節，但首先，我將回顧一下安全港披露。

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. 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.

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，但不是未來表現的保證。因此，實際結果可能與預期存在重大差異。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（包括公司 10-K 和 10-Q 表格的報告）中進行了描述。

REX American Resources assumes no obligation to publicly update or revise any forward-looking statements. I have joining me on the call today, Stuart Rose, Executive Chairman of the Board; and Zafar Rizvi, Chief Executive Officer. I'll first review our financial performance and then turn the call over to Stuart for his comments. Sales for the second quarter decreased by 11.8%, primarily due to lower unit pricing across all products as well as slightly lower ethanol gallons sold year-over-year.

REX American Resources 不承擔公開更新或修改任何前瞻性陳述的義務。今天我將與董事會執行主席斯圖爾特·羅斯一起參加電話會議；和首席執行官紮法爾·里茲維 (Zafar Rizvi)。我將首先審查我們的財務業績，然後將電話轉給斯圖爾特以徵求他的意見。第二季度銷售額下降 11.8%，主要是由於所有產品的單位價格下降以及乙醇加侖銷量同比略有下降。

Ethanol sales for the quarter were based upon 69.1 million gallons this year versus 71.4 million in the prior year. We reported gross profit of $18.4 million this year versus gross profit of $14.1 million in the prior year as we benefited from lower corn and natural gas pricing over the prior year second quarter. SG&A increased for the second quarter from $6.7 million to $8.6 million. This increase is primarily related to stock incentive executive compensation expense upon issuance during the quarter. As highlighted in the press release in the second quarter, the company made a change in the method of accounting to begin classifying shipping and handling costs as cost of sales rather than within selling, general and administrative expense as historically presented, in order to improve the comparability of gross profit and SG&A reported.

本季度乙醇銷量為 6910 萬加侖，去年同期為 7140 萬加侖。我們報告今年的毛利潤為 1,840 萬美元，而去年的毛利潤為 1,410 萬美元，因為我們受益於去年第二季度較低的玉米和天然氣價格。第二季度的 SG&A 從 670 萬美元增加到 860 萬美元。這一增長主要與本季度發行時的股票激勵高管薪酬費用有關。正如第二季度新聞稿中所強調的那樣，該公司改變了會計方法，開始將運輸和裝卸成本分類為銷售成本，而不是像歷史上那樣分類為銷售、一般和管理費用，以改善報告的毛利潤和銷售、一般管理費用的可比性。

The company has applied a retrospective application of this new accounting policy. I'd like to point out this change only impacts cost of goods sold and selling, general and administrative expense and has no impact on earnings reported. We had income of $3 million from our unconsolidated equity investments in this year's second quarter versus $3.6 million in the prior year as the prior year number included approximately $1.6 million of income for our share of their COVID relief grants received from the USDA in the prior year.

本公司已追溯適用新會計政策。我想指出的是，這一變化僅影響銷售成本和銷售成本、一般費用和管理費用，對報告的收益沒有影響。今年第二季度，我們的未合併股權投資收入為300 萬美元，而上一年的收入為360 萬美元，因為上一年的數字包括我們在上一年從美國農業部收到的新冠疫情救濟撥款中所佔份額的約160 萬美元收入。

We reported interest and other income of $3.3 million versus $8.2 million in the prior year. The prior year included approximately $7.8 million from the aforementioned USDA COVID-19 relief grants received by our consolidated plants. In the current year, the company has continued to benefit from higher interest rates on our cash and short-term investments. These items led to income before income taxes and noncontrolling interest of $16.1 million compared with $19.2 million in the comparable year ago period. However, excluding the benefit of the COVID-19 relief grants received in quarter 2 of last year, income before income taxes, noncontrolling interest increased 64.3% to $16.1 million in quarter 2 of the current year versus $9.8 million in the prior year.

我們報告的利息和其他收入為 330 萬美元，而上一年為 820 萬美元。去年，我們的合併工廠收到了上述美國農業部 COVID-19 救濟撥款中的約 780 萬美元。今年，公司繼續受益於現金和短期投資利率的上升。這些項目帶來的所得稅和非控股權益前收入為 1,610 萬美元，而去年同期為 1,920 萬美元。然而，排除去年第二季度收到的 COVID-19 救濟金的好處，今年第二季度所得稅、非控股利息前的收入增長了 64.3%，達到 1610 萬美元，而上一年為 980 萬美元。

We reported a tax provision of $3.8 million for this year versus a provision of $4.3 million in the prior year. This led to net income attributable to REX shareholders of $9.1 million for this year versus $11.2 million in the prior year second quarter. Net income per share attributable to REX shareholders were $0.52 for this year versus $0.63 in the prior year.

我們報告今年的稅收撥備為 380 萬美元，而上一年的稅收撥備為 430 萬美元。這導致今年 REX 股東應占淨利潤為 910 萬美元，而去年第二季度為 1120 萬美元。今年歸屬於 REX 股東的每股淨利潤為 0.52 美元，而上一年為 0.63 美元。

I'll now turn the call over to Stuart for his comments.

