REX American Resources Corp (REX) 2024 Q3 法說會逐字稿

Good morning, and welcome to the REX American Resources third-quarter 2024 earnings conference call.

早安，歡迎參加 REX 美國資源 2024 年第三季財報電話會議。

As a reminder, today's call is being recorded. (Operator Instructions)

提醒一下，今天的通話正在錄音。 （操作員說明）

I would now like to turn the call over to Mr. Doug Bruggeman, Chief Financial Officer of REX American. Please go ahead.

我現在想將電話轉給 REX American 財務長 Doug Bruggeman 先生。請繼續。

Good morning, and thank you for joining REX American Resources Q3 2024 conference call. With me on our call today are Stuart Rose, REX Executive Chairman; and Zafar Rizvi, the REX CEO.

早安，感謝您參加 REX American Resources 2024 年第三季電話會議。今天與我一起參加電話會議的有 REX 執行主席 Stuart Rose；以及 REX 執行長 Zafar Rizvi。

We'll get to our presentation and comments momentarily, as well as your questions. But first, I will 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 risk and uncertainties within the meeting of the private Securities Litigation Reform Act of 1995.

我們將立即進行演示和評論，以及您的問題。但首先，我將回顧安全港披露。除了歷史事實或當前情況的陳述外，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會議中的風險和不確定性。

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 risk 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.

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 表格中的報告）中進行了描述。

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

REX American Resources 不承擔公開更新或修改任何前瞻性陳述的義務。

I'd now like to turn the call over to our Executive Chairman, Stuart Rose.

我現在想將電話轉給我們的執行主席 Stuart Rose。

Good morning, and thank you again to everyone for joining us. During the third quarter. REX American Resources continued our progress on our three goals for 2024. Setting the company up for success well into the future. As a reminder, these goals were to continue profitable operations, to complete the construction phase of our One Earth Energy carbon capture and compression facility, and to complete the capacity expansion for One Earth Energy ethanol production facility to 175 million gallons per year and move toward the plan further permitting of the facility to 200 million gallons per year.

早安，再次感謝大家加入我們。第三季期間。 REX American Resources 繼續在 2024 年的三個目標上取得進展。提醒一下，這些目標是繼續盈利運營，完成 One Earth Energy 碳捕獲和壓縮設施的建設階段，並完成 One Earth Energy 乙醇生產設施的產能擴張至每年 1.75 億加侖，並朝著該計劃還允許該設施每年生產2 億加侖。

To the first goal we exceeded the mark, the third quarter was REX American Resources' second most profitable quarter in the company's history. Behind only the third quarter of 2023, our net income per share of $1.38 was an improvement of 97% over the second quarter of 2024, principally reflecting better corn pricing. Gross margin improved over the third quarter of 2023 by 1% despite a 21% reduction in product revenue.

我們超越了第一個目標，第三季是 REX American Resources 公司歷史上第二個獲利最多的季度。僅落後 2023 年第三季度，我們的每股淨利潤為 1.38 美元，比 2024 年第二季度增長 97%，主要反映了玉米定價的改善。儘管產品收入減少了 21%，但毛利率較 2023 年第三季提高了 1%。

As we have consistently said, we believe REX's facilities and personnel are among the best in the industry, which they prove quarter after quarter through their attention to detail and awareness of the markets. The focus on lean and efficient operations in our core ethanol business, we believe will serve as a basis for future increases in profit levels. Once our One Earth plan expansion is up and running next year, it is this part of the business that has allowed REX to grow, substantially debt free, maintain strategic freedom, and move forward independently with additive growth projects. As we always do, I want to say thank you to our team for the efforts this quarter and every day.

