Green Plains Inc. Q4 FY2024 earnings call

• Restructuring: Identified up to $50 million in annualized cost savings, with $30 million already implemented. This included downsizing the corporate workforce, winding down innovation platforms, attacking SG&A expenses, and reducing the executive leadership team.
• Facility Shutdown: Shut down the 120 million gallon Fairmont facility due to market conditions and flooding, keeping a skeleton crew for maintenance.
• Carbon Progress: On track for Q3/Q4 2024 start of carbon capture, with supportive rulemaking, and Nebraska assets undervalued.
• Protein and Corn Oil Sales: Sold large quantities of 50% protein to a major aquaculture company, legacy pet food customers extended contracts, and corn oil demand remained strong.
• Clean Sugar Initiative: Testing front-end systems, awaiting food safety certification, with potential for 100% capacity once wastewater issues are addressed.

Ethanol: Fourth quarter consolidated revenues were $584 million, 18% lower than the prior year due to lower market prices for ethanol. Plant utilization rate was 92% in Q4, expecting mid-nineties excluding Fairmont. Protein: Ultra high protein yields were in line with prior quarters, but volumes were lower due to protein downtime at Wood River for rebaselining. Sales to aquaculture and pet food customers were noted. Corn Oil: Strong demand with global corn tightness; sold largest quantities of 50% protein to a major aquaculture company, and 60% sequence product interest from customers. Carbon: On track to begin capturing biogenic CO2 in the second half of 2024, with an annualized run rate financial contribution from Nebraska footprint expected to be at least $130 million using a $70 per ton carbon credit value.

• Carbon: Annualized run rate financial contribution from Nebraska footprint on track for at least $130 million using $70 per ton carbon credit value.
• CapEx: 2025 plant-related CapEx expected to be in the range of $20 million to $35 million, with financing in place for carbon capture equipment.
• SG&A: Targeting $50 million in annual cost savings, with phase two of the restructuring starting in 90 days to achieve the full $50 million run rate.

• Market Volatility: Ethanol margins affected by oversupply and high stock levels.
• Regulatory Uncertainty: Tariffs and potential retaliation impacting export markets.
• Protein Market: Oversupply pressure leading to lower margins in the protein space.
• Facility Permitting: Slow permitting processes in Minnesota for Fairmont facility upgrades.

Q: About the $50 million cost savings, can you get granular on where this is coming from and how it impacts profitability?

A: It's from reorganizing corporate and commercial functions, downsizing the workforce, winding down innovation platforms, and rationalizing SG&A to focus on commercializing products and improving cash flow.

Q: Could you talk about aquaculture projects in South America?

A: Penetration has been made, with the sale of largest quantities, and focus on bulk shipping and expanding into more volume. It took 3-4 years to reach this point but will pay dividends in the future.

Q: What's the timeline for CCS?

A: Current service date is late Q3/early Q4 2024, with compression equipment being built and laterals under construction in Nebraska.