Q1 2026 REX American Resources Corp Earnings Call
Operator: Greetings and welcome to the REX American Resources Corporation's first quarter 2025 earnings call. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation.
Greetings and welcome to the Rex American Resources Corporation's first quarter 2025 earnings call.
Operator: If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.
Doug Bruggeman: It is now my pleasure to introduce Doug Bruggeman, Chief Financial Officer. Please go ahead.
Doug Bruggeman: Good morning and thank you for joining REX American Resources' Q1 2025 conference call. With me on our call today are Stuart Rose, REX Executive Chairman and Zafar Rizvi, REX CEO.
Executive Chairman and Zafar Rizvi Rex C E O well get to our presentation and comments momentarily as well as your questions, but first I will review the safe Harbor disclosure.
Doug Bruggeman: We'll get to our presentation and comments momentarily, as well as your questions, but first I will review the Safe Harbor Disclosure. In addition to historical facts or statements of current conditions, today's conference call contains forward-looking statements that involve risk and uncertainties within meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the company's current expectations and beliefs, but are not guarantees of future performance. As such, actual results may vary materially from expectations.
In addition to historical facts or statements of current conditions. Today's conference call contains forward looking statements that involve risks and uncertainties within the meaning of the private Securities Litigation Reform Act of 1995.
Such forward looking statements reflect the company's current expectations and beliefs, but are not guarantees of future performance.
Such actual results may vary materially from expectations, the risks and uncertainties associated with the forward looking statements are described in today's news announcement and the company's filings with the Securities and Exchange Commission, including the company's reports on Form 10-K and 10-Q.
Doug Bruggeman: The risks and uncertainties associated with the forward-looking statements are described in today's news announcement and the company's filings with the Securities and Exchange Commission, including the company's reports on Form 10-K and 10-Q. REX American Resources assumes no obligation to publicly update or revise any forward-looking statement.
Rex American resources assumes no obligation to publicly update or revise any forward looking statements.
Stuart Rose: I'd now like to turn the call over to our Executive Chairman, Stuart Rose. Good morning, and thank you to everyone for joining us today. First quarter of 2025 demonstrated REX's continued operational excellence and strategic excellence. We maintained our position as one of the industry's most consistent performers in the face of uncertain and evolving regulatory and market conditions. During the quarter, we saw stable ethanol demand and managed our production as we have in the past to capitalize on market conditions as we see them. The strength of our balance sheet continues to provide us with flexibility to pursue strategic opportunities while maintaining our disciplined approach to capital allocation.
Now I'd like to turn the call over to our executive Chairman Stuart Rose.
Stuart Rose: Good morning, and thank you to everyone for joining us today.
Speaker Change: First quarter of 2025 demonstrated Rhexis continued operational excellence and strategic execution, we maintained our position as one of the industry's most consistent performers in the face of uncertain and evolving regulatory and market conditions during the quarter, we saw stable ethanol demand.
Speaker Change: And managed our production as we have in the past to capitalize on market conditions as we see them.
Speaker Change: The strength of our balance sheet continues to provide us with flexibility to pursue strategic opportunities, while maintaining our disciplined approach to capital allocation.
Stuart Rose: As always, we continue to evaluate potential acquisition opportunities that meet our strict operational and financial criteria. Both of our organic growth initiatives, carbon capture and expansion of ethanol production capacity at One Earth, continue to progress. For the remainder of the year, we anticipate moving these projects forward, controlling what we can.
Speaker Change: As always we continue to evaluate potential acquisition opportunities that meet our strict operational and financial criteria.
Speaker Change: Both of our organic growth initiatives carbon capture and expansion.
Speaker Change: Oh adapting capacity at one Earth continues to progress.
Speaker Change: During the year, we anticipate moving these projects forward controlling what we can.
Stuart Rose: Beyond operations, one of the duties we take very seriously at REX is delivering consistent value to our shareholders. To this end, we have continued the share buybacks that we have talked about on our last call. During the first quarter, we repurchased approximately 822,000 shares for a total consideration of $32.7 million. During a period when our share price we believe was undervalued. Average Purchase Price for the repurchase shares was $39.80. This brings our buyback activity to approximately 6.8% of our outstanding shares.