正如我們一直所說的那樣，我們相信 REX 的設施和人員是業內最好的，他們透過對細節的關注和對市場的了解，每個季度都證明了這一點。我們相信，我們核心乙醇業務對精益高效營運的關注將成為未來利潤水準提高的基礎。一旦我們明年的「同一個地球」計畫擴張啟動並運行，正是這部分業務使 REX 能夠實現成長，基本上無債務，保持戰略自由，並獨立推進附加成長項目。一如既往，我想對我們的團隊在本季和每一天的努力表示感謝。

And the second goal to complete construction of the capture and compression portion of our One Earth Energy CCS project in Gibson City, Illinois. We have substantially realized this goal. We'll let Zafar Rizvi, our CEO, discusses the specifics with regard to the remainder of this project later in the call.

第二個目標是完成伊利諾伊州吉布森市 One Earth Energy CCS 專案的捕獲和壓縮部分的建造。我們已經基本達成了這個目標。我們將讓我們的執行長紮法爾·裡茲維 (Zafar Rizvi) 在稍後的電話會議中討論有關該項目其餘部分的具體細節。

Our third goal was to complete construction of the One Earth ethanol production capacity expansion to 175 million gallons per year to prepare for further permitting and production levels of 200 million gallons per year. Right now, we estimate that the facility is on track for completion in the middle of 2025. Based upon delays in delivery timelines for certain necessary components.

我們的第三個目標是完成 One Earth 乙醇產能擴張至每年 1.75 億加侖的建設，為進一步獲得許可和每年 2 億加侖的生產水準做好準備。目前，我們估計該設施預計將於 2025 年中期竣工。

As you can see, our efforts to support near and long-term growth moving forward successfully. The current time, the fourth quarter continues to be profitable, but trails last year's fourth quarter, which was a historically very strong quarter.

正如您所看到的，我們為支持近期和長期成長所做的努力取得了成功。目前，第四季繼續獲利，但落後於去年第四季度，去年第四季是歷史上非常強勁的季度。

I'd now like to turn things over to our CEO, Zafar Rizvi, to give further updates on our major projects.

現在我想將事情轉交給我們的執行長紮法爾·裡茲維 (Zafar Rizvi)，以提供有關我們主要項目的進一步更新。

Thank you, Stuart. The expansion of our One Earth ethanol facility, 275 million gallons per year of production is estimated to be complete by the middle of 2025. Currently, the electric interconnection from our local utility is moving ahead and should be complete by first quarter of 2025.

謝謝你，斯圖爾特。我們的 One Earth 乙醇工廠的擴建預計將於 2025 年中期完成，年產量為 2.75 億加侖。

The timeline for completion of the ethanol production expansion has been extended from our previous target to the middle of 2025, due to delays recently communicated by one of our equipment suppliers for delivery of several necessary components. After completion of the expansion and emission certification, we then expect to begin the plan for permitting of the One Earth ethanol facility to allow it to produce 200 million gallons per year.

由於我們的一家設備供應商最近表示延遲交付一些必要的組件，因此完成乙醇生產擴張的時間表已從我們先前的目標延長到 2025 年中期。完成擴建和排放認證後，我們預計將開始 One Earth 乙醇工廠的許可計劃，使其每年生產 2 億加侖。

As I have said before, the regulatory steps receiving an additional permit is the only step necessary to allow for the expanded capacity from 175 million to 200 million gallons. As no major additional construction or capital spending is expected.

正如我之前所說，獲得額外許可的監管步驟是將產能從 1.75 億加侖擴大到 2 億加侖所需的唯一步驟。由於預計不會有重大的額外建設或資本支出。

The expansion will give REX additional earnings power, allow us to sell more product from our highly efficient consolidated plant in Gibson City. We expect that the expansion will provide even greater benefit to shareholders, as well as our ability to self fund ongoing and future growth projects.

此次擴建將為 REX 帶來額外的獲利能力，使我們能夠從位於吉布森市的高效綜合工廠銷售更多產品。我們預計，此次擴張將為股東帶來更大的利益，並增強我們為正在進行和未來的成長項目提供自籌資金的能力。

As Stuart previously said, the carbon capture and compression portion of our One Earth Energy project in Gibson City, Illinois, is substitution complete. We're excited about reaching these milestones and we are looking forward to other portions of the project.

