REX American Resources Corp (REX) 2023 Q3 法說會逐字稿

Greetings, and welcome to the REX American Resources fiscal 2023 third 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 財年第三季電話會議。 （操作員指示）我現在將會議轉交給財務長 Doug Bruggeman 先生。請繼續。

Good morning, and thank you for joining REX American Resources fiscal 2023 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. 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.

早安，感謝您參加 REX American Resources 2023 財年第三季電話會議。我們將立即進行演示和評論以及問答環節。但首先我將回顧安全港披露。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。

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. Rex American Resources assumes no obligation to publicly update or revise any forward-looking statements.

此類前瞻性陳述反映了公司目前的預期和信念，但並非對未來績效的保證。因此，實際結果可能與預期有重大差異。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。雷克斯美國資源公司不承擔公開更新或修改任何前瞻性聲明的義務。

I have joining me on the call today Stuart Rose, Executive Chairman of the Board; and Zafar Rizvi, Chief Executive Officer. I'll first review our financial performance and then turn the call over to Stuart for his comments. We are very pleased to report these record net income and earnings per share quarter results.

今天我將與我一起參加電話會議，董事會執行主席 Stuart Rose；和執行長紮法爾·裡茲維 (Zafar Rizvi)。我將首先審查我們的財務業績，然後將電話轉給史都華以徵求他的意見。我們非常高興地報告這些創紀錄的淨收入和每股收益季度業績。

Sales for the third quarter increased slightly compared to the prior year. Ethanol sales for the quarter were based upon 73.2 million gallons this year versus 66.3 million gallons last year. The increase in sales volume were offset by lower pricing across all categories, largely reflecting commodity pricing for this time period.

第三季銷售額與去年同期相比略有成長。本季乙醇銷售量基於今年 7,320 萬加侖，而去年為 6,630 萬加侖。銷售量的成長被所有類別的定價下降所抵消，這在很大程度上反映了這一時期的商品定價。

We reported a $30 million increase in third quarter gross profit to $39.3 million this year versus $9.3 million in the prior year as we benefited from lower corn and natural gas pricing over the prior year third quarter. SG&A increased for the third quarter from $5.8 million to $7.6 million primarily due to incentive compensation linked to the large increase in earnings.

我們報告今年第三季毛利增加了 3,000 萬美元，達到 3,930 萬美元，而去年同期為 930 萬美元，因為我們受益於去年第三季玉米和天然氣定價較低。第三季的銷售、管理及行政費用 (SG&A) 從 580 萬美元增加到 760 萬美元，主要是由於與收益大幅增長相關的激勵薪酬。

As mentioned 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 instead of within selling, general, and administrative expense as historically presented in order to improve the comparability of gross profit and SG&A reported. The company has applied a retrospective application of its new accounting policy.

正如第二季度所提到的，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，以提高毛利的可比性和SG&A報告。本公司已追溯採用新會計政策。

This change only impacts cost of goods sold and selling, general, administrative expense, and has no impact on the earnings reported. We had income of $4.7 million from our unconsolidated equity investment in this year's third quarter versus $661,000 in the prior year primarily reflecting improved industry operating conditions for this time period.

此變更僅影響銷售成本和銷售成本、一般管理費用，對報告的收益沒有影響。今年第三季度，我們的未合併股權投資收入為 470 萬美元，而去年同期為 661,000 美元，主要反映了這段期間行業經營狀況的改善。

We reported interest and other income of $4.9 million versus $2 million in the prior year. The increase primarily reflects increased interest rates as well as $862,000 from COVID relief grants received from the USDA during this quarter. Income before income taxes and non-controlling interest was $41.3 million for the third quarter compared with $6.1 million in the comparable year ago period. We reported a tax provision of $9.6 million versus a provision of $1.2 million in the prior year.

我們報告的利息和其他收入為 490 萬美元，而前一年為 200 萬美元。這一增長主要反映了利率的增加以及本季度從美國農業部收到的 862,000 美元的新冠疫情救助補助金。第三季所得稅和非控制權益前收入為 4,130 萬美元，去年同期為 610 萬美元。我們報告的稅收準備金為 960 萬美元，而前一年的稅收準備金為 120 萬美元。

These factors led to net income attributable to REX shareholders of $26.1 million for this year versus $3.2 million in the prior year's third quarter. Net income per share attributable to REX shareholders was an all-time record, $1.49 for this year's third quarter versus $0.18 in the prior year. Stuart, and I'll turn the call over to you.

這些因素導致今年 REX 股東應佔淨利潤為 2,610 萬美元，而去年第三季為 320 萬美元。歸屬於 REX 股東的每股淨利創歷史新高，今年第三季為 1.49 美元，去年同期為 0.18 美元。斯圖爾特，我會把電話轉給你。

Thank you, Doug. Going forward, the business has continued to be strong and we expect our fourth quarter to be significantly better than last year's corresponding quarter. We're working hard on our carbon capture project and also are increasing the capacity of our One Earth plan. Zafar will discuss the ethanol business and carbon capture business in his segment.