Speaker Change: Beyond operations wanted their duties, we take very seriously at Rex is don't let frame consistent value to our shareholders to this end we have continued to share buybacks that we've talked about on our last call. During the first quarter, we repurchased approximately 822000 <unk>.
Speaker Change: Shares for a total consideration.
Speaker Change: $32.7 million during a period when our share price, we believe was undervalued.
Speaker Change: Average purchase price.
Speaker Change: Alright, the repurchased shares was $39 80 shops. This springs, our buyback activity to approximately six 8% of our outstanding shares since we initiated purchases in December 2024. Currently we have approximately 1 million 100.
Stuart Rose: REINITIATING PURCHASE December 2024. Currently, we have approximately 1,182,000 shares remaining on the buyback authorization, which represents an additional approximately 7% of outstanding shares We plan to continue executing on the remaining share purchase authorizations when and where we see value.
Speaker Change: 92000 shares remaining on our buyback authorization, which represents an additional approximate one 7% of outstanding shares we plan to continue executing on the remaining share purchase authorization.
Speaker Change: And where we see value.
Zafar Rizvi: I'll now turn the call over to our CEO, Zafar Rizvi, to provide updates on our ongoing project. Thank you, Stuart. Regarding our ethanol facility expansion in Gibson City, we are continuing a technical review of several key project components. This ongoing evaluation has already yielded valuable insights that we believe will enhance the long-term operational efficiencies of the expanded facility when materialized. During the first quarter, we maintained close coordination with the EPA regarding our Class VI Injection Well Permit. The EPA currently anticipates issuing a final permitting decision on our application by January 2026. In parallel, we are closely monitoring potential changes to the Inflation Reduction Act, particularly regarding tax credit provision for carbon capture projects.
Rents Fee: I'll now turn the call over to our CEO, so far rents fee to provide updates on our ongoing projects.
Stuart Rose: Thank you Stuart.
Stuart Rose: Regarding ethanol facility expansion in Gibson City, we are continuing technical review of several key project components. This ongoing evaluation has already yielded valuable insights that we believe in that.
Stuart Rose: The long term operational.
Stuart Rose: <unk> opex spending facility been materialized.
Stuart Rose: During the first quarter, we maintained close coordination with the EPA regarding hourglass six injection well pardon me.
Stuart Rose: The EPA currently anticipate issuing a final permitting the season when our application by January 2026.
Stuart Rose: In parallel we are closely monitoring potential changes to the inflation reduction act, particularly regarding tax reason for carbon capture projects, specifically 45 and.
Zafar Rizvi: Specifically, 45Q and 45Z, which relate to a low-carbon fuel. The Big Beautiful Bill includes several proposed amendments that could impact our planning and future economic decisions.
Stuart Rose: And 45 D, which has led to a low carbon fuels.
Stuart Rose: Big Beautiful Bill includes several proposed amendment that could impact our planning and future economic season.
Zafar Rizvi: In the 2025 Illinois legislative session, Senate Bill 1723 was introduced with an amendment defining the term sole source equity. Under this definition, the bill would prohibit carbon sequestration activities above, below, or through such aquifers. The legislation is now under consideration by the Governor. But most importantly, our proposed injection well sites, including our initial well and two additional locations, are situated approximately six miles outside the map boundary of the Mohammed Sole Source Aquifer, as defined in the bill. We view this positive development for our project. From the beginning, we have supported measures to protect vital drinking water resources and are committed to ensure safety for our operations and the broader community.
Stuart Rose: In the 2025.
Stuart Rose: Legislative session Senate Bill 17, 23 was introduced an amendment defining the sole source equifax.
Stuart Rose: Under this definition debatable, but carbon sequestration activities I'm, Bob below through such.
Stuart Rose: Yeah.
Stuart Rose: Legislation is now under consideration by the Guatemala, but most.
Stuart Rose: Importantly, our board injection, well sites, including our initial well.