正如斯圖爾特之前所說，我們位於伊利諾伊州吉布森市的同一個地球能源項目的碳捕獲和壓縮部分已經完成替代。我們很高興能夠實現這些里程碑，並期待該專案的其他部分。

Just add with the expansion of our operation at the One Earth site, further work and testing in the capture and compression facilities are subject to completion of the utility interconnection to supply power to the project.

隨著我們在 One Earth 站點業務的擴展，捕獲和壓縮設施的進一步工作和測試取決於公用事業互連的完成，以便為該專案供電。

While waiting for power, we continue to wait on several regulatory issues to be resolved. Our permit application for Class VI injection wells are still under review with anticipated final approval slated for July 2025 according to the EPA.

在等待電力的同時，我們繼續等待幾個監管問題的解決。我們的 VI 類注入井許可證申請仍在審查中，根據 EPA 預計最終批准時間為 2025 年 7 月。

As a result of these challenges and as the capture and compression portion of the project are substant nationally complete, we plan to manage near-term major capital expenditure related to the CCS project in order to maintain budgetary flexibility and stay within projects spent in light of the timeline for approval. Given the new permitting reality, we are confident that pursuing the several ongoing portion of this project in this way is the right path.

由於這些挑戰，並且該專案的捕集和壓縮部分已在全國範圍內基本完成，我們計劃管理與 CCS 專案相關的近期主要資本支出，以保持預算靈活性並根據以下情況控制在專案支出範圍內：批准的時間表。鑑於新的允許的現實，我們相信以這種方式推進該項目的幾個正在進行的部分是正確的道路。

As of quarter end, we have invested approximately $103 million into the One Earth carbon capture project and ethanol production capacity expansion combined. Spending for the carbon capture and sequestration project stood at $52.9 million as of third quarter and while expenditure on the ethanol expansion stood at $50.2 million as of the same date. This is compared to total combined budgeted amount of $165 million to $175 million for both the CCS project and ethanol production expansion at Gibson City.

截至季末，我們已向 One Earth 碳捕獲計畫和乙醇產能擴張投資約 1.03 億美元。截至第三季度，碳捕獲和封存項目的支出為 5,290 萬美元，而截至同一日期，乙醇擴建項目的支出為 5,020 萬美元。相較之下，吉布森市 CCS 項目和乙醇生產擴張的總預算總額為 1.65 億至 1.75 億美元。

I would like to hand the call to our CFO, Doug Bruggeman, to discuss our operational and financial results.

我想將電話轉給我們的財務長 Doug Bruggeman，討論我們的營運和財務表現。

Thanks, Zafar. I'll begin with our operational results.

謝謝，紮法爾。我將從我們的營運結果開始。

REX's ethanol sales volume during the third quarter 2024 were 75.5 million gallons. An increase of approximately 3% versus third quarter 2023 sales volume of 73.2 million gallons.

REX 2024 年第三季的乙醇銷售量為 7,550 萬加侖。與 2023 年第三季的 7,320 萬加侖銷量相比成長約 3%。

Average selling price for a consolidated ethanol volume was $1.83 per gallon for the third quarter compared to $2.32 per gallon in the third quarter of 2023.

第三季綜合乙醇量的平均售價為每加侖 1.83 美元，而 2023 年第三季為每加侖 2.32 美元。

Dry distiller grain sales volume during the third quarter of 2024 totaled 170,116 tons, a 5% decrease over the third quarter 2023 volumes. Average selling price for the dry distiller grain was $147.14 per ton for the third quarter 2024 compared to $194.94 per ton in the third quarter of 2023.

2024年第三季乾酒糟銷售量總計170,116噸，較2023年第三季下降5%。 2024 年第三季乾酒糟的平均售價為每噸 147.14 美元，而 2023 年第三季為每噸 194.94 美元。

Modified distiller grain sales volumes were 18,392 tons in the third quarter 2024 compared with approximately 13,500 tons in the third quarter of 2023. The average selling price for modified distiller grain was $63 per ton for the third quarter versus $85.86 in the prior year third quarter.

