GPRE - The Andersons: Cash On Hand To Leverage Future Opportunities

2024-04-19 02:02:42 ET

Summary

• The Andersons is a leading agribusiness logistics company and ethanol producer.
• The company achieved record results in revenues and operating results due to spike in commodity prices.
• The Andersons has opportunities in vegetable oil, feed ingredients, and the nascent SAF market.
• Strong FCF generation between FY21 and FY23 has resulted in significant deleveraging.

The Andersons ( ANDE ) is among the leading agribusiness logistics companies in the United States, as well as the sixth largest U.S. producer of ethanol. Management continues to implement growth strategies, both by diversifying offerings through new acquisitions, as well as engaging in organic growth investments. ANDE achieved record results in both revenues and margins between FY21 and FY23, significantly improving from previous years mainly due to the spike in commodity prices. Despite the overall decline in grains prices in FY23 and in the first months of FY24, corn is still at historically high levels compared to the past 10-year average. This is partly the result of current geopolitical tensions and the war in Ukraine, which weighed enormously on the global balance as Ukraine is one of the largest grain producers . The operating cash flows generated in the last three years have allowed ANDE to significantly reduce total debt, from $1197m as at Dec21 to $687m as at Dec23, with cash and cash equivalent going from $216m to $643m, achieving a net debt close to zero....

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