Stuart Rose: And what do you sell locations OXXO situated approximately six miles outside the map boundary of them, how much solar salts Aqua flat as defined in the bill.
Stuart Rose: We view this positive development for our project from the beginning we have supported major to protect why drinking water sources.
Stuart Rose: And are committed to ensure safety for our operations and the broader community.
Zafar Rizvi: As of the end of Q1, our total investment in the carbon capture and ethanol expansion projects stands at approximately $122.7 million. We remain within our revised combined budget range of $220 million to $230 million for both projects.
Stuart Rose: As of the end of Q1, our total investment in the carbon capture and ethanol expansion projects at.
Stuart Rose: At approximately $127 million.
Stuart Rose: With a mean.
Stuart Rose: We didn't predict.
Stuart Rose: Weis combined.
Stuart Rose: $220 million.
Stuart Rose: $230 million for both projects.
Doug Bruggeman: I will now hand the call over to Doug Bruggeman to discuss our financial results. Thanks, Zafar. During the first quarter of fiscal 2025, our ethanol sales volumes reached 70.9 million gallons compared to 74.5 million gallons in the first quarter of 2024. The average selling price for ethanol was $1.76 per gallon during the quarter. Lower ethanol sales volumes in Q1 2025 were mostly attributable to timing of shipments as our production was relatively stable between periods. Dry distillery grain sales volumes were approximately 153,000 tons for Q1 with an average selling price of $145.65 per ton. Modified distillery grain volumes totaled approximately 22,000 tons.
Doug: I hand, the call over to Doug to discuss our financial results.
Stuart Rose: Thanks, So far.
Stuart Rose: During the first quarter of fiscal 2025, our ethanol sales volumes reached $70 9 million gallons compared to $74 5 million gallons in the first quarter of 2024.
Stuart Rose: The average selling price for ethanol was $1 76 per gallon during the quarter.
Stuart Rose: Lower ethanol sales volumes in Q1, 2025 were mostly attributable to timing of shipments as our production was relatively stable between the periods.
Doug Bruggeman: Dry distiller grain sales volumes were approximately 153000 tons for Q1 with an average selling price of $145 65 per ton.
Doug Bruggeman: Modified distiller grain volumes totaled approximately 22000 tons with.
Doug Bruggeman: with an average selling price of $73.44 per ton. corn oil sales volumes were approximately 21.4 million pounds during the quarter with an average selling price of 46 cents per pound. Gross profit for the first quarter was $14.3 million compared to $14.5 million in Q1 2024. primarily reflects lower sales prices for dry distiller grains, somewhat offset by improved ethanol prices. Selling general and administrative expenses were approximately $5.9 million for the quarter, compared to $6.1 million in Q1 2024. Interest and other income totaled $4.2 million for the quarter compared to $5.9 million in the first quarter of the prior year.
Stuart Rose: With an average selling price of $73 44 per ton.
Stuart Rose: Corn oil sales volumes were approximately 21 4 million pounds during the quarter with an average selling price shifts 46 cents per pound.
Gross profit for the first quarter was $14 $3 million compared to $14 $5 million in Q1 2024.
Stuart Rose: This primarily reflects lower sales prices for dry distiller grains somewhat offset by improved ethanol pricing.
Stuart Rose: Selling general and administrative expenses were approximately $5 $9 million for the quarter compared to $6 $1 million in Q1 2024.
Stuart Rose: Interest and other income totaled $4 $2 million for the quarter compared to $5 $9 million into first quarter of the prior year.
Doug Bruggeman: Income before taxes non-controlling interest was approximately $13.6 million compared to $16 million in Q1 2024. Net income attributable to REX shareholders was $8.7 million or $0.51 per diluted share compared to $10.2 million or $0.58 per diluted share in Q1 2024. The reduction was primarily attributable to lower cash balances and interest income rather than operations. We ended the first quarter with cash, cash equivalents, and short-term investments of $315.9 million. The reduction from the previous quarter primarily reflects our ongoing capital investments in growth projects and share repurchase. As previously announced, we remained active in our share repurchase program during Q1, acquiring approximately 822,000 shares for a total consideration of $32.7 million.