2024 年第三季改質酒糟銷售量為18,392 噸，而2023 年第三季約為13,500 噸。 。

Corn oil sales volume in the third quarter 2024 were approximately 23.4 million pounds compared to 24.1 million pounds sold in the third quarter of 2023. The average selling price for REX's corn oil products was $0.44 per pound for the third quarter of 2024 compared to $0.61 per pound in the third quarter of 2023.

2024 年第三季的玉米油銷量約為2,340 萬磅，而2023 年第三季的銷量為2,410 萬磅。第三季的平均售價為每磅0.61 美元。

Gross profit for third quarter 2024 was $39.7 million versus gross profit of $39.3 million for the third quarter of 2023. The 1% increase in gross profit was achieved despite lower average selling prices for all products which were more than offset by lower corn and natural gas input prices.

2024 年第三季的毛利為3,970 萬美元，而2023 年第三季的毛利為3,930 萬美元。實現了1% 的成長輸入價格。

Our selling general and administrative expenses increased to $8.4 million for the third quarter of 2024 versus $7.6 million in the third quarter of 2023. The increase was primarily due to railcar leasing cost increases and certain donations to local first responders related to the carbon capture at the One Earth facility.

2024 年第三季度，我們的銷售一般和管理費用增加至840 萬美元，而2023 年第三季度為760 萬美元。捕獲相關的某些捐款。

Interest and other income totaled $4.6 million in the third quarter of 2024 compared with $4.9 million for the third quarter of 2023. Prior year amounts included $900,000 of COVID related grants from the USDA.

2024 年第三季的利息和其他收入總計 460 萬美元，而 2023 年第三季為 490 萬美元。

Income before taxes and noncontrolling interest for the third quarter of 2024 was approximately $39.5 million compared to $41.3 million for the third quarter of 2023.

2024 年第三季的稅前和非控股權益前收入約為 3,950 萬美元，而 2023 年第三季為 4,130 萬美元。

Net income attributable to REX shareholders for the third quarter was $24.5 million compared to $26.1 million in the third quarter of 2023. On a per share diluted basis for the third quarter 2024, this amounts to $1.38 per share of net income. The second best results in the history of the company only exceeded by net income generated in the third quarter of 2023.

第三季歸屬於 REX 股東的淨利為 2,450 萬美元，而 2023 年第三季為 2,610 萬美元。該公司史上第二好的業績僅落後2023年第三季產生的淨利。

We ended the third quarter with total cash cash equivalent and short-term investments of $365.1 million compared with $378.7 million as of January 31, 2024. The uses of cash during the first nine months of the fiscal year were primarily related to our ongoing construction projects at the One Earth Energy facility. REX American also entered the quarter without any bank debt.

截至第三季末，我們的現金等價物及短期投資總額為3.651 億美元，而截至2024 年1 月31 日為3.787 億美元。有關在同一個地球能源設施。 REX American 進入本季時也沒有任何銀行債務。

And I like to turn things back to Zafar.

我喜歡把事情轉回紮法爾。

Thanks, Doug. I would now like to discuss how we see the end of the fiscal year shaping up

謝謝，道格。我現在想討論我們如何看待本財年結束的情況

As Stuart stated earlier, our plants continue to run with positive earnings into the fourth quarter, but not at the level of last year's fourth quarter.

正如斯圖爾特早些時候所說，我們的工廠在第四季度繼續盈利，但未達到去年第四季的水平。

Corn input prices have improved compared to a year ago. And given the bumper crop of corn in the Midwest, we expect adequate supply for our plants for this growing season.

玉米投入價格與一年前相比有所改善。鑑於中西部玉米豐收，我們預計本生長季節我們的植物供應充足。

As we have mentioned before, we do see supportive dynamics for ethanol pricing for the export market. Ethanol exports through the first nine months of the calendar year were approximately 33% higher than at the same point in calendar 2023 according to the US Energy Information Administration. This level returns US export to their pre-pandemic levels and puts the US on pace to exceed 2018 export volumes. Currently the all time high year for export.

