Andersons Inc Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Pooran Sharma - Stephens - Analyst : Good morning. Thanks for the questions here, and congrats on posting the strong results. Just wanted to maybe focus on 45Z tax credits. You did mention that there's the potential -- or that we should expect to see an increase in contribution from these credits. And we're just doing some rough math. Do you think that increase gets to $0.10 per gallon for 4Q? And just wondering if you could maybe provide some details around how that gets monetized. In regards to 2026, do you think that your CI score -- with the CI score adjustments that you could get to around a $0.20 per gallon tax credit in 2026?

Question: Pooran Sharma - Stephens - Analyst : Great, great. I appreciate you pointing that out there for me. Maybe just shift into Agribusiness and understand that with the policy clarity, trade policy clarity, you can maybe start to see a little more improvement. And just wondering if you do get that and if you do get China to actually start to purchase on that 12 million metric tonnes this year, even just the 25 million metric tonnes annually, do you think that -- how quickly do you think you can get back to a more normalized earnings environment for Agribusiness if you do get those kind of two pieces for that business? And then how quickly can that change in the China trade policy have an impact on the sorghum market? And sorry, just lastly, just wanted to also understand how Skyland is faring if you could confirm your EBITDA contribution expectations for that business?

Question: Pooran Sharma - Stephens - Analyst : Great, great. Appreciate the color. Thank you.

Question: Benjamin Mayhew - Bank of Montreal - Analyst : Hey, good morning, guys. First of all, congratulations on the really strong quarter. So my first question has to do with ethanol demand. And just kind of thinking about as we head deeper into fourth quarter, board crush is coming off from third quarter. How are you thinking about just kind of the run rate of margins? The outlook now that we have E15 approval in California, I mean what's the impact of that? Do we -- maybe do we expect lighter export volumes? Or do you expect export volumes to remain strong? And just trying to get a sense of how we exit the year with ethanol margins, which seem to be overall in a lot better place than historically.

Question: Benjamin Mayhew - Bank of Montreal - Analyst : Got it. That makes sense. My second question has to do with your comments on your financial position and just kind of getting back into the M&A search, if you will. So it sounds like you think this environment is to the point where things are -- fundamentals are poor enough in certain areas where assets will likely come to sale. So I'm just wondering like what are some examples of these asset types that we could think about? And maybe you can't answer this, maybe this is an Investor Day thing, but when you think about the sheer amount of cash flow, you're just going to get from these 45Z tax credits, I mean, assuming it all plays out as we think it's going to in the moment. Over time, I mean, how do you think about that cash accumulation and what you want to spend it on? What like -- and so maybe you can't fully go into that until the Investor Day, but can you give us a teaser or a hint as to what you're thinking in the near term?

Question: Benjamin Mayhew - Bank of Montreal - Analyst : Got it, thanks. I'll hop back in the queue.

Question: Jaeson Schmidt - Lake Street Capital Markets LLC - Analyst : Hi, guys, I appreciate you taking my questions. Just given the current backdrop, do you think the Agribusiness margins have troughed here in Q3?

Question: Jaeson Schmidt - Lake Street Capital Markets LLC - Analyst : Got you. That's really helpful. And then can you remind us what the remaining CapEx requirements are for the two large construction projects?

Question: Jaeson Schmidt - Lake Street Capital Markets LLC - Analyst : Okay. Perfect. And then just the last one for me, and I'll jump back into queue. Just going off some of the previous questions, I know you mentioned your discipline with your capital allocation strategy. But just kind of reconciling that with this excess cash flow that will be coming into the tax credits, does that change the size and scope of things you'd look at in the future?

Question: Jaeson Schmidt - Lake Street Capital Markets LLC - Analyst : Okay. Makes sense. Appreciate the color, guys. Thanks a lot.

Question: Benjamin Mayhew - Bank of Montreal - Analyst : Hey, guys, I'm back for one more. Just a question on the fertilizer business. And you noted in third quarter, which is typically a weaker quarter for this business, volumes and margins were up. So what does that indicate to you ahead of the next planting season? And I guess attached to that question is an update on the US farmer. Now versus maybe a month or two ago, what are you hearing from the farmers in terms of level of optimism and willingness to spend on inputs for the next marketing year?

Question: Benjamin Mayhew - Bank of Montreal - Analyst : Thanks again.