MAUMEE, OHIO, US — Record fourth-quarter results helped fuel a full-year earnings rebound at The Andersons, Inc.
Net income in the year ended Dec. 31, 2021, totaled $103.99 million, equal to $2.99 per share on the common stock, up sharply from $7.71 million, or 17¢ per share, in fiscal 2020. Revenues, meanwhile, surged 56% to $12.61 billion from $8.06 billion.
The company, which conducts business in agricultural commodity merchandising, renewables and plant nutrient sectors, reported strong performances in all business segments in the fourth quarter of 2021.
Plant Nutrient posted a record fourth quarter with pretax incomes of $15.9 million. Gross profit increased over $8.6 million from strong margins in agricultural and industrial product lines resulting from continued strength in both fertilizer prices and farmer income. Full-year pretax income of $42.6 million was also a record.
Renewables (formerly Ethanol) recorded pretax income of $26.5 million on strong margins, the best fourth quarter since 2013 and strongly rebounding from last year’s fourth quarter operating loss of $3.5 million. The Renewables segment’s revenues came in at $767 million, which compared with $374 million in the same quarter a year ago.
Trade reported pretax incomes of $18.3 million and adjusted pretax incomes of $26.9 million, driven by strong asset and merchandising income. It was a slight decline from last year’s fourth-quarter pretax adjusted income of $29.3 million.
Adjusted EBITDA from coming operations was $130.5 million, also a record.
“I’m very pleased with our performance, which includes record fourth-quarter results for the company and for our Plant Nutrient business,” said Pat Bowe, chief executive officer. “We continued to execute well throughout a good 2021 harvest, particularly in the eastern grain belt, made good operating and commercial decisions and enjoyed additional profit from growth in new markets, such as renewable diesel and supply chain extensions with our new Swiss trading office. During 2021, our teams operated safely and effectively in these strong agriculture markets leading to each of our three business segments reaching record or near-record performance in the quarter.
“We enjoyed strong renewable fuels margins in the fourth quarter, remained focused on risk management, effective hedging and strong operational performance, and continued to see good returns from co-products, particularly distillers’ corn oil. We continue to diversify revenues for this group into attractive new product lines. An example of this would be renewable diesel feedstocks. You will note that we have renamed our Ethanol segment ‘Renewables’ to reflect its broader scope of products and services. We continue to see robust activity in our Trade business profit centers and are focused on executing well and serving customer needs in a continuing volatile commodity environment. Finally, Plant Nutrient followed up a very strong first half with a great second half, leading to a record year. Fertilizer prices and farm income both remain high; we continue to receive good support from our suppliers in this time of tight stocks and expect continued strong performance as we move into 2022.”
The company generated $84.4 million and $74.6 million in cash from operations before working capital changes during the fourth quarters of 2021 and 2020, respectively. For the full years 2021 and 2020, the company generated $322 million and $200.9 million in cash from operations before working capital changes, respectively. In light of continuing high commodity prices, capacity in short-term funding has been maintained, The Andersons said.
“Strong operating cash flows and disciplined capital spending decisions continued into the fourth quarter,” said Brian Valentine, executive vice president and chief financial officer. “We are pleased with the progress we made in reducing long-term debt, which declined by more than $300 million in 2021.”
Bowe noted that The Andersons has “a robust pipeline of growth projects that we are evaluating.”
“Our evaluation includes both financial and business considerations and we continue to exercise discipline in our diligence processes,” he said. “We are focused on organic growth projects in grain, renewables, and fertilizer as well as potential acquisitions and investments.”
Earlier this week, The Andersons received more positive news when it was recognized by Forbes magazine as one of America’s Best Midsize Employers of 2022.
“We are honored to be listed as one of America’s best employers and proud this selection was based on positive feedback from our own colleagues,” Bowe said. “Our Statement of Principles forms the basis for our mission and corporate vision. It guides our decision-making process and how we do business, and it clearly states our responsibility to our employees. We value our employees and believe that differences in people are a strength when they are focused on a common goal.”