正如我們之前提到的，我們確實看到了出口市場乙醇定價的支持動力。根據美國能源情報署的數據，今年前 9 個月的乙醇出口量比 2023 年同期高出約 33%。這一水平使美國出口恢復到大流行前的水平，並使美國預計將超過 2018 年的出口量。目前是出口歷史最高的一年。

Looking ahead to 2025, we are particularly excited about the completion of our ethanol production expansion and the anticipated increase in profitability this will allow for. We will still expect approval of our Class VI permit from the EPA in the near term and to continue making progress on our CCS facility, which we expect would bring additional profitability once in operation.

展望 2025 年，我們對乙醇生產擴張的完成以及預期獲利能力的提高感到特別興奮。我們仍預計在短期內獲得 EPA 的 VI 級許可證的批准，並繼續在我們的 CCS 設施上取得進展，我們預計該設施一旦投入運營將帶來額外的盈利能力。

Looking further down the road, the projects we are working on today are laying the groundwork for further potential growth into sustainable aviation fuel and third party carbon sequestration. We are excited about the future as we grow organically and are confident in our team's ability to rise to the challenges at every turn.

展望未來，我們今天正在進行的項目正在為可持續航空燃料和第三方碳封存的進一步潛在成長奠定基礎。隨著我們的有機發展，我們對未來感到興奮，並對我們團隊應對每一次挑戰的能力充滿信心。

Now, I would like to open things up to question. Operator?

現在，我想提出一些問題。操作員？

Thank you. We will now be conducting a question and answer session. (Operator Instructions)

謝謝。我們現在將進行問答環節。 （操作員說明）

Jordan Levy, Truist.

喬丹·利維，真理主義者。

Morning, all. Congratulations on the solid quarter. Wanted to get your thoughts here. There was just an article I saw from Reuters that was saying the Biden administration won't finalize 45C Biden's ahead of the January inauguration. So let me get your thinking as it relates to the growth initiatives on the expansion the (inaudible) effort. Should the incoming administration fail to finalize 45C of the year? Just let it kind of slip to the side. How does this all look under 45 with you and how do you think about that more broadly?

早安，大家。恭喜本季業績穩定。想在這裡了解您的想法。我剛剛從路透社看到一篇文章說拜登政府不會在 1 月就職典禮之前敲定 45C 拜登的方案。因此，讓我聽聽您的想法，因為它與擴展（聽不清楚）努力的成長計劃有關。即將上任的政府是否應該未能最終確定年度 45C？就讓它滑到一邊吧。對於 45 歲以下的你來說，這一切看起來怎麼樣？

In my opinion -- This is Stewart, I'll answer and Zafar can follow up. But if we also believe they won't finalize 45C by the end of the term and we don't know what the Trump administration will do. We don't know their feelings on 45 period QRZ. And so we remain wary of what they will do. We don't know.

在我看來——這是斯圖爾特，我來回答，紮法爾可以跟進。但如果我們也相信他們不會在任期結束前敲定 45C，我們就不知道川普政府會做什麼。我們不知道他們對 45 期 QRZ 的感受。因此，我們對他們會做什麼保持警惕。我們不知道。

And in reality, it's going to be really hard to get 45C without any regulations and without any PA permit. Right now, it's going to be really hard for us to benefit in the next two years from 45C. So hopefully we can benefit at least get one year of 45C, but it's going to be very difficult right now because they have not finalized the regulations and we don't know what the new Trump administration's going to do. Zafar?