Stuart Rose: Income before taxes, Noncontrolling interest was approximately $13 $6 million compared to $16 million in Q1 2024.
Stuart Rose: Net income attributable to Rex shareholders was $8 $7 million or <unk> 51 per diluted share compared to $10 $2 million or <unk> 58 per diluted share in Q1 2020 for the.
Stuart Rose: The reduction was primarily attributable to lower cash balances and interest income rather than operations.
Stuart Rose: We ended the first quarter with cash cash equivalents and short term investments of $315 $9 million the reduction from the previous quarter, primarily reflects our ongoing capital investments in growth projects and share repurchases.
Stuart Rose: As previously announced we remained active in our share repurchase program. During Q1, acquiring approximately 822000 shares for total consideration of $32 $7 million.
Doug Bruggeman: This reflects our ongoing commitment to delivering shareholder value and our confidence in REX's future prospects.
Stuart Rose: Reflects our ongoing commitment to delivering shareholder value and our confidence in <unk> future prospects.
Doug Bruggeman: REX continues to maintain a strong financial position with no bank debt.
Stuart Rose: <unk> continues to maintain a strong financial position with no bank debt.
Zafar Rizvi: And I'll turn things back to Zafar. Thank you, Doug.
Zafar Rizvi: I'll now turn things back to Zafar.
Zafar Rizvi: Thank you Doug.
Zafar Rizvi: The REX team continues to execute on the three Ps I discussed on our last call. First Prophet. Our ongoing goal is to run a profitable business, despite market ups and downs, our team has consistently demonstrated their ability to overcome challenges and deliver strong financial results. Quarter after quarter, for our shareholders, notably the first quarter marked REX's 19th consecutive profitable quarter.
Zafar Rizvi: Fedex team continued to execute on that could eat beef I discussed on our last call.
Zafar Rizvi: Plus profit.
Zafar Rizvi: Our ongoing goal is to run a profitable business despite market ups and down our team has consistently the months.
Zafar Rizvi: Their ability to overcome challenges and delivered strong financial results.
Zafar Rizvi: After quarter.
Zafar Rizvi: A lot of our shareholders, notably the first quarter Mark.
Zafar Rizvi: 19th consecutive profitable quarter.
Zafar Rizvi: Second, position. We have strategically positioned ourselves for organic growth. Funded entirely by our own strong balance sheet, our ethanol expansion and carbon capture and sequestration projects. We are focusing on what we can control and making investment to optimize our future operations. We are committed to building REX.
Zafar Rizvi: Second position, we have strategically positioned ourselves for organic growth.
Zafar Rizvi: Funded entirely by our own strong balance sheet, our ethanol expansion and carbon capture and sequestration projects. We are focusing on what we can control and making investments to optimize our.
Zafar Rizvi: Future operation, we are committed to building long term trend.
Zafar Rizvi: Long-Term Strength.
Zafar Rizvi: Finally, policy. On the policy front, we continue to monitor developments closely at both the federal and state levels. While many outcomes remain uncertain and outside our control, we believe we are well-informed and well-prepared to respond to any policy shifts that do arise. Our overall market conditions particularly those that supported the ethanol sector in 2024 remain favorable.
Zafar Rizvi: Finally policy on the policy front, we continue to monitor developments closely at both the federal and state levels, while many remain uncertain and outside our control. We believe we are well informed and well prepared to respond to.
Zafar Rizvi: The policy shift that.
Zafar Rizvi: Duke of ice.
Zafar Rizvi: Our overall market conditions, particularly those that supported the ethanol sector.
Zafar Rizvi: Wonderful.
Zafar Rizvi: Ethanol exports in March 2025 were up 23% compared to March 2024. Cumulatively, U.S. ethanol exports through March 2025 were nearly 19% higher than during the same period in 2024, according to the Renewable Fuel Association. Following a strong first quarter, we are seeing stable performance in the second quarter and expected another profitable result.
Zafar Rizvi: A&P, but ethanol export in March 2025, what.