謝謝你，道格。展望未來，該業務將持續強勁，我們預計第四季將明顯優於去年同期。我們正在努力進行碳捕獲項目，並提高「同一個地球」計畫的容量。紮法爾將在他的部門討論乙醇業務和碳捕獲業務。

We have cash of $332 million of consolidated cash on our balance sheet of $332 million. We're earning interest on that, which should be significantly better or we hope it to be significantly better than last year. The ethanol plants expansion will use some of that cash.

我們的資產負債表上有 3.32 億美元的現金，綜合現金為 3.32 億美元。我們正在賺取利息，這應該明顯好於去年，或者我們希望它比去年好得多。乙醇工廠的擴建將使用其中的部分現金。

The carbon capture project will also use some of that cash. Again, Zafar will discuss this on his part of the call. We're always looking for other ethanol, carbon capture businesses, and other entities that could benefit from our expertise. So far, we have nothing imminent on the acquisition front. We have our buyback still available. We buyback on dips and currently we are not purchasing any shares.

碳捕獲項目也將使用其中的部分現金。紮法爾將在電話會議中再次討論這個問題。我們一直在尋找其他乙醇、碳捕獲業務和其他可以從我們的專業知識中受益的實體。到目前為止，我們在收購方面還沒有任何迫在眉睫的事情。我們仍然可以回購。我們逢低迴購，目前我們不買任何股票。

I'll now turn the conference call over to Zafar Rizvi.

我現在將電話會議轉給紮法爾·裡茲維 (Zafar Rizvi)。

Thank you, Stuart. Good morning, and thank you for joining us today for the third quarter earnings call. As Stuart and Doug previously mentioned, our team successfully capitalize the opportunity in the commodity market and was able to achieve the best result in the history of the company. We have seen some decline in the [crush] margin in the fourth quarter compared to the third quarter.

謝謝你，斯圖爾特。早安，感謝您今天參加我們的第三季財報電話會議。正如斯圖爾特和道格之前提到的，我們的團隊成功地利用了商品市場的機會，並取得了公司歷史上最好的成績。與第三季相比，我們看到第四季的[壓榨]利潤率有所下降。

But we believe we're still -- be able to achieve significantly better result in the -- in comparison to last year's fourth quarter. According to the EIA and November 29 report, ethanol stock and production dropped during the week. We have also seen natural gas price drop considerably, which has positive impact on our financial results. The November [29] 2023 USDA report shows an expected output of 15.23 billion bushels of corn, second highest on the record and 174.9 bushel per acre yield for the year 2023, '24.

但我們相信，與去年第四季相比，我們仍然能夠取得明顯更好的結果。根據 EIA 和 11 月 29 日的報告，本週乙醇庫存和產量均下降。我們也看到天然氣價格大幅下降，這對我們的財務表現產生了正面影響。 2023 年 11 月 [29] 美國農業部報告顯示，預計 2023 年玉米產量為 152.3 億蒲式耳，創歷史第二高，2023 年每英畝產量為 174.9 蒲式耳，'24。

We are pleased that corn yield in Marion, South Dakota this year is estimated at 152 bushels per acre compared to 132 bushels last year. As you remember that we have the last couple of years drought in Marion in South Dakota area. Also approximately 580,000 acres, 12% more acres of corn were planted this crop year (technical difficulty) Gibson City, Illinois are less stable at 203 bushels per acre compared to 214 bushels per acre last year.

我們很高興南達科他州馬里昂今年的玉米產量估計為每英畝 152 蒲式耳，而去年為每英畝 132 蒲式耳。如你所知，南達科他州馬里恩地區過去幾年遭遇乾旱。此外，本作物年玉米種植面積約為 580,000 英畝，增加了 12%（技術難度）。與去年的每英畝 214 蒲式耳相比，伊利諾伊州吉布森市的產量不太穩定，為每英畝 203 蒲式耳。

But almost 400,000 more acres were planted and an increase of 4% were planted this year compared to last year. Looking ahead, the drop in the ethanol and DDG export could negatively affect future result if this continue throughout the next year. Ethanol export through September 2023 were for approximately 1 billion gallons compared to 1.1 billion gallons in 2022 during the same period.

但今年的種植面積比去年增加了近40萬英畝，增加了4%。展望未來，如果乙醇和DDG出口的下降持續到明年，可能會對未來的業績產生負面影響。截至 2023 年 9 月，乙醇出口量約為 10 億加侖，而 2022 年同期為 11 億加侖。

DDG export through September 2023 were approximately 8 million metric tons compared to approximately 8.5 million metric tons, a decrease of approximately 428,000 metric tons compared to the same period 2022. Considering all these factors, we still believe our fourth quarter is expected to produce much better results compared to the same quarter last year as I mentioned previously.

截至 2023 年 9 月，DDG 出口量約為 800 萬公噸，較 2022 年同期的約 850 萬公噸減少約 428,000 公噸。考慮到所有這些因素，我們仍然相信第四季度的產量預計會好得多正如我之前提到的，與去年同期相比的結果。

Let me give you some update about carbon, our carbon project. As I mentioned in our previous calls, we believe our carbon capture and sequestration project will further advance our sustainability goals and have a financial impact that will improve the company's performance for our shareholders. We have budgeted approximately $165 million to build a carbon capture comparison and storage facility, expand the one at -- energy plant, ultimately 200 million gallons annually and undertake other projects related to the reducing carbon intensity.