事實上，在沒有任何法規和 PA 許可的情況下，想要獲得 45C 是非常困難的。現在，我們在未來兩年內很難從 45 攝氏度中受益。因此，希望我們至少能夠受益於一年的 45 攝氏度，但現在這將非常困難，因為他們還沒有最終確定法規，我們不知道新的川普政府會做什麼。紮法爾？

Yeah, I think the only hope to or I see because in Midwest is a -- basically the farmers and corn growers and there's a lot of support we see from farmers and corn growers because they are also looking for to see how they can benefit from 45C as a crops, which they plan to have. You use a different method and no tail and others and they can get also benefit from 45C.

是的，我認為唯一的希望或我看到的，因為在中西部，基本上是農民和玉米種植者，我們看到農民和玉米種植者提供了很多支持，因為他們也在尋求如何從中受益45C作為農作物，他們計劃擁有。你使用不同的方法，沒有尾巴和其他人，他們也可以從 45C 中受益。

So we certainly see some support from the all these states. And hopefully, that will make some difference when Trump administration will take over and able to convince that. But on the other hand, the period is very short, that was only 2025 to 2027. And we see some movement to extend that period to 12 years. But at this time, we have no really solid knowledge what exactly going to happen.

因此，我們當然看到所有這些州的一些支持。希望當川普政府接管並能夠說服這一點時，這會產生一些影響。但另一方面，這個期限非常短，只有 2025 年到 2027 年。但目前，我們並不清楚到底會發生什麼事。

One other thing, Jordan, at this time for -- Jordan, at this time, 45Q is in effect and that's cut and dry at $85 a ton that has passed legislatively. So if nothing, if we don't get 45C the way the law is written today, we would get 45Q which is $85 a ton, which would still make our project very profitable. As long as I keep that.

另一件事，喬丹，此時，喬丹，此時，45Q 已生效，並且已通過立法，價格為每噸 85 美元。因此，如果沒有什麼，如果我們不按照今天法律規定的方式獲得 45C，我們將獲得 45Q，即每噸 85 美元，這仍然會使我們的專案非常有利可圖。只要我保留這一點。

Yeah. And I think I add to that is as, Jordan, that you have to be serviced in by 2032. And so we have enough time, '34 actually, 2034. So we have enough time to really to be in service before we -- time expire. But 45C was only three years so that's the difference between 45Q and 45C that we can take advantage of 45Q.

是的。我想我要補充的是，喬丹，你必須在 2032 年之前服役。 所以我們有足夠的時間，'34 實際上，2034 年。但45C只有三年，所以這就是45Q和45C之間的差別，我們可以利用45Q。

Got it. And then you all have always been a very prudent allocators of capital stewards so far, looking at the incoming, whatever you expect for the incoming policy landscape and recognizing that you've got a significant amount of cash on the balance sheet right now, that it's a nice update from last quarter. If you look at the areas of opportunity for you all in terms of employing that cash, I think you noted managing costs on the CCS side of things as you figure out what things look like. But where do you see the most attractive opportunities for allocating the cash at this point?

知道了。到目前為止，你們一直都是資本管理人的非常謹慎的配置者，無論您對即將到來的政策環境有何期望，並認識到您現在的資產負債表上有大量現金，這是上個季度的一次不錯的更新。如果你看看你們所有人在使用這些現金方面的機會領域，我想你們在弄清楚事情是什麼樣子時注意到了 CCS 方面的成本管理。但目前您認為最有吸引力的現金分配機會在哪裡？

Well, one thing we've always done, Jordan, as you know, when the stock drops -- if the stock ever dropped significantly, we are kings of buybacks. We bought back probably more shares percentage wise than any other company I know so that's one thing.

好吧，喬丹，正如你所知，我們一直在做一件事，當股票下跌時 - 如果股票大幅下跌，我們就是回購之王。我們回購的股票百分比可能比我所知道的任何其他公司都多，所以這是一回事。

The other thing is we always are looking for opportunities whether it's new ethanol plants. And there are a few that we're looking at, but that doesn't mean anything when they're in the very, very preliminary stages and who knows if anything will happen. Generally today, the prices people want is way above what we're willing to pay so that's an issue. But that's always an opportunity.