Zafar Rizvi: 3% compared to March 2024.
Zafar Rizvi: Cumulatively U S ethanol exports through March 2025, well nearly 19% higher than during the same period in 2024.
Zafar Rizvi: Regarding to the renewable fuels Association.
Zafar Rizvi: Following a strong first quarter, we're seeing stay.
Zafar Rizvi: Stable performance in the second quarter and expected that profitable.
Operator: Now, I would like to open things up for questions. Operator. Thank you.
Zafar Rizvi: Now I would like to open things up for questions operator.
Speaker Change: Thank you.
Operator: Ladies and gentlemen, if you would like to ask a question, please press star 1 on your telephone keypad and a confirmation tone will indicate your line is in the question area. You may press star 2 if you would like to remove your question from for participants using speaker equipment. It may be necessary to pick up your headset before pressing the start. One moment, please, while we poll for questions.
Speaker Change: Ladies and gentlemen, if you would like to ask a question. Please press star one on your telephone keypad and a confirmation tone will indicate your line is in the question queue.
Speaker Change: You May press Star two if you would like to remove your question from the queue.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment, please vote poll for questions.
Peter Destreich: And our first question comes from the line of Peter Destreich with Watertower Research. It's a good morning, gentlemen, and thanks for taking my questions. It's great to hear the progress on the share repurchase program. For starters, you know, congratulations on your results and on your 19th consecutive quarter profitability. You know, that consistent profitability is something that has eluded some of your peers, and it's not just profit. You've been generating superior returns on capital as well.
Speaker Change: And our first question comes from the line of Peter gas strikes with Watertown Research. Please proceed.
Speaker Change: Yes.
Speaker Change: Good morning, gentlemen, and thanks for taking my questions that's great to hear the progress on the share repurchase program.
Speaker Change: For starters.
Speaker Change: Congratulations on your results and on the 19th consecutive quarter of profitability.
Speaker Change: That consistent profitability is something that has alluded some of your peers and it's not just profit you've been generating superior returns on capital as well.
Stuart Rose: I'd just like to ask what drives REX's ability to consistently deliver this performance, and could you please discuss what it is about your strategy? Is it the cost control, logistics, or other factors at play? Thank you. Do you want me to answer that?
Speaker Change: Just like the App, what drives <unk> ability to consistently deliver this performance could you. Please discuss what it is about your strategy is that the cost control logistics or other factors at play. Thank you.
Speaker Change: [laughter].
Speaker Change: Do you want me to answer that.
Stuart Rose: Our CEO has a lot to do with it. We have the top CEO in my opinion. This is Stuart talking. In the industry, he watches everything very closely. He watches the corn prices. He watches the ethanol. Very few CEOs or very few people at his level get down to the details that he does.
Speaker Change: So what to do about it.
Speaker Change: We gave away we have that.
Speaker Change: We have the top CEO in my opinion. This is stewart talking in the industry watches everything very very closely he watches.
Speaker Change: Corn prices he watches he got to help them very few Ceos are very few people that his lab will get down to the details that he does and on top of that we have good locations have very very good people that we have set up in each of our plants that are I think separated us from the pack.
Zafar Rizvi: Then on top of that, we have good very good people that we have set up in each of our plants that have separated us from the pack. Let Zafar expand on what I'm saying. The big difference is our people. Yes, I agree. I think the big difference is our people. We have a team. We communicate well. We exactly know what's happening day to day. We have a spreadsheet to monitor how the market is moving up and down. And we try to reach our targets. When we meet our targets, we will try to lock in profit.
Speaker Change: I'll, let <unk> expand on what im saying, but the big difference is our people.
Speaker Change: Yes, I agree I think the big Big.
Speaker Change: The Big difference is our people we have a team we communicated when we exactly know what's happening day to day, we have spreadsheet to monitor how the.
Speaker Change: How the market is moving up and down and we try to reach on our targets. When we meet our targets, we will try to lock in profit.
Zafar Rizvi: That's basically it, but I think we cannot be successful without the great people and without the great team. And we are very fortunate that we have those people who support us, our ideology and mission, and we continue to produce for our shareholders. Okay, thank you.