現在我將把電話轉給 Stuart，徵求他的意見。

Thank you, Doug. Earnings right now are running at a rate in the third quarter that is expected to be significantly better than last year's third quarter -- or excuse me, significantly better than last year's quarter -- than the quarter that we're currently in and significantly better than the third quarter that we're about to go into, so far, we'll discuss this further. Our cash balance is approximately $284 million uses include short-term investments, which we expect during the third quarter to earn a higher rate in the third quarter than the second quarter.

謝謝你，道格。目前第三季度的盈利預計將明顯好於去年第三季度——或者對不起，明顯好於去年第三季度——比我們目前所處的季度要好得多比我們即將進入的第三季度，到目前為止，我們將進一步討論這個問題。我們的現金餘額約為 2.84 億美元，用途包括短期投資，我們預計第三季度的盈利率將高於第二季度。

Ethanol expansion, which Zafar Rizvi, our CEO, will talk about later. Stock buybacks continue, but only on dips, we have not had dips recently. So at the moment, we have not bought back -- or are not buying back stock, but we'll buyback if we see dips.

乙醇擴張，我們的首席執行官紮法爾·里茲維（Zafar Rizvi）稍後將討論這一點。股票回購仍在繼續，但僅限於逢低，我們最近沒有出現過逢低。因此，目前我們還沒有回購股票，或者說沒有回購股票，但如果我們看到下跌，我們就會回購。

We're also the biggest use -- will also be the carbon capture operation that is well on the way, which again Zafar will talk about later. We also have hopes, if possible, to use our carbon capture operation, not just for our operation look for others and may come along eventually that could also be a use of our cash.

我們也是最大的用途——也將是正在進行中的碳捕獲操作，紮法爾稍後將再次討論這一點。如果可能的話，我們還希望利用我們的碳捕獲業務，而不僅僅是我們的業務尋找其他業務，並且最終可能會使用我們的現金。

I'll now turn the call over to Zafar Rizvi, who will talk about -- more about our ethanol operation and our carbon capture operation.

我現在將把電話轉給紮法爾·里茲維（Zafar Rizvi），他將更多地談論我們的乙醇業務和碳捕獲業務。

Good morning, everyone. Thank you, Stuart. As I mentioned in the previous call, we saw improvements in the early stage of the second quarter, which led to the quarter profit then in this first quarter 2023, we are pleased with our team, they produced better results than in the previous quarter and even better than last year's second quarter. After considering the total $9.4 million impact of the COVID-19 grants. According to the EIA August 23 report, ethanol stock and production drop during the week ending August 18.

大家，早安。謝謝你，斯圖爾特。正如我在之前的電話會議中提到的，我們在第二季度初期看到了改善，這導致了2023 年第一季度的季度利潤，我們對我們的團隊感到滿意，他們取得了比上一季度更好的業績，並且甚至比去年第二季度還要好。考慮到 COVID-19 贈款總計 940 萬美元的影響後。根據 EIA 8 月 23 日的報告，截至 8 月 18 日當週乙醇庫存和產量均下降。

We have also seen natural gas price dropped considerably which has a positive impact on our financial results. The August 11, 2023, USDA report showed an expected output of 15.1 billion bushels of corn, second highest on record and 175.1 bushels per acre yield for the year 2023, '24. We are pleased with the early forecast of corn yields in the Marian South Dakota this year, 145 bushels per acre compared to 132 bushels last year and also approximately 458,000 more acres of corn were planted this craft year compared to last year.

我們還看到天然氣價格大幅下降，這對我們的財務業績產生了積極影響。 2023 年 8 月 11 日，美國農業部報告顯示，預計 2023 年玉米產量為 151 億蒲式耳，創歷史第二高，24 年每英畝產量為 175.1 蒲式耳。我們對今年瑪麗安南達科他州玉米產量的早期預測感到滿意，每英畝產量為 145 蒲式耳，而去年為 132 蒲式耳，而且今年玉米種植面積比去年增加了約 458,000 英畝。

We expect corn yield in the Gibson City area to be less favorable which is 201 bushels per acre this year compared to 214 bushels per acre last year, but almost 700,000 more acres were planted this year compared to last year. Looking ahead, the drop in ethanol and DDG export could negatively affect future results of this. If this discontinue, ethanol export through June 2023 were 705 million gallons compared to 828 million gallons in 2022.

我們預計吉布森市地區的玉米產量不太理想，今年為每英畝 201 蒲式耳，而去年為每英畝 214 蒲式耳，但今年的種植面積比去年增加了近 700,000 英畝。展望未來，乙醇和DDG出口的下降可能會對未來的結果產生負面影響。如果這種情況停止，到 2023 年 6 月的乙醇出口量將為 7.05 億加侖，而 2022 年為 8.28 億加侖。

During the same period, ethanol exports have dropped 15% since 2022, DDG export -- DDG export through June 2023 were 5.1 million metric ton compared to 5.7 million metric tons, a decrease of approximately 584 metrics, 584,000 metric tons compared to the same period 2022. Considering all these factors, if we continue to source corn at a reasonable price, export of ethanol DDG increase, and we don't face any major logistic problem, we believe at this early stage of the third quarter will be profitable and even better than last year and could be better than this quarter.