讓我向您介紹一下我們的碳專案的最新情況。正如我在先前的電話會議中提到的，我們相信我們的碳捕獲和封存項目將進一步推進我們的永續發展目標，並產生財務影響，從而改善公司股東的表現。我們已預算約 1.65 億美元，用於建造碳捕獲比較和儲存設施，擴大能源工廠，最終每年生產 2 億加侖，並開展與降低碳強度相關的其他項目。

The construction of the capture and compression facility has started and long-lead items have been ordered and all modular compression equipment for the facility is scheduled to be delivered by early next year. The construction of the facility is expected to be completed by the end of second quarter, at which time testing of the facility will begin.

捕獲和壓縮設施的建設已經開始，長期項目已被訂購，該設施的所有模組化壓縮設備計劃於明年初交付。該設施的建設預計將於第二季末完成，屆時將開始對該設施進行測試。

We continue to complete the paperwork of different government agencies, while we wait the EPA approval of the Class VI permit for carbon injection and for the Illinois Commerce Commission's approval to construct the 7.2 miles carbon pipeline. All this [pro formas] and approvals depend on several local, state, federal agencies. Unfortunately, we cannot predict when we will receive these permits from these various agencies.

我們繼續完成不同政府機構的文書工作，同時等待 EPA 批准碳注入 VI 級許可證以及伊利諾伊州商業委員會批准建造 7.2 英里的碳管道。所有這些[形式]和批准取決於幾個地方、州、聯邦機構。不幸的是，我們無法預測何時會收到這些不同機構的許可。

In other updates, two other carbon pipeline companies recently withdrew their pipeline application. Big River Resources have entered into an agreement with Navigator which withdrew their carbon pipeline application. We are pleased about the big milestone we have reached so far and hope different government agency will complete their approval early next year.

在其他更新中，另外兩家碳管道公司最近撤回了管道申請。 Big River Resources 已與 Navigator 達成協議，撤回其碳管道申請。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明年初完成批准。

We will also continue to evaluate other projects that would improve our energy efficiencies, reduce carbon intensity. If we're successfully achieve our goals, we will be prepared to provide low carbon ethanol and byproducts with a social impact of reducing carbon in the atmosphere and a financial impact that improves the company's performance for our shareholders.

我們也將持續評估其他能夠提高能源效率、降低碳強度的項目。如果我們成功實現我們的目標，我們將準備好提供低碳乙醇和副產品，從而減少大氣中的碳排放，並產生財務影響，為股東提高公司業績。

In summary, we are pleased to announce the most profitable quarter in our history, and we believe our fourth quarter is expected to be produced much better results compared to the same period last year. We continue to make progress on our carbon sequestration projects and a plan to increase ethanol production of (technical difficulty) energy ultimately to 200 million gallons to maximize 45Z tax credit benefits.

總而言之，我們很高興地宣布我們歷史上利潤最高的季度，我們相信第四季度的業績預計將比去年同期好得多。我們繼續在碳封存項目和將（技術難度）能源乙醇產量最終增加到 2 億加侖的計劃上取得進展，以最大限度地提高 45Z 稅收抵免收益。

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

再一次，如果沒有同事的辛勤工作和奉獻，我們就無法實現這些里程碑。我們非常讚賞他們為取得這些正面成果所做的努力。我將請 Stuart Rose 發言以徵求更多意見。史都華？

In conclusion, we completed the best quarter in our 39 year history as a public company. We drastically outperformed the industry. As Elon Musk said, we don't -- as he said yesterday, for people who are listening to his conference call, he has no patents or his patents are all open patents.

總而言之，我們完成了上市公司 39 年歷史上最好的季度業績。我們的表現遠遠超過了業界。正如馬斯克所說，我們沒有——正如他昨天所說，對於正在聽他電話會議的人來說，他沒有專利，或者他的專利都是開放專利。

We have no super patent or anything like that. But we better execute than our competitors and our people are the real reason for that. We feel we have the best people in the industry. We feel that they know what they're doing. In carbon capture, for example, everyone else has these big pie in the sky projects. We have focused on a project that we believe is very doable.

我們沒有超級專利或類似的東西。但我們比競爭對手執行得更好，而我們的員工才是真正的原因。我們認為我們擁有業內最優秀的人才。我們覺得他們知道自己在做什麼。例如，在碳捕獲領域，其他人都有這些天上掉餡餅的物品。我們專注於一個我們認為非常可行的專案。

And at the moment, I believe we're in the lead in the ethanol business in our carbon capture project. It's ahead of any other carbon capture project that I know of in the ethanol business, other than our ADM which was done long ago. So we're again going to show, we believe that execution is way more important than anything else. We feel we're better at that than anyone else.

目前，我相信我們在碳捕獲項目的乙醇業務中處於領先地位。它領先於我所知道的乙醇行業中的任何其他碳捕獲項目，除了我們很久以前完成的 ADM 項目。因此，我們將再次表明，我們相信執行力比其他任何事情都重要得多。我們覺得我們比其他人更擅長這一點。

So I said earlier, we know we have good plants. We know we have good locations. But the most important thing we have is good people and our people are just terrific, and they get all the credit for this quarter. It's just a terrific job, and they deserve it.