Speaker Change: That's basically is but I think we cannot be successful without the great people and without the great team and we are very fast to that we have those people who support us.
Speaker Change: Hello, D and mission and we continue to produce what our shareholders.
Speaker Change: Okay. Thank you.
Peter Destreich: My second question is a regulatory question. Could you talk about what specific deregulation measures you'd like to see from the Trump administration that could, you know, help to smooth your runway? For example, you know, where are we on federal pipeline regulations or other relevant areas?
Speaker Change: Second question is a regulatory question.
Speaker Change: Can you talk about what specific deregulation measures you'd like to see from the Trump administration that good.
Speaker Change: Help us nuclear runway for example, where are we on federal pipeline regulations or other relevant areas.
Stuart Rose: Do you want to answer that or do you want me to? You know that. I don't know. I think we're we're I'll answer it.
Speaker Change: What do you want answer that.
Speaker Change: I don't know I think where we're I'll answer it but everything is in limbo right now until this bill pay assets.
Stuart Rose: But everything's in limbo right now until this bill passes. We've worked with where we definitely have contacts in Washington that we're working with, and we have very, very good contacts in Illinois. But right now, we're trying to know exactly what the target is. It's a moving target every day with what's going on in Washington. So I can't.
Speaker Change: With where we definitely have contacts in Washington that we're working with.
Speaker Change: And we have very very good contacts in Illinois, but right now we're trying to <unk>.
Speaker Change: Exactly what that target is it's a moving target every day with what's going on in Washington, So I can't.
Stuart Rose: It's very hard right now to give anyone any indication of when or if we'll ever win and hopefully it's not if, but it could be if we ever get our carbon capture project going.
Speaker Change: It's very hard right now to give anyone any indication of when.
Speaker Change: Well ever win win and hopefully, it's not yet, but it could be if we ever get our carbon capture project outweighed things.
Zafar Rizvi: Things in Washington are in great limbo right now. But I think I add to that is a big, beautiful bill at this stage still includes 45Q and 45Z, and actually 45Z is extended to up to 2031, and I think that's a very positive. And recently, Illinois passed this bill, 1723, which is, we believe, also very positive for our ethanol location, because we are six miles away from aquifer, considered to some other facilities may be on very close to aquifer. And they ban that over, under, and any pipeline or any carbon sequestration of where is aquifer is close to that area.
Speaker Change: Washington aren't great right now.
Speaker Change: But I think I'd add to that.
Speaker Change: Big Beautiful will big Bill at this stage. It's still include 45, and 45 Z and actually 45 D is extended to up to 2031, and I think thats, a very positive and recently.
Speaker Change: No I passed this bill $17 80, which is.
Speaker Change: We believe also very positive for our ethanol location, because we had six miles away from Aqua flat considered to some.
Speaker Change: Facilities, maybe on the closed block were flat and the bad debt.
Speaker Change: Well, what I'm done.
Speaker Change: Any pipeline any carbon sequestration.
Speaker Change: It is aqua flat, it's close to that area. So we believe thats very positive as Stuart mentioned <unk> modules are still under review, we had some contact with them and they are still saying they are starting to review and that's.
Zafar Rizvi: So we believe that's very positive.
Zafar Rizvi: As Stuart mentioned, FSMA rules are still under review. We had some contact with them, and they are still saying they are trying to review. And that rules may trump, administration may just leave it as it is, as those were passed two days before Biden administration left. And if that's the case, then I think we should get to those rules very soon.
Speaker Change: That.
Speaker Change: Make them.
Speaker Change: So maybe just leave it as it is as those well past two days before.
Speaker Change: I Didnt administration left and if that's the case then I think we should get.
Speaker Change: Those rules that is soon as Stuart mentioned that some of these behind our control as you can see my prepared remarks, I mentioned that January 31st we'll be issuing ear Bud.
