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Oct 31, 2022
REX American Q3 2022 Earnings Report
REX American Resources reported Q3 2022 results, reflecting challenges from rising corn and natural gas prices, yet maintaining positive income.
Key Takeaways
REX American Resources reported Q3 2022 net sales and revenue of $220.3 million, compared to $203.1 million in Q3 2021. Net income attributable to REX shareholders from continuing operations was $3.2 million, or $0.18 per share, compared to $13.3 million, or $0.74 per share in Q3 2021. The company faced challenges from rising corn and natural gas prices, but maintained a strong balance sheet with approximately $290 million in cash and short-term investments and no debt.
Q3 2022 net sales and revenue increased to $220.3 million from $203.1 million in Q3 2021, driven by higher pricing for ethanol and related by-products.
Gross profit decreased to $11.3 million from $25.2 million in Q3 2021 due to significant increases in corn and natural gas prices.
Net income attributable to REX shareholders was $3.2 million, or $0.18 per share, compared to $13.3 million, or $0.74 per share in the prior year.
The company had approximately $290 million in cash and short-term investments and no debt at quarter end.
REX American
REX American
Forward Guidance
REX American Resources is focused on carbon capture and sequestration project and is making meaningful progress on this front. The language and opportunities in the Inflation Reduction Act are encouraging, including the new clean fuel production credit under section 45Z and an increase in the 45Q credit to $85 per ton.
Positive Outlook
- Filed a Class VI injection well permit application for three wells.
- Signed a contract for a carbon compression facility for the One Earth Energy ethanol plant.
- New clean fuel production credit under section 45Z.
- Increase in the 45Q credit to $85 per ton.
- Strong capital structure positions REX to continue to benefit its shareholders.
Challenges Ahead
- Faced significant price increases in corn and natural gas.
- Ongoing logistical constraints.
- Difficult operating environment.
- Gross profit decreased to $11.3 million from $25.2 million in Q3 2021.
- Net income attributable to REX shareholders was $3.2 million compared to $13.3 million in Q3 2021.