所以我之前說過，我們知道我們有好的植物。我們知道我們擁有良好的地理位置。但我們擁有的最重要的是優秀的員工，我們的員工非常棒，他們獲得了本季的所有榮譽。這是一項了不起的工作，他們應得的。

I'll now leave the forum open for questions.

現在我將讓論壇開放供大家提問。

(Operator Instructions) Jordan Levy, Truist Securities.

（操作員指示）Jordan Levy，Truist 證券公司。

Hey, guys, it's Henry on for Jordan here. Congrats for (technical difficulty) the quarter. To start off, I know you mentioned that the 2Q date for -- I was wondering if you have any more color on some of the different benchmarks, both on the construction side and then from the EPA around the CCS bill that we should be looking for over the next 12 to 18 months?

嘿，夥計們，亨利代替喬丹出場。恭喜本季（技術難度）。首先，我知道您提到了第二季度的日期——我想知道您是否對一些不同的基準有更多的了解，無論是在施工方面，還是來自 EPA 圍繞我們應該關注的 CCS 法案在接下來的12 到18 個月內？

I think that, Henry, as far as concern about the EPA, I think is under technical review. They have to -- and we have no idea how long that technical review will take. But as far as construction of the facility, it's already started, as I mentioned previously, and the modular unit, which will be arriving in February. And we believe that our facility will be up, completed by July 31 or earlier.

亨利，我認為，就美國環保署的擔憂而言，我認為正在接受技術審查。他們必須——而且我們不知道技術審查需要多長時間。但就設施的建設而言，正如我之前提到的，它已經開始，模組化單元將於二月抵達。我們相信我們的設施將在 7 月 31 日或更早之前完工。

(multiple speakers) July 31, it may take a little longer because we still might be waiting for permits. That (multiple speakers)

（多名發言者）7 月 31 日，可能需要更長的時間，因為我們可能仍在等待許可。那（多個發言者）

I think the construction will be completed. The construction of the facility will be completed, but we cannot operate unless we receive the EPA permit and a pipeline permit, which I mentioned earlier. But as far as concern -- the compression facility will be completed.

我認為施工將會完成。該設施的建設將會完成，但除非我們收到我之前提到的美國環保署許可證和管道許可證，否則我們無法運作。但就目前而言，壓縮設施將會完工。

Thank you. And then just looking ahead to next year, how are you guys looking at the ethanol landscape shaping up compared to this year? Have you guys had -- having conversations with any of the nearby operators on potential carbon [optic] given kind of where you're at? Your advanced timeline for your current carbon capture projects?

謝謝。然後展望明年，與今年相比，你們如何看待乙醇格局的變化？鑑於你們所處的位置，你們是否曾與附近的任何業者就潛在的碳[光學]進行過對話？您目前碳捕獲專案的提前時間表？

I'm sorry, could you repeat that question again? I'm not sure what exactly you were asking, please.

抱歉，您能再重複一次這個問題嗎？我不確定你到底想問什麼，拜託。

Just a quick one on the ethanol landscape, how you're seeing that shaping up for next year? And then just anything you have on -- any conversations if you have begun having them with nearby operators for potential carbon optic given where you're at with the CCS buildout?

簡單介紹一下乙醇領域，您對明年的情況有何看法？然後就是你所擁有的一切——考慮到你在 CCS 擴建方面的情況，如果你已經開始與附近的運營商就潛在的碳光學進行對話？

I think as far as concern ethanol, looking forward, as I mentioned, that we are in a commodity business. I think it's very hard to predict more than -- even a couple of months or three months. So at this stage, I really cannot predict what happened with the commodity market and is change every single day or every month. And when we're going to see any opportunity, we will be there to materialize that.

我認為就乙醇而言，正如我所提到的，我們從事的是大宗商品業務。我認為很難預測超過——甚至幾個月或三個月。所以現階段我真的無法預測商品市場會發生什麼，每天或每個月都在變化。當我們看到任何機會時，我們將在那裡實現它。

So I really cannot predict what happen next year. But I can -- as I mentioned, the fourth quarter, certainly we believe that there will be -- it will be much better than last year same fourth quarter. But as far as concerned about the carbon, I think once we complete of facilities, that will be probably by the end of June 2025.

所以我真的無法預測明年會發生什麼事。但我可以 - 正如我所提到的，我們當然相信第四季度將會 - 它會比去年第四季好得多。但就碳排放而言，我認為一旦我們完成設施，可能會在 2025 年 6 月底之前完成。

At that time, we will see exactly that if there is other sources of the carbon is available from anybody, as otherwise our expansion of the ethanol facility will be -- still will be a very feasible project with using 45Z and even 45Q -- return on investment is much higher than we expect.

到那時，我們將確切地看到，是否有其他碳來源可以從任何人那裡獲得，否則我們的乙醇設施擴建將 - 仍然將是一個使用 45Z 甚至 45Q 的非常可行的項目 - 返回投資遠高於我們的預期。

Thank you.

謝謝。

One thing on your question. I think you should -- you'd probably realize if you've been following our stock for a long time. Zafar and his team have proven quarter after quarter after quarter that they know the commodity business and are really good at it. Other people with all their futures contracts and a big floors of commodity traders and everything, they have drastically underperformed what Zafar and his team have done.

