Revenue for the second quarter was $1.064 billion, down 10.3% from $1.187 billion in the same period of last year.
"The first half of the year was challenging, in line with our expectations, due to the poor crop last fall in the Eastern Corn Belt," said Pat Bowe, chief executive officer. "While challenges in our Grain Group persisted, we did begin to see positive impacts from a good wheat harvest, and are starting to capture benefits from our productivity initiatives.”
In the second quarter the Grain Group sustained a loss of $13.037 million, which compared to a gain of $3.149 million in the same period of last year. The Grain Group's Base Grain operations continued to feel the pressure from both low carry and basis appreciation primarily due to the poor crop in the Eastern Corn Belt in 2015, the company said.
Affiliate earnings were lower due to losses in the Lansing Trade Group while performance at Thompsons Limited remained steady. DDGS markets returned toward normal conditions during the quarter for Lansing Trade Group, however they were adversely impacted by trading positions during the quarter, the company said.
During the quarter, The Andersons completed the sale of eight grain and agronomy locations in Western Iowa, U.S., to MaxYield Cooperative of West Bend, Iowa, U.S. The transaction closed on May 1 and resulted in a nominal gain.
For the six months ended June 30, the Grain Group sustained a loss of $30.442 million, which compared to a gain of $3.892 million in the first half of fiscal 2015.
Income in the Ethanol Group fell to $6.187 million in the second quarter, down from $9.667 million in the same quarter of last year. Ethanol margins grew in the second quarter on the seasonal increase in demand from the summer driving season and steady export volumes, the company said.
Other factors that affected second-quarter performance in the Ethanol Group were U.S. gasoline demand that tracked above five year averages, margins that were volatile during the quarter as corn prices moved lower and fuel prices continued to fluctuate, and industry production levels that were at high levels throughout the quarter at times pressuring margins.
The company said its Albion, Michigan, U.S., ethanol facility expansion remains on schedule for startup in the spring of 2017.
Income in the Plant Nutrient business totaled $23.535 million in the second quarter, up from $18.873 million in the same period a year ago.
"We were encouraged to see good volumes of specialty products in our Plant Nutrient business,” Bowe said. "However, margins were disappointing in the face of oversupply of basic nutrients and low grain prices. The industry is starting to see production curtailments in certain products which should help bring supply and demand more into balance."