同期，乙醇出口自 2022 年以來下降了 15%，DDG 出口——截至 2023 年 6 月，DDG 出口量為 510 萬噸，而同期為 570 萬噸，同比減少約 584 噸，即 584,000 噸2022年。考慮到所有這些因素，如果我們繼續以合理的價格採購玉米，乙醇DDG的出口增加，並且我們沒有面臨任何重大的物流問題，我們相信在第三季度初期將實現盈利，甚至好於去年，也可能好於本季度。

Let me provide an update on our carbon sequestration project and One Earth Ethanol Energy plant expansion. As I mentioned in our previous call, we are pleased to publish the a sustainability report early in the year, highlighting what we have accomplished while addressing the sustainability economy and our source of responsibilities as a large. We believe our carbon captive project will further advance our sustainability goals and financial impact that improves company performance for our shareholders. We have budgeted approximately $165 million to build a carbon capture compression and storage facility, the expansion of the One Earth Energy plant to 200 million gallons annually and other projects related to reducing carbon intensity.

讓我介紹一下我們的碳封存項目和 One Earth 乙醇能源工廠擴建的最新情況。正如我在之前的電話會議中提到的，我們很高興在今年年初發布可持續發展報告，強調我們在解決可持續發展經濟方面所取得的成就以及我們的責任來源。我們相信，我們的碳捕獲項目將進一步推進我們的可持續發展目標和財務影響，從而為我們的股東提高公司業績。我們已預算約 1.65 億美元，用於建設碳捕獲壓縮和儲存設施、將 One Earth Energy 工廠擴建至每年 2 億加侖，以及與降低碳強度相關的其他項目。

We plan to build One Earth Energy sequestration carbon capture and storage facility in Gibson City. The contract to build the capture and compression facilities have been signed and long-lead items were ordered previously, we expect facility construction will start in the middle of September. The delivery of all modular compression equipment for the facility is scheduled to be delivered by February 2024. The construction of the facility is expected to be completed by July 31, 2024, at which time testing of the facility will commence.

我們計劃在吉布森市建設 One Earth Energy 碳捕獲和封存設施。建造捕集和壓縮設施的合同已經簽署，並且之前已訂購了長周期項目，我們預計設施建設將於 9 月中旬開始。該設施的所有模塊化壓縮設備預計將於 2024 年 2 月交付。該設施的施工預計將於 2024 年 7 月 31 日完成，屆時將開始對該設施進行測試。

We continue to complete the paperwork of different government permits and requirements of agencies, while we are waiting for the EPA approved Class 6 permit per carbon injection. We answered 2 inquiries of the EPA regarding Class 6 permits. This is highly technical, very time-consuming project, and it depends on several local state and federal agencies approval. Unfortunately, we cannot predict when we will receive all these permits from different local states and federal governments and any delays in construction.

我們將繼續完成不同政府許可證和機構要求的文書工作，同時等待 EPA 批准每次碳注入的 6 級許可證。我們回答了 EPA 關於 6 類許可證的 2 項詢問。這是一個技術性很強、非常耗時的項目，並且取決於多個當地州和聯邦機構的批准。不幸的是，我們無法預測何時會收到不同當地州和聯邦政府的所有這些許可以及施工是否會出現延誤。

In other updates, our NuGen ethanol facilities partnered with Summit Carbon Solutions, a developer of the world's largest carbon pipeline and a decent Big River Resources entered an agreement with the navigator and other carbon pipeline company. We are pleased about the big milestone we have reached so far and hope different government agencies will complete their approval this year or early next year. Regarding the One Earth Energy plant expansion, we have plans to increase ethanol production to 200 million gallons a year.

在其他更新中，我們的 NuGen 乙醇設施與 Summit Carbon Solutions 合作，Summit Carbon Solutions 是世界上最大的碳管道開發商，而體面的 Big River Resources 則與領航者和其他碳管道公司達成協議。我們對迄今為止所達到的重大里程碑感到高興，並希望不同的政府機構能夠在今年或明年初完成批准。關於 One Earth Energy 工廠擴建，我們計劃將乙醇產量增加到每年 2 億加侖。

We have received an EPA permit to produce 175 million gallons per year for this facility we must achieve 175 million-gallon year production, which is expected late last -- late next year before we can apply for a 200 million-gallon a year production permit. Because this is a 2-step process. We have to achieve 175 million-gallon and before we apply 200 million gallons. So this -- but the facility will be capable of producing 200 million gallons from the day 1.

我們已獲得 EPA 許可，該工廠每年生產 1.75 億加侖，我們必須實現 1.75 億加侖的年產量，預計去年年底 - 明年年底，然後我們才能申請每年 2 億加侖的生產許可證。因為這是一個兩步過程。我們必須達到 1.75 億加侖，然後才能使用 2 億加侖。所以，從第一天起，該設施將能夠生產 2 億加侖。

The plant current capacity is approximately 150 million gallons a year. We also continue to evaluate other projects that would improve energy efficiency and reduce carbon intensity, the clean fuel production credit Section 45Z, which is related to a reduced fuel carbon intensity score could provide as much as $1 a gallon depending on the carbon intensity of the ethanol produced and sold. If we successfully achieved these goals, we will be prepared to provide low carbon ethanol and bio products with a social impact on reducing carbon in the atmosphere and the financial impact that improved the company's performance for our shareholders.

