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Green Plains Renewable Energy's CEO Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: GPRE

Operating income before depreciation for the ethanol production segment was slightly positive in the ethanol segment for the second quarter. Our ethanol yield improved to a record 2.85 gallons of ethanol proportion of corn. On an ongoing basis, we have worked to refine the ethanol production process and get more out of the corn we grind. Whether it has been through our new enzymes or improving process loads, as the company and an industry, we continue to seek improvement in yield.

We have deployed the technology, we refer to as fine-grind in our Shenandoah plant and we are trailing this technology, trailing this technology at another one of our facilities. The process goes after the last 7% of the starch for enzyme conversion to sugar, breaking larger starch particles into smaller ones and breaking starch away from the fiber protein or fat in the corn grind.

We believe this technology could improve our ethanol yield 2% to 3%, and it could also increase corn oil recovery yield 10% to 15%, both having positive contributions to the bottom line over the long-term. We will keep you updated on the progress we make on this technology deployment.

As we evaluate our operations daily, we consider a number of the factors as to whether to slowdown or shutdown each of our plants. These factors vary from plant to plant and region to region. And for Green Plains, improvements we have made from the bottle-necking production to implementing corn oil extraction and now are evaluating fine-grind technologies, all weigh in our decision process from production levels. In this decision, we also look at additional real corn repurposing. To date, besides the announced flowing over few plants the right plan financial decision for us was to keep running.

We generated a record $14.6 million of non-ethanol operating income in the second quarter from our corn oil production, Agro business and marketing and distribution segments.

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