February 10, 2012
The Andersons sees record earnings in 2011
The Andersons Inc. on Wednesday (Feb 8) posted record net income of US$95.1 million for 2011, on revenues of US$4.6 billion.
In the prior year, the company earned US$64.7 million, or US$3.48 per diluted share, and total revenues were US$3.4 billion. The company earned US$21.7 million in the fourth quarter of 2011, or US$1.17 per diluted share, on revenues of US$1.3 billion.
In the same three month period of 2010, the company reported income of US$25.8 million, or US$1.39 per diluted share, on revenues of US$1.2 billion. The majority of the year to year revenue increase relates to rising prices in its agricultural businesses. It is important to remember that revenues in commodity-based businesses may not serve as good indicators of income or economic performance.
The Grain Group's 2011 operating income was a record US$87.3 million. This compares to operating income of US$64.4 million in 2010. The group achieved this performance due primarily to significant space income, which was impacted by substantial wheat basis appreciation and spread gains.
Additionally, Lansing Trade Group had its best ever annual performance. Total revenues for the Grain Group were US$2.8 billion and US$1.9 billion in 2011 and 2010, respectively. Revenues increased significantly due to higher grain prices.
For the fourth quarter, the group's operating income was US$27.3 million on revenues of US$876 million. In the same three month period of 2010, the group had income of US$35.6 million on revenue of US$785 million. For the quarter, the grain business benefited from strong space income, the reversal of a US$3.2 million bad debt reserve and solid performance by Lansing Trade Group.
The Ethanol Group achieved an operating income of US$23.3 million in 2011. This compares to US$17 million in the prior year. The higher income is the result of an increase in the company's earnings from its investment in three ethanol limited liability companies.
The ethanol plants have continued to maximise efficiency, additionally the plants have invested further in corn oil, E-85, and CO2, which have proven to be profitable business additions. Total revenues for the year were US$642 million. In comparison, the group's revenues for the prior year were US$469 million.
Revenues increased primarily due to higher ethanol prices. The group's fourth quarter operating income was US$6.5 million on revenues of US$165 million. During the same three month period of 2010, its operating income was US$3 million on revenues of US$128 million.
The Plant Nutrient Group ended the year with record operating income of US$38.3 million due primarily to an increase in margin resulting mainly from nutrient price appreciation and to a lesser degree from product mix. In 2010, the group had an operating income of US$30.1 million.
Revenues for 2011 and 2010 were US$691 million and US$619 million, respectively. Revenues increased in 2011 due to higher nutrient prices, which were partially offset by a decrease in volume. For the fourth quarter, the group's operating income was US$2.5 million on US$170 million of revenues.
Last year the group had operating income of US$8.9 million during the same three month period on revenues of US$159 million. The income decline in the fourth quarter includes US$4.7 million of charges due to the recording of a lower of cost or market inventory adjustment and asset impairment charges.
"Clearly, both our full year and fourth quarter earnings were heavily influenced by the results within our agricultural businesses. The record full year earnings in both our Grain and Plant Nutrient groups and second best year in the Ethanol Group is gratifying," CEO Mike Anderson stated.
"Our 2011 Rail Group results improved significantly from the prior year as a result of improved economic conditions." Anderson added, "In the last year we have demonstrated our commitment to growth by adding 1.7 million bushels of grain storage capacity, beginning construction on a grain shuttle loader facility in Nebraska, and acquiring two businesses in the Plant Nutrient Group - Immokalee Farmer Supply in Florida in October of 2011, and New Eezy Gro, an Ohio based company, last week. We intend to continue to pursue our growth strategy in 2012 and beyond."