該工廠目前的產能約為每年 1.5 億加侖。我們還繼續評估其他能夠提高能源效率和降低碳強度的項目，與降低燃料碳強度分數相關的清潔燃料生產信用第 45Z 條可以提供高達每加侖 1 美元的費用，具體取決於燃料的碳強度生產和銷售乙醇。如果我們成功實現這些目標，我們將準備提供低碳乙醇和生物產品，對減少大氣中的碳產生社會影響，並為股東提高公司業績的財務影響。

In summary, we are pleased to announce a profitable quarter, actually the 12th consecutive profitable quarter continuous progress on our carbon sequestration project, a plan to increase ethanol production at One Earth Energy to 200 million gallons to maximize 45Z benefits and signed carbon offtake agreement with the pipeline companies at NuGen and Big River. 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 goals.

總之，我們很高興地宣布一個盈利季度，實際上是我們的碳封存項目連續第12 個盈利季度持續取得進展，該計劃將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，並與NuGen 和 Big River 的管道公司。再一次，沒有我們同事的辛勤工作和奉獻，我們不可能實現這一里程碑。我們非常感謝他們為實現這些積極目標所做的努力。

I'll give the floor back to Stuart Rose for additional comments. Stuart?

我將請斯圖爾特·羅斯發言以徵求更多意見。斯圖爾特？

Thank you Zafar. In conclusion, our results again this quarter outperformed most of the industry, especially the other public companies and going forward, during the next quarter, again, we expect to do significantly better in the third quarter of this year than we did in the third quarter of last year.

謝謝紮法爾。總之，我們本季度的業績再次優於大多數行業，尤其​​是其他上市公司，展望未來，在下個季度，我們再次預計今年第三季度的表現將明顯好於第三季度去年的。

If our results keep going along as they have gone along so far during this quarter. We feel we have the best ethanol plants in the -- among the best ethanol plants in the industry, location is good, the crops look like they'll be pretty good and pretty good to real good this year.

如果我們的業績繼續像本季度迄今為止的那樣發展。我們覺得我們擁有業內最好的乙醇工廠——在行業中最好的乙醇工廠之一，位置很好，今年的作物看起來會非常好，而且非常好甚至非常好。

We were a little worried about that earlier, but things seem to have gotten better. And the biggest thing we have, as afar said earlier, we feel we have the best people working for us in the ethanol industry, and these are the same people that will be working for us and our shareholders in the carbon capture industry. And if we can do what we did in ethanol and carbon capture, we hope to have a much, much larger, much, much more profitable company.

早些時候我們有點擔心，但情況似乎已經好轉了。正如阿法爾之前所說，我們擁有的最重要的一點是，我們認為我們擁有乙醇行業最優秀的人才，而這些人也將在碳捕獲行業為我們和我們的股東工作。如果我們能夠像在乙醇和碳捕獲方面所做的那樣，我們希望擁有一家規模更大、利潤更高的公司。

I'll now leave the floor open to questions.

現在請大家提問。

(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 exciting update and a nice quarter. And just thinking about the carbon capture side of things, maybe -- maybe for the far. There's clearly been a lot of Class 6 permits that have been submitted for approval, but you all talked to moving forward with construction starting in September and that sort of thing. And I think it's fair to say that you all as a team tend to be pretty conservative with how you approach investment opportunities. So maybe just give us a little bit on how you're thinking about potential for approval in the time line there on the EPA knowing that you kind of have the time line you've ordered some of the long lead time equipment there.

真正令人興奮的更新和美好的季度。只是想想碳捕獲方面的事情，也許——也許是長遠的。顯然有很多 6 級許可證已提交審批，但你們都談到了要推進 9 月份開始的建設之類的事情。我認為可以公平地說，作為一個團隊，你們在對待投資機會的方式上往往相當保守。因此，也許請告訴我們一些關於您如何考慮在 EPA 的時間表中獲得批准的可能性，因為您知道您在那裡訂購了一些長交貨期設備的時間表。

I think what -- as I mentioned that we have 2 inquiries from EPA. So it's almost 9 months since we applied for the permit. Generally speaking, it takes about somewhere 6 months to 18 months. So we expect that we will have the permit before the end of 2024. And -- and earlier, since we have not many inquiries for our conversation with EPA, we understand they are now looking at the technical aspect of those documents which we provided. And so far, we have no inquiries.