關於你的問題有一件事。我認為你應該——如果你長期關注我們的股票，你可能會意識到。紮法爾和他的團隊一個又一個季度地證明，他們了解商品業務並且非常擅長。其他擁有所有期貨合約和大量商品交易員以及一切的人，他們的表現遠低於紮法爾和他的團隊的表現。

And there's no reason -- if it's happened in the past, there's no guarantees that's going to happen in the future. But when you look at that team and what they have done, I think you have to say that we know this business and that we're better at -- again, as I said in my call, better executing than everyone else.

而且沒有理由──如果過去發生過，就不能保證將來也會發生。但是，當你看到那個團隊以及他們所做的事情時，我想你不得不說我們了解這個業務，而且我們更擅長——正如我在電話會議中所說的那樣，比其他人更好地執行。

And again, on the carbon capture, we hope to have it completed with permits by the end of next year, which would be, with 45Z, a huge, huge addition potentially to our earnings per share. So we'll see what happens. And that's the thing, that we are putting, and Zafar and his team is putting in the growth area the most efforts into. And again, if they do that like they've done ethanol business, we're in really good shape.

再說一次，在碳捕獲方面，我們希望在明年年底前獲得許可，完成這項工作，如果有了 45Z，這將是我們每股收益的巨大潛力。所以我們會看看會發生什麼。這就是我們正在投入的事情，紮法爾和他的團隊正在成長領域中投入最多的努力。再說一次，如果他們像做乙醇業務一樣這樣做，我們的狀況就非常好。

Yeah. And if I add to that, since we are increasing our production to 200 million gallons, so every reduction from 0.50 to reduction every gallon, is $0.02 a gallon. So if we -- and the carbon sequestration is approximately somewhere $0.30 to $0.35 -- 30 to 35 points. So we are able to reduce our carbon footprint, our intensity, and as we are working on several other project. So we can generate with a 200 million gallon ethanol facility for over three years, somewhere $500 to $600 million tax credit.

是的。如果我補充一點，由於我們將產量增加到 2 億加侖，因此每加侖從 0.50 到減少每加侖的價格為 0.02 美元。因此，如果我們——碳封存量約為 0.30 至 0.35 美元——30 至 35 個點。因此，我們能夠減少碳足跡和強度，並且我們正在進行其他幾個項目。因此，我們可以使用 2 億加侖的乙醇設施生產三年以上的乙醇，稅收抵免約為 5 億至 6 億美元。

Again, that would be the most we can generate. So that's -- right. We don't want people putting that in their numbers, but that's what we're working so hard to get to. And if we even get to half of that, that's all the increase in earnings per share. So we have a big bogey out there and we're going to work hard to get us as much of it as we can.

同樣，這將是我們所能產生的最多的。所以這是——正確的。我們不希望人們將其納入他們的數字中，但這正是我們正在努力實現的目標。如果我們甚至達到一半，那就是每股收益的全部成長。所以我們有一個很大的柏忌，我們將努力工作以盡可能多地獲得它。

Yeah, yeah. That's the reason we are allocating $165 million to -- it's a major investment and certainly the risk. But we believe the return is much better and much higher.

是啊是啊。這就是我們撥款 1.65 億美元的原因——這是一項重大投資，當然也存在風險。但我們相信回報會更好、更高。

Thank you, guys.

感謝你們。

Chris Sakai, Singular Research.

克里斯·酒井，奇異研究公司。

Hi, good morning. Just a question on where are you seeing the most demand for ethanol?

早安.只是一個問題，您認為哪裡對乙醇的需求最大？

Where we see the most demand in ethanol in -- you mean the export side?

我們看到乙醇需求最大的地方是──你指的是出口方面？

Right.

正確的。

I think mostly -- right now, we see that Canada and we have recently see the United Kingdom, Netherlands, South Korea, Colombia. So those are the top five. We have seen some India also. So certainly it's a -- a lot of these countries are importing. So Canada is always on number one.

我認為現在主要是加拿大，最近我們看到了英國、荷蘭、韓國、哥倫比亞。這些是前五名。我們也看到了一些印度。所以當然，很多國家都在進口。所以加拿大一直穩居第一名。

Okay, great. How are you guys thinking the price of corn and dry distillers grain and modified distillers grain heading into the next quarter?

好的，太好了。你們如何看待下一季玉米、乾酒糟和改良酒糟的價格？

I think the corn is, generally speaking, as you can see, that's trading about $4 -- yesterday, it was $4.49 and today some increase. So I think that, as I mentioned previously, in the South Dakota area, certainly we have seen some minus basis.

我認為，一般來說，正如你所看到的，玉米的交易價格約為 4 美元——昨天是 4.49 美元，今天有所上漲。因此，我認為，正如我之前提到的，在南達科他州地區，我們肯定看到了一些負基礎。

And we have seen some basis in overall, in Illinois has gone up a little bit. We have seen basis in Indianapolis and some other part where it was not as good production as it's compared to last year is -- the last basis. But otherwise, most of the area is the minus basis.

我們看到總體而言，伊利諾伊州的一些基礎有所上升。我們看到印第安納波利斯和其他一些地區的基礎產量不如去年——最後一個基礎。但除此之外，大部分面積都是負基數。

And what about the price of natural gas as we head into the winter?