另一件事是我們一直在尋找機會，無論是新的乙醇工廠。我們正在研究一些，但當它們處於非常非常初級的階段時，這並不意味著任何事情，誰知道是否會發生什麼。一般來說，今天人們想要的價格遠高於我們願意支付的價格，所以這是一個問題。但這總是一個機會。

And thirdly, we're not afraid to go into other things that are related -- either related or sometimes even unrelated to our business that we think our management skills will work with. We haven't done that in a while, but as you know, we were retailers at one time and now we're ethanol producers. So we're very good at if we have -- if it comes to that of looking, if we see great opportunities of jumping on those if they become available.

第三，我們不害怕涉足其他相關的事情——要么與我們的業務相關，要么有時甚至與我們認為我們的管理技能可以發揮作用的業務無關。我們有一段時間沒有這樣做了，但正如你所知，我們曾經是零售商，現在我們是乙醇生產商。因此，如果我們有——如果涉及到尋找，如果我們看到了抓住這些機會的巨大機會（如果有的話），我們就非常擅長。

Got it, I'll take the rest offline. Thank you all for your time.

明白了，剩下的我就下線了。感謝大家抽出寶貴的時間。

Thank you, Jordan.

謝謝你，喬丹。

(Operator Instructions)

（操作員說明）

Pavel Molchanov, Raymond James.

帕維爾·莫爾恰諾夫，雷蒙德·詹姆斯。

Yeah, thanks for taking the question. Following up on the discussion you just had about future federal policy. It's probably going to be three months, six months before Congress moves forward with tax reform, which may well include some changes to the Inflation Reduction Act. For example, Section 45Q, are you going to postpone any kind of decisions on the carbon capture project until you get clarity that 45Q will remain in place?

是的，感謝您提出問題。繼續您剛才關於未來聯邦政策的討論。國會可能需要三個月、六個月的時間才能推進稅收改革，其中很可能包括《通貨膨脹削減法案》的一些修改。例如，第 45Q 條，您是否打算推遲有關碳捕獲項目的任何決定，直到您明確 45Q 條將繼續存在？

At this point in time, Pavel, we don't -- 45Q goes away. This is only my -- what I would. And again, this is not a Board of Directors decision that Stuart Rose talking, but as far we would continue on, we would continue on with carbon capture because we'll get a greater, if no one else is doing carbon capture, we're doing it, we'll get a much greater price for -- I believe we'll get a much greater price for ethanol.

此時此刻，Pavel，我們不會－45Q 消失。這只是我的──我願意的。再說一遍，這不是斯圖爾特·羅斯所說的董事會決定，但就我們而言，我們將繼續進行碳捕獲，因為我們將得到更大的成果，如果沒有其他人進行碳捕獲，我們將繼續進行碳捕獲。

And I believe there's still be a market to sell our credits to companies that want to become carbon neutral. So I don't think that we would end our project if there was -- and we don't -- at this point in time, we don't expect them to end 45. But anything is possible with the Trump administration and we're well aware of that.

我相信仍然有一個市場可以將我們的積分出售給想要實現碳中和的公司。所以我不認為我們會結束我們的項目，如果有——而且我們沒有——在這個時間點，我們不期望他們結束 45。

But my personal opinion and it's only my personal opinion would be we would continue on with the project and I think it would still be a good project. We wouldn't get government help. But I -- but there's definitely a market for low carbon, jet fuel and I can go on in California a few places. There's a good market for low carbon ethanol. We would be one of the few producers. So my personal opinion would be to continue on with that. Zafar, you want to add anything?

但我個人的觀點，而且這只是我個人的觀點，我們會繼續這個項目，我認為這仍然是一個很好的項目。我們不會得到政府的幫助。但我——但低碳航空燃料肯定有市場，我可以在加州的幾個地方繼續下去。低碳乙醇有良好的市場。我們將成為少數生產商之一。所以我個人的意見是繼續這樣做。紮法爾，你想補充什麼嗎？

Yeah, I think I will add to that. If you remember we started this project in 2018. At that time, there was no Inflation Reduction Act was there and it was approximately $50 was tax credit and that tax credit was also gone through a Trump administration during that. So I don't really see that they're going to be a major changes to 45Q.