我想——正如我提到的，我們收到了 EPA 的 2 項詢問。距離我們申請許可證已經快9個月了。一般來說，大約需要6個月到18個月。因此，我們預計我們將在 2024 年底之前獲得許可證。而且，更早之前，由於我們與 EPA 的對話沒有太多詢問，我們了解到他們現在正在研究我們提供的這些文件的技術方面。到目前為止，我們還沒有收到任何詢問。

But if we don't start our construction and we don't do all these things, then the people who have not started already, there will be at least 2 to 3 years behind because a lot of these lead items, it takes some close to 18 months to 2 years -- 18 months to 2 years before you receive. So some of these, we had started earlier. And then part of the thing is we are also expanding our plant to 200 million-gallon and once we expanded that 200 million gallon, if there is any delay, we will be still working on several other projects, which can reduce our carbon intensity of the intensity score for our ethanol plant. So we will still benefit from 45Z but we may not be benefit as much as we like to have on carbon sequestration. So delay can -- delay that, but we still will benefit partly in early stage of 2025 from a carbon intensity reduction, which we're working on different other projects.

但如果我們不開始建設，不做所有這些事情，那麼那些還沒有開始建設的人，至少會落後 2 到 3 年，因為很多這些主導項目，需要一些關閉到18 個月到2 年——您收到之前18 個月到2 年。所以其中一些我們很早就開始了。部分原因是我們還將把我們的工廠擴大到 2 億加侖，一旦我們擴大了 2 億加侖，如果有任何延遲，我們仍將開展其他幾個項目，這可以減少我們的碳強度我們乙醇工廠的強度得分。因此，我們仍然會從 45Z 中受益，但在碳封存方面我們可能不會像我們希望的那樣受益。因此，推遲可以推遲，但我們仍然會在 2025 年早期從碳強度降低中部分受益，我們正在開展不同的其他項目。

Absolutely.

絕對地。

Jordan answer your question a little further, a lot of people of Johnny come lately are applying. We've worked on this with the University of Illinois with the University of Illinois getting the government grant. We've been working on this for years, people think they can just walk in and get this type of permit. And you're right, we are seeing a lot of applications but they are so far behind, we believe where we are and we're so far behind in both the permitting process and the work that they've done on their projects that they can't even -- they're not even close to being at the same level that we are. And it's -- a lot of people are just putting these projects and talking about it. They're not -- they -- they may or may not happen, and they may or may not be real. They don't even know yet if the EPA and we don't know for sure that the EPA is going to approve us, but we do know that we've been working on the right way and doing it for a long, long time with U.S. government grant to the University of Illinois, which has been working on it with us. .

Jordan回答你的問題再遠一點，最近Johnny來的很多人都在申請。我們與伊利諾伊大學合作，伊利諾伊大學獲得了政府撥款。我們多年來一直致力於此，人們認為他們可以直接走進去並獲得此類許可證。你是對的，我們看到了很多申請，但它們遠遠落後，我們相信我們所處的位置，我們在許可流程和他們在項目上所做的工作方面都遠遠落後於他們甚至不能——他們甚至還沒有達到與我們相同的水平。很多人只是提出這些項目並談論它。它們不是——它們——它們可能會發生，也可能不會發生，它們可能是真的，也可能不是真的。他們甚至還不知道美國環保署是否會批准我們，但我們確實知道我們一直在以正確的方式工作，並且已經這樣做了很長很長時間美國政府向伊利諾伊大學提供資助，該大學一直在與我們合作。 。

Which has already done a carbon capture project with our Daniels. So we have a lot going for us and a lot of these others just think you can throw in a permit application and get a well. It doesn't work that way. It's a very, very complicated process. And we're way, way along in that process.

它已經和我們的丹尼爾斯一起完成了碳捕獲項目。所以我們有很多事情要做，而其他很多人只是認為你可以提交許可證申請並獲得一口井。事實並非如此。這是一個非常非常複雜的過程。我們在這個過程中已經取得了很大進展。

Absolutely seems that way and certainly impressive the work that you've all been able to do on that front. Maybe on a somewhat separate issue. The $165 million that you all talked about being budgeted for carbon capture and plant expansion. Maybe if you could just help break us -- break that down for us and in terms of what that all constitutes and any sort of incremental CapEx that might be required for any additional initiatives?

看起來絕對是這樣，而且你們在這方面所做的工作肯定令人印象深刻。也許是在一個稍微獨立的問題上。你們都談到了 1.65 億美元的預算用於碳捕獲和工廠擴建。也許你可以幫助我們打破——為我們打破這一點，並了解這一切的構成以及任何其他舉措可能需要的任何增量資本支出？

I think we have not really disclosed. This is basically a budget we estimate, but we have not disclosed how much will be for carbon sequestration, and how much will be for ethanol facility and other at this stage. So I'm not sure that I can disclose that at this stage. But we certainly had total budget, we estimate $165 million that include the subsurface area, the well and pipeline for about 4 to 5 miles and then construction of the facility and then included that production from 150 million to 200 million gallons. So that's all inclusive, $165 million.

我認為我們還沒有真正披露。這基本上是我們估計的預算，但現階段我們還沒有透露碳封存的費用以及乙醇設施和其他設施的費用。所以我不確定現階段是否可以透露這一點。但我們當然有總預算，我們估計 1.65 億美元，其中包括地下區域、大約 4 到 5 英里的油井和管道，然後是設施建設，然後包括 1.5 億到 2 億加侖的產量。總計 1.65 億美元。

Okay. That's great. And just to clarify, Zafar, you mentioned this being kind of a 2-step process on the planned expansion, but the $165 million would include the expansion to $200 million, even if you have to show you can run $175 million first.