當我們進入冬季時，天然氣價格又如何呢？

The natural gas price has considerably dropped. As I mentioned, that we have seen that is less than a $5 for January, February, and we have seen that about for March as low as $2.56 -- $2.67. So that will be a major impact, as I've mentioned that in my previous prepared remarks, that we have seen the drop in natural gas pricing.

天然氣價格大幅下降。正如我所提到的，我們發現 1 月、2 月的價格低於 5 美元，而 3 月的價格低至 2.56 至 2.67 美元。因此，這將是一個重大影響，正如我在之前準備的演講中提到的，我們已經看到天然氣價格的下降。

Okay, great. Thanks.

好的，太好了。謝謝。

David Locke, Old Mammoth Investments.

大衛洛克，老猛獁投資公司。

Hi there, guys. How are you doing?

嗨，夥計們。你好嗎？

Good.

好的。

Hey, first off, I'd really like to thank you guys for taking the questions. There are some teams out there that seem afraid to take questions from their investors in a public forum. So thanks for your time and your candor in doing this.

嘿，首先，我真的很感謝你們提出問題。有些團隊似乎不敢在公共論壇上回答投資人的問題。感謝您花時間和坦誠做這件事。

Thank you. Thank you for asking questions.

謝謝。感謝您提出問題。

My first question is the industry overall has been beset by a ton of operational problems the last few months, explosions, fires, et cetera. To what extent has that contributed to the good financial margin environment for the last half year or so? And how have you guys managed to sidestep all of that? And relatedly, how old are your plants relative to industry average?

我的第一個問題是，過去幾個月整個產業一直受到大量營運問題的困擾，如爆炸、火災等。這在多大程度上促成了過去半年左右良好的財務利潤環境？你們是如何設法避開這一切的？與此相關的是，您的工廠相對於行業平均水平有多久了？

We have some of the newest plants in the industry. They are under, I believe, under 10 years old. Some of these older plants just should be shut down, to be honest with you. The fires and all that stuff maybe helped us a little bit. I don't know.

我們擁有一些業內最新的工廠。我相信他們還不到 10 歲。老實說，一些老工廠應該被關閉。火災和所有這些事情也許對我們有一點幫助。我不知道。

They had commitments where they had to buy -- I'm not sure of the situation where they had to buy product on the open market on the stock market. That certainly if they did that would help. But I think you have not -- and we have we have a number of plants. Some we only own a small part of. But we have many plants and these are all newer plants.

他們有必須購買的承諾——我不確定他們必須在股票市場的公開市場上購買產品的情況。如果他們這樣做的話肯定會有幫助。但我認為你們還沒有——而我們有，我們有很多工廠。有些我們只擁有一小部分。但我們有很多植物，而且都是較新的植物。

In the beginning, we made a decision to go with the best builder and the best plants. And I don't know of any -- I don't know of any operational problems at these plants. They're just better built with service. Semiannually, we do an extensive service on these things and they're just state-of-the-art better plants. That's all I can say.

一開始，我們決定選擇最好的建築商和最好的工廠。我不知道這些工廠有任何營運問題。它們只是透過服務而變得更好。我們每半年對這些東西進行一次廣泛的服務，它們只是最先進的更好的工廠。我只能說這麼多。

They're Fagen ICM plants. When you see a 100-million gallon Fagen ICM plants, very seldom do you see anything materially go wrong with those plants. There can always be a tornado or something, but the plants themselves are built terrifically. And in our case, we take extremely good care of those plants.

它們是 Fagen ICM 工廠。當您看到 1 億加侖的 Fagen ICM 工廠時，您很少會發現這些工廠出現任何重大問題。龍捲風之類的事情隨時可能發生，但植物本身建造得非常好。就我們而言，我們非常照顧這些植物。

Yeah, yeah. I will add to that is I think the safety is our number one priority. We always review that every month for safety procedures. God forgive, anything can happen to anybody. But we are making sure all the safety procedures are followed and drills are happening and very closely monitored -- the safety thing. And as Stuart mentioned, there's a couple of plants which happened that thing.

是啊是啊。我要補充的是，我認為安全是我們的第一要務。我們始終每月都會審查安全程序。上帝寬恕，任何事都可能發生在任何人身上。但我們正在確保所有安全程序都得到遵守，演習正在進行並受到非常密切的監控——安全問題。正如斯圖爾特所提到的，有幾家工廠發生了這種事情。

I think if you ring -- there's one plant in happened in South Dakota, that was about only 70 million gallon plant, that was shut down for a while. ADM plant was shut down for maybe a couple of weeks or more. And so I think there is -- Stuart has mentioned, that there is maybe a minor impact. But I think the overall, if you look at the commodity market, that is also makes a difference when you have in October our second -- on corn we're trading $4.88 and ethanol was $2.36.

我想如果你打電話——南達科他州有一家工廠，產能大約只有 7000 萬加侖，已經關閉了一段時間。 ADM 工廠可能關閉了幾週或更長時間。所以我認為——史都華已經提到過，可能會有輕微的影響。但我認為總體而言，如果你看看大宗商品市場，當你在 10 月進行第二次交易時，這也會產生影響 - 玉米交易價格為 4.88 美元，乙醇交易價格為 2.36 美元。

So there is plenty margin at that time to look at it, to make sure that this is the time to lock in and moving forward. So I think is, as Stuart mentioned, it's all depends on when and what time you execute your profit and consider that this is good enough and let's lock in and move on.