是的，我想我會補充這一點。如果你還記得我們在 2018 年啟動了這個計畫。所以我真的不認為它們會對 45Q 產生重大改變。

And also you are aware of that, several other facilities are already working on those 45Q carbon sequestration including project for $7 billion to $8 billion worth for the carbon carbon pipeline. So these people have invested a lot of money on these projects and sudden changes will probably will not be implemented because these pipeline, these projects is already in pipeline and changes can happen. But I personally don't anticipate that there's going to be any changes in 45Q.

你也知道，其他幾個設施已經在致力於 45Q 碳封存，包括價值 70 億至 80 億美元的碳管道項目。因此，這些人在這些項目上投入了大量資金，突然的變化可能不會實施，因為這些管道、這些項目已經在管道中，並且可能會發生變化。但我個人預計 45Q 不會有任何變化。

Okay. Maybe a follow up on the ethanol front.

好的。也許是乙醇方面的後續行動。

You have a long history of operating ethanol plans including, of course, under Trump's first term. Can you just give some historical perspective on how the EPA went about setting the blending mandates between the 2017 and 2021 and how you manage around that.

乙醇計畫的實施由來已久，當然包括川普第一任期內的計畫。您能否就 EPA 如何制定 2017 年至 2021 年期間的混合指令以及您如何管理這一問題提供一些歷史觀點？

At that time, Pavel, I believe it was legislatively set and there was a number of gallons that were that in the law that were the RFs required. Nowadays, I believe that the EPA can set that level wherever they want and that could be an issue going forward. We don't know.

當時，帕維爾，我相信這是立法規定的，法律中規定了 RF 所需的加侖數。如今，我相信美國環保署可以在任何他們想要的地方設定這個水平，這可能是未來的問題。我們不知道。

But they, again, if they set it at a lower level, that could be a problem. If they say if he really wants to be energy independent, like he claims, they could set it at a higher level. We have no idea what they're going to do, but they -- I believe they have the ability to set it at whatever level they choose.

但他們再次強調，如果他們將其設置在較低的水平，那可能會是一個問題。如果他們說他真的想像他聲稱的那樣實現能源獨立，他們可以將其設定在更高的水平。我們不知道他們要做什麼，但他們——我相信他們有能力將其設定在他們選擇的任何水平。

Okay. Understood. Thank you, guys.

好的。明白了。謝謝你們，夥計們。

Tthank you, Pavel.

謝謝你，帕維爾。

Thank you. We have no further questions at this time. I would like to turn the floor back over to management for closing comments.

謝謝。目前我們沒有進一步的問題。我想將發言權交還給管理層以徵求結束意見。

I just wanted to thank everyone for listening. I want to, again, we had another very good quarter, outperforming most if not all of the industry. We have the best plants, great locations, even a great location for a carbon capture project which we hope to implement in the sometime in the next couple of years, hopefully sooner than that. And most importantly, we want -- we feel and we really feel we have the best people in the industry and that's what sets us apart. And again, with the best people, with our CEO, I consider the best in the industry. I think most other people do too. We're well set up for the future. Thank you very much for listening to the call. Bye.

我只是想感謝大家的聆聽。我想，我們又度過了一個非常好的季度，表現超過了大多數（如果不是全部）行業。我們擁有最好的工廠，優越的地理位置，甚至是碳捕獲項目的絕佳位置，我們希望在未來幾年的某個時候實施該項目，希望比這更早。最重要的是，我們希望——我們感覺並且確實感覺到我們擁有業內最優秀的人才，這就是我們的與眾不同之處。再說一次，我認為我們的執行長是業內最優秀的人才。我想大多數其他人也這樣做。我們已經為未來做好了充分準備。非常感謝您收聽電話。再見。

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

女士們、先生們，今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與，祝您有美好的一天。