好的。那太棒了。 Zafar，為了澄清一下，你提到這是計劃擴張的兩步流程，但 1.65 億美元將包括擴張至 2 億美元，即使你必須證明你可以先運行 1.75 億美元。

That's right. Exactly. So yes, the plant will be designed, which we already designed and some of the fermentation times have already been built. So which we designed is going to -- will be capable of producing 200 million-gallon the day 1 when it will be in expansion will be completed.

這是正確的。確切地。所以，是的，我們已經設計了工廠，並且已經建立了一些發酵時間。因此，我們設計的將在擴建完成的第一天能夠生產 2 億加侖。

But the EPA required $150 million we have to show them to stack testing and other testing to see we are $175 million and then immediately after that, they do the testing to make sure we are complying with that, then we apply for $200 million. So even in '24, when we apply and for the $200 million, and we received in 2025, that will apply for the whole year that we can produce 200 million-gallon. So even we received in February or March for 200 million gallons, so that will be 200 million-gallon for 2025.

但是 EPA 要求 1.5 億美元，我們必須向他們展示堆棧測試和其他測試，才能看到我們有 1.75 億美元，然後他們立即進行測試以確保我們遵守這一要求，然後我們申請 2 億美元。因此，即使在 24 年，當我們申請並在 2025 年收到 2 億美元時，這也將適用於我們可以生產 2 億加侖的全年。因此，即使我們在 2 月或 3 月收到了 2 億加侖的石油，那麼 2025 年將達到 2 億加侖。

The $165 million also, as Zafar pointed out, includes a lot of improvements we're making to lower our CO2 intensity, which it's technical, but it makes a big difference in 45Z calculations. And we are working very hard. He is working and our company is working very hard and reducing our CO2 score.

正如紮法爾指出的，這 1.65 億美元還包括我們為降低二氧化碳強度所做的許多改進，這是技術性的，但它在 45Z 計算中產生了很大的差異。我們正在非常努力地工作。他正在工作，我們公司正在非常努力地工作並降低我們的二氧化碳排放量。

Our next question comes from Pavel Molchanov with Raymond James.

我們的下一個問題來自帕維爾·莫爾恰諾夫和雷蒙德·詹姆斯。

You touched on what you've seen in terms of corn purchasing. I guess if we zoom out for a moment, corn is now the cheapest it's been since the pre-COVID era. And I'm curious if you think this kind of $4 a bushel number is sustainable.

您談到了您在玉米採購方面所看到的情況。我想，如果我們把目光放遠一點，玉米現在是自新冠疫情爆發前時代以來最便宜的價格。我很好奇你是否認為這種每蒲式耳 4 美元的價格是可持續的。

It's hard to say. I think it's all depend -- ultimately the production and then also depends how quickly the harvest comes. And so -- and then if the harvest -- the final results could be different than what we see now. And as you know, there's some heat waves going on, but we believe that's not going to be a major impact because the corn is already tenting. But we really cannot predict what will be the price will be in the future, but it's all a matter of supply and demand and export and then as you know, Ukraine and so many international events can change that price of the corn, we have seen that Brazil has producing a bumper crops but even then their crops is the price is coming very close to the U.S. corn crops since we have corn price -- since the corn price has dropped. So this is really depend on several international matters. It's hard to say all at this stage.

很難說。我認為這一切都取決於——最終取決於產量，然後還取決於收穫的速度。因此，如果收穫的話，最終結果可能會與我們現在看到的不同。如您所知，正在發生一些熱浪，但我們相信這不會產生重大影響，因為玉米已經結冰了。但我們確實無法預測未來的價格會是多少，但這都是供求和出口的問題，然後如你所知，烏克蘭和許多國際事件可以改變玉米的價格，我們已經看到巴西農作物豐收，但即便如此，他們的農作物價格仍非常接近美國玉米農作物，因為我們有玉米價格——因為玉米價格已經下跌。所以這實際上取決於幾個國際事務。現階段很難說全部。

Okay. Maybe in terms of what you guys can control, and I've asked you this question before multiple times. Are you seeing any opportunistic M&A kind of potential in terms of getting our capacity expanded through some asset acquisitions?

好的。也許就你們能控制的而言，我之前已經多次問過你們這個問題了。您是否看到了通過一些資產收購擴大我們的產能方面的機會主義併購潛力？

Not currently. We have in the past, and we've tried hard to get them. But currently, we -- I don't -- I have not seen anything. In fact, I think people are doing better now and the best time to buy a company at the prices, we want to pay when things aren't so good, and things in the industry certainly become much better in the last couple of months. So I think our attention properly is on carbon capture and maybe other uses of our we have 3 potential carbon capture projects.

不是現在。我們過去曾經做到過，並且我們一直在努力爭取它們。但目前，我們——我沒有——我還沒有看到任何東西。事實上，我認為人們現在做得更好，也是以當前價格購買公司的最佳時機，我們希望在情況不太好的時候付款，而且行業的情況在過去幾個月肯定會變得更好。所以我認為我們的注意力應該集中在碳捕獲上，也許我們有 3 個潛在的碳捕獲項目的其他用途。

One of them, we hope to be ready pretty quick in the next couple of years, but we have 2 others that we've applied with the EPA. And I think our potential of growth is to find uses for those carbon capture projects, whether it's our own uses or taking someone else's carbon in, and that's probably more than mergers of other ethanol companies. I think that is probably a better focus of our time at this point in time.