因此，當時有足夠的餘地來審視它，以確保現在是鎖定並前進的時候。所以我認為，正如史都華所提到的，這完全取決於你何時何地執行你的利潤，並認為這已經足夠好了，讓我們鎖定並繼續前進。

Let me add (multiple speakers)

讓我補充一下（多個發言者）

(multiple speakers) I'm sorry. We believe strongly we have the best commodity trading team. Not just the best plants, but I really believe we have the best commodity trading team lead by Zafar in the ethanol business.

（多個發言者）對不起。我們堅信我們擁有最好的商品交易團隊。不僅僅是最好的工廠，而且我真的相信我們擁有紮法爾領導的乙醇業務中最好的商品交易團隊。

Our consolidated plants were built between 2007 and 2009, just to add that on.

我們的綜合工廠建於 2007 年至 2009 年之間，只是為了補充這一點。

Yeah. (multiple speakers)

是的。 （多個發言者）

(multiple speakers) Sorry for one more. Yes. Thank you, Doug.

（多位發言者） 抱歉還有一位。是的。謝謝你，道格。

So as you guys continue to scour the M&A market but not find anything that's worthwhile, are you looking for plants that look like the ones that you have, or are there dumpster diving opportunities for you to bring your management expertise and maybe fix up one of these older ones?

因此，當您繼續搜尋併購市場但沒有找到任何有價值的東西時，您是否正在尋找與您擁有的工廠相似的工廠，或者是否有垃圾箱潛水機會讓您帶來管理專業知識，也許可以修復其中之一這些老的？

We don't dumpster dive. That won't be us. We're not fix-up artists. I'm not saying that we couldn't do it. But we have come very close to buying plants that are similar to ours, Fagen ICM plants, and that would -- 100 million gallon.

我們不潛水。那不會是我們。我們不是修理藝術家。我並不是說我們做不到。但我們已經非常接近購買與我們的 Fagen ICM 工廠類似的工廠，那就是 1 億加侖。

And for one reason or another, it hasn't worked out, but that would be our preference and that would be what we would look for. Unfortunately, or fortunately, whatever you want to say, [I must insisted that] plant is really, really -- doing really, really well and the price has gone very, very much up on those plants. So I don't see anything coming imminently. But in this industry, you never know what might happen.

由於某種原因，它還沒有成功，但這將是我們的偏好，也是我們所尋求的。不幸的是，或者幸運的是，無論你想說什麼，[我必須堅持認為]植物真的非常非常好，而且這些植物的價格已經上漲了非常非常多。所以我認為不會立即發生任何事情。但在這個行業，你永遠不知道會發生什麼事。

Okay. How do you guys feel generally about the broad supply-demand environment for ethanol right now? I mean, we've been oversupplied for the better part of a decade and a half, it feels like. Although we've had just consistently decent margins all year this year with some really high ones over the summer and early fall. So have we finally managed to make it to balance with a little bit of increased demand and some supply coming offline?

好的。你們對目前乙醇廣泛的供需環境整體有何看法？我的意思是，我們感覺在過去十五年的大部分時間裡一直供過於求。儘管我們今年全年的利潤率一直不錯，其中夏季和初秋的利潤率非常高。那麼，我們最終是否能夠在需求增加和供應中斷的情況下實現平衡？

Go ahead, Stuart, you want to say.

說吧，斯圖爾特，你想說的話。

I was going to say, in my opinion, it's a commodity and you never -- what will happen is if -- there will there be one way or another, we're expanding our plants. There always, if it does continue, this demand will be some -- expansion and then the supply will keep up with it.

我想說的是，在我看來，這是一種商品，而你永遠不會——將會發生的情況是——會有這樣或那樣的方式，我們正在擴大我們的工廠。如果這種情況持續下去，這種需求總是會有所擴張，然後供應就會跟上。

But we have hopes as an industry to -- and it may or may not happen. The government has given a lot of support to it happening, of supplying things like jet fuel. We also would be -- have hopes of being a very, very low carbon fuel, which creates demand for our fuel in addition to what it is now across the country.

但作為一個行業，我們有希望——這可能會發生，也可能不會發生。政府為這起事件的發生提供了許多支持，包括提供航空燃油等物品。我們也希望成為一種非常非常低碳的燃料，除了現在全國各地的燃料之外，這還會創造對我們燃料的需求。

There are more and more pumps [ICM] and (inaudible) ICM, even -- I assume around the country more and more pumps that are greater than 10% ethanol and cars today that are manufactured today can run on 15% ethanol. So that would be a 50% increase and the gas stations make more money on 15% ethanol. So they have incentives. So there's hopes that that will increase demand.

越來越多的泵浦 [ICM] 和（聽不清楚）ICM，甚至 - 我假設全國範圍內越來越多的泵浦使用超過 10% 的乙醇，並且今天製造的汽車可以使用 15% 的乙醇運行。因此，這將增加 50%，加油站可以透過 15% 的乙醇賺更多的錢。所以他們有動力。因此，人們希望這會增加需求。

So to answer your question, it's a commodity business, but a lot of things are moving in that direction.