其中之一，我們希望在未來幾年內很快準備好，但我們還有另外兩個已向 EPA 申請。我認為我們的增長潛力是找到這些碳捕獲項目的用途，無論是我們自己的用途還是吸收別人的碳，這可能比其他乙醇公司的合併更多。我認為這可能是我們此時此刻更好的焦點。

I will add that, I think, Pavel, if you look at it, originally, the ethanol facility was 100 million-gallon and we have grown that our consumption from 250 million gallons the both location from 100 million gallon to 150 million gallon. Now we are growing organically from 150 million gallons to 200 million gallons. So we certainly are growing our ethanol production over the year. And then the most important thing is we know these plants. We know how the -- what corns of availability in that area. And we think it's much better to grow organically than acquisition of some other locations and find out that location was not as good as we had our own plants.

我想補充一點，帕維爾，如果你看一下，最初，乙醇工廠的產量為 1 億加侖，我們已經將消耗量從 2.5 億加侖增加到了 1 億加侖到 1.5 億加侖。現在我們的有機產量從 1.5 億加侖增長到 2 億加侖。因此，我們今年的乙醇產量肯定會增加。最重要的是我們了解這些植物。我們知道該地區的可用性如何。我們認為，有機增長比收購其他一些地點要好得多，然後發現這些地點不如我們擁有自己的工廠。

Our next question comes from Chris Sakai with Singular Research.

我們的下一個問題來自 Singular Research 的 Chris Sakai。

Yes. Can you.. Yes, the price of natural gas and how that's affecting your profitability?

是的。您能...是的，天然氣的價格以及它如何影響您的盈利能力？

I think the natural gas price has considerably dropped over last year at this time, it was trading close to $6 million to $7 million. Now it's about $4 million a $3 million or less. Suddenly, it's a major impact on P&L because that's the second highest expense we have. So certainly is helping and we believe that this will continue at least this year. The natural price will continue to be same or a little bit better but we cannot predict what happened in the winter season in January, February, March and that depends a little bit different situation can be. But through December, we feel much better the prices will stay same or a little close to the pricing which we have now.

我認為天然氣價格比去年同期大幅下降，交易價格接近 600 萬至 700 萬美元。現在大約是 400 萬美元到 300 萬美元或更小。突然之間，它對損益產生了重大影響，因為這是我們的第二大支出。所以這肯定是有幫助的，我們相信這種情況至少在今年會持續下去。自然價格將繼續保持不變或稍好一些，但我們無法預測冬季一月、二月、三月會發生什麼，這取決於情況可能會有所不同。但到了 12 月，我們感覺價格會保持不變或稍微接近我們現在的價格，情況會好得多。

Have you thought about potentially hedging this price and locking in these prices for the future?

您是否考慮過對沖此價格並鎖定未來的價格？

We do consider that there is the lowest price we consider we do buy those prices -- those consumption for our ethanol facilities. We do not leave everything open. But certainly, January, February, March, we look at it, see if it's feasible at this stage or not. But through December, we have purchased some of those natural gas throughout the year.

我們確實認為，我們確實購買了這些價格——我們的乙醇設施的消耗量，這是我們認為的最低價格。我們不會讓一切都開放。但當然，一月、二月、三月，我們會看看，看看現階段是否可行。但到了 12 月，我們全年都購買了一些天然氣。

Okay. Sounds good. And then can you talk about demand for ethanol globally, which countries are demanding it more?

好的。聽起來不錯。然後您能談談全球對乙醇的需求嗎？哪些國家的需求更高？

I think the ethanol demand is basically continuously Canada is on the top of the list. We have seen the last year -- last month, the Netherlands and U.K., South Korea and through. These are the top 5 countries, which is importing from U.S.. But certainly, the demand ethanol export has dropped, as I mentioned previously.

我認為乙醇需求基本上是連續的，加拿大位居榜首。我們已經看到了去年——上個月，荷蘭、英國、韓國的情況。這些是從美國進口的前 5 個國家。但正如我之前提到的，乙醇出口需求肯定有所下降。

Our next question comes from David Locke with Old Namit Investments.

我們的下一個問題來自 Old Namit Investments 的 David Locke。

Could I ask a quick question about just sort of what do you guys think the cost of new capacity in the industry is in terms of, call it, dollar-per-gallon of throughput. And then related to that, since it doesn't seem like there's any assets trading in the business right now. And you guys have said that you haven't found anything that you've been able to buy. What sort of the ask in terms of what holders of assets want on that same kind of metric?

我可以問一個簡單的問題，你們認為該行業新產能的成本是多少，稱之為每加侖吞吐量美元。與此相關的是，因為目前該業務似乎沒有任何資產交易。你們說你們還沒有找到任何可以買到的東西。資產持有者對同樣類型的指標有何要求？

The cost to build would probably be in the [$2.5 to $3 a gallon], but that's just off the cuff estimate. It depends on the project. And we have not -- I would think it would cost somewhere in that level to buy a plant if there was even one for sale. I don't -- the advantage of buying a plant versus building one. And I don't know if anyone building one at that price.

建造成本可能在[每加侖 2.5 至 3 美元]，但這只是即興估計。這取決於項目。而且我們還沒有——我認為購買一株植物的成本也會達到這個水平，即使有一株植物可供出售。我不知道購買工廠與建造工廠相比的優勢。我不知道是否有人以這個價格建造一個。

The big advantage is that you could be in operation pretty much right away and take advantage, whether it's through a pipeline or whether it's through your own carbon capture project, but you could be a business right away to get 45Z credits. So there's a big advantage if there was something for sale, but in all honesty, everyone in the industry knows all about this. There's no secrets in the prices. If you were to find something, the price would be pretty high.

最大的優勢是，您幾乎可以立即投入運營並利用，無論是通過管道還是通過您自己的碳捕獲項目，但您可以立即成為一家企業以獲得 45Z 信用額。因此，如果有東西可供出售，那就有很大的優勢，但說實話，業內的每個人都知道這一點。價格沒有什麼秘密。如果你要找到一些東西，價格會相當高。

And in terms of like brownfield expansion, like along the, along the lines of what you guys are doing moving 1 plant from 150 million gallon to 200 million gallon. Is that a lot less? Or is that sort of similarly high to that $2 kind of range?

就棕地擴張而言，就像你們正在做的那樣，將一家工廠從 1.5 億加侖轉移到 2 億加侖。是不是少了很多？或者這個範圍是否與 2 美元的範圍類似？

It's certainly -- it certainly is less than $2 range because you have already a lot of equipment and other loading facility is already there and so many other facilities already exist. So it certainly is less than $2.

當然，它的價格肯定低於 2 美元，因為您已經擁有大量設備，並且其他裝載設施已經存在，而且許多其他設施也已經存在。所以它肯定低於 2 美元。

Okay. And on an unrelated topic, can you guys spend a couple of seconds reflecting on any opportunities in an ethanol to sustainable air fuel if there's anything that you guys might do there at some point or in general, just if sustainable air fuel might sort of soak up some ethanol capacity going forward?

好的。在一個不相關的話題上，你們能花幾秒鍾思考乙醇到可持續空氣燃料的任何機會嗎？如果你們在某個時候或一般情況下可能會做些什麼，就像可持續空氣燃料可能會浸泡一樣未來會增加一些乙醇產能嗎？

Yes, I think that that's the one of the other reason which, as you can see, we have expanded our ethanol facility not only to take advantage of 45Z. And then in future, if we have to pivot, we can certainly pivot to SAF. And because every 2-gallon of ethanol produced approximately 1 gallon of SAF. So we have -- we have discussion with several other companies who are really believe they have technologies and they can convert the ethanol to SAF.

是的，我認為這是我們擴建乙醇工廠的另一個原因之一，不僅僅是為了利用 45Z。未來，如果我們必須轉向，我們當然可以轉向 SAF。因為每 2 加侖乙醇產生大約 1 加侖 SAF。因此，我們與其他幾家公司進行了討論，這些公司確實相信自己擁有技術並且可以將乙醇轉化為 SAF。

So we have in discussions with those. We are certainly try to make sure what exactly is in the market. So that way, if we decided to pivot at the later stage, we certainly will be pivot to SAF. But there is no proven technologies at this time, which can we feel comfortable and we'll let other people to experiment. And once we know this is successful, we certainly will get into it.

所以我們與這些人進行了討論。我們當然會盡力確定市場上到底有什麼。這樣，如果我們決定在後期轉向，我們肯定會轉向SAF。但目前還沒有成熟的技術，我們可以放心，我們會讓其他人去嘗試。一旦我們知道這是成功的，我們肯定會參與其中。

I remind we have an old saying pioneers to take the arrows, and we're not the pioneers. We'll watch and see who's successful at it. And we think someone will be successful, and then we'll have the ethanol and possibly get into that business will be one of the largest producers of ethanol and we don't -- we believe that it will take ethanol to make to make the fuel. So we'll be ready if someone is ever successful with the technology, we'll see what happens.

我想起我們有句老話說，先鋒拿箭，而我們不是先鋒。我們將拭目以待，看看誰能成功。我們認為有人會成功，然後我們將擁有乙醇，並可能進入該行業，成為最大的乙醇生產商之一，但我們沒有——我們相信，將需要乙醇來製造燃料。因此，如果有人成功利用這項技術，我們將做好準備，看看會發生什麼。

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

羅斯先生，目前沒有其他問題。請繼續您的演講或結束語。

No, I just want to thank everyone for listening, and we hope you'll listen and be with us next quarter. Thank you. Bye.

不，我只是想感謝大家的傾聽，我們希望您能傾聽並在下個季度與我們在一起。謝謝。再見。

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.

今天的電話會議到此結束。我們感謝您的參與，並請您斷開線路。祝大家有個美好的一天。