所以回答你的問題，這是一個大宗商品業務，但很多事情正在朝這個方向發展。

Okay. And then my last question is on the pipeline in Illinois. Do you guys need any eminent domain rulings to make that happen? And it seems like there have been some problems in Iowa recently with that and the clown show that is actually campaigning in Iowa about that whole issue. So I'm just curious what the gaining items are for getting that installed.

好的。我的最後一個問題是關於伊利諾伊州正在醞釀的問題。你們需要任何徵用權裁決才能實現這一點嗎？愛荷華州最近似乎出現了一些問題，而小丑表演實際上正在愛荷華州就整個問題進行競選活動。所以我只是好奇安裝它能獲得什麼好處。

Yeah, I can answer that a little bit. I think if you look at the -- Illinois law is clearly state, regardless if we plan to use it or not eminent domain. But regarding the pipeline, Illinois law clearly state that we can use eminent domain. But as far as our attention, we, at this stage, we do not believe that we have to use eminent domain because we have approximately four miles pipeline to the well number one, and by the time we reach to well number two and three, the last well, it's only 7.2 miles pipeline.

是的，我可以稍微回答一下。我認為，如果你看看伊利諾伊州的法律，無論我們是否計劃使用它或不使用徵用權，都明確規定了這一點。但關於管道，伊利諾伊州法律明確規定我們可以使用徵用權。但就我們而言，現階段我們不認為必須使用徵用權，因為我們有大約四英里的管道通往一號井，當我們到達二號和三號井時，最後一口井，管道只有 7.2 英里。

And so we may have some difficulties. We do not know. But as far as concerned, which we have -- a preliminary indication which we have, we do not believe that we will be using any eminent domain. But the law is still there exist. And in case of -- we have no choice whatsoever that maybe we'll consider. But that's not what our attention is at this stage.

所以我們可能會遇到一些困難。我們不知道。但就我們所掌握的初步跡象而言，我們認為我們不會使用任何徵用權。但法律仍然存在。如果發生這種情況，我們別無選擇，也許我們會考慮。但這不是我們現階段關注的重點。

And keep in mind, as Zafar just said, we're only going four miles, and a lot of that four miles is over land -- farm land where these -- we're helping -- the people that we're dealing with for these four miles are selling their corn to us. And some of them are shareholders, I believe. So they have a big incentive to make this happen because, in both cases, they're better off. Having us do well and they'll do well. And it's been a great partnership for many, many years, as Doug said, since at least 2009.

請記住，正如紮法爾剛才所說，我們只走了四英里，而這四英里的大部分都是在陸地上——農田上，我們正​​在幫助我們正在與之打交道的人們因為這四英里正在向我們出售玉米。我相信，其中有些人是股東。因此，他們有很大的動力去實現這一目標，因為在這兩種情況下，他們的境況都會更好。讓我們做得好，他們也會做得好。正如 Doug 所說，至少從 2009 年開始，多年來雙方一直是良好的合作關係。

So they've done good for us, I believe. I know, we've done good for them. And it's not a -- when you think of these other pipeline in Iowa, they're going hundreds of miles. We're going for miles. So we don't think it's going to be any issue. If it is, Illinois law backs this up. But we don't believe it will be an issue at this time.

所以我相信他們為我們做了好事。我知道，我們為他們做了好事。當你想到愛荷華州的其他管道時，它們會延伸數百英里。我們要走幾英哩。所以我們認為這不會有任何問題。如果是的話，伊利諾伊州法律支持這一點。但我們認為目前這不會成為問題。

Yeah, exactly. And I think that Stuart is exactly right. As you mentioned, the people are going out there to protest, as you know that. That's going to happen. We cannot stop them. That's their opinion. And there certainly is -- same people go almost every state in Illinois, in Iowa, in South Dakota, and that's what the values they think they have, and but as far as we're concerned, we continue to concentrate what we have to provide and what we have to do.

是的，完全正確。我認為史都華是完全正確的。正如你所提到的，正如你所知，人們正在出去抗議。那將會發生。我們無法阻止他們。這是他們的意見。當然，同樣的人幾乎去了伊利諾伊州、愛荷華州、南達科他州的每個州，這就是他們認為自己擁有的價值觀，但就我們而言，我們繼續專注於我們必須做的事情以及我們必須要做的事情。

Okay. Thanks a bunch for the clarification and nuance on that. That's all I've got and thanks for another excellent quarter, and congratulations on kicking everybody's butt.

好的。非常感謝您對此的澄清和細微差別。這就是我所得到的一切，感謝又一個出色的季度，並祝賀你踢了每個人的屁股。

Thanks, sir. Thanks for the questions.

謝謝先生。感謝您的提問。

Mr. Rose, there are no further questions at this time. I will now turn the call back to you.

羅斯先生，目前沒有其他問題。我現在將把電話轉回給您。

We'd like to thank everyone for listening, and we'll look forward to talking to you at the end of the next quarter. Thank you. Bye.

我們要感謝大家的聆聽，我們期待在下個季度末與您交談。謝謝。再見。

Thanks.

謝謝。

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