Zafar Rizvi: As Stuart mentioned, that some of these behind our control, as you can see, my prepared remarks, I mentioned that January 31st will be issuing EPA permit. And today, this morning, they extended that date to 431. So some of these things are behind our control, how the government move forward, and when they finalize their views. So those are just moving target. So we are watching them very closely.
Speaker Change: And today. This morning, we extended that to 431. So some of these things are behind our control how the government to move forward and when they finalize their reviews. So there was just moving target. So we are watching them very closely.
Peter Destreich: Okay, thanks. Yeah, that sounds generally some good momentum on the regulatory side.
Speaker Change: Okay. Thank you got it sounds generally some good momentum on the regulatory side.
Stuart Rose: Just a final... The other thing that you should remember, other thing that you should remember is no matter what, we are expanding our plant. And it's a great plan already. And and we're adding roughly 20, roughly 33% once we finish greater capacity in that plant. So no matter what, we will be growing. Okay, that's great.
Speaker Change: Just a final thing.
Speaker Change: As you remember.
Speaker Change: You should remember is no matter, what we are expanding our plant and its Greg and I are ready and we're adding roughly 20 at roughly 33% once we finish greater capacity in that plant. So no matter, what we will be growing.
Speaker Change: Yeah.
Speaker Change: Okay. That's great. Thank you very much just one final question just a macro question it'd be great to hear your thoughts on the industry fundamentals.
Peter Destreich: Thank you very much.
Peter Destreich: Just one final question, just a macro question. It'd be great to hear your thoughts on the industry fundamentals. You know, where are ethanol margins trending as we approach the summer and what are the drivers and outlook there?
Speaker Change: Where ethanol margins trending as we approach the summer and what are the drivers and outlook there. Thank you.
Zafar Rizvi: Thank you. I think we cautiously see that the ethanol margins are still very positive, and for the first, second quarter, we see it still is positive, as I mentioned in our prepared remarks, and we expect the record is expected this year, thanks to strong planting in a state like South Dakota and Illinois, and good weather so far. If this continues, it could boost our profit for the rest of the year. We are also pleased with our export at this time. Ethanol, as I mentioned previously, is approximately 19 percent up compared to last year. And also, if the dust settles with Canada and Mexico, and there is no tariff, then we believe that Trump's administration's...
Speaker Change: I think we cautiously.
Speaker Change: The ethanol margins are still very positive and the.
Speaker Change: Second quarter, we'll see it still is a positive as I mentioned in our.
Speaker Change: Our prepared remarks, and we expect a record on.
Speaker Change: As expected the CEO.
Speaker Change: Thanks to a strong client being in a state like South Dakota town, Decatur, Illinois, and good weather. So far if this continues it could boost our profit for the rest of that year. We had also pleased without exports.
Speaker Change: As I mentioned previously it's about <unk>, 19% up compared to last year and also.
Speaker Change: If the dust settled with Canada, and Mexico and there is no data then we believe that.
Speaker Change: The Trump administration's.
Speaker Change: Bill May help us to eliminate those data absolutely no different countries, which they have on ethanol, our Dvds and if that market open up we believe that will be a great photo ethanol industries, but on the same time, we're cautiously looking at natural gas if natural gas is.
Zafar Rizvi: They may help us to eliminate those tariffs on the different countries which they have on ethanol or DDG. And if that market opens up, we believe that will be great for ethanol industries. But at the same time, we're cautiously looking at natural gas. If natural gas is exported greater than we expect, then it can be negatively affected on our business. But because natural gas and coal and those are the major expenses we have in our ethanol business. So we are monitoring very closely, but we believe at this time there is a positive outlook toward to 2025.
Speaker Change: Export is greater than we expect then it can be negatively effected on our business, but because natural gas.
Speaker Change: And those are the major expenses, we have in our ethanol business. So we are monitoring very closely but we believe that this time that is a positive outlook.
Speaker Change: 2025.
Speaker Change: Okay. Thank you very much appreciate it I'll get back in the queue.
Peter Destreich: Thank you very much. I appreciate it. I'll get back in the queue. Thank you.
Speaker Change: Thank you.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Thank you there are no further questions at this time I'd like to turn the call back to Stuart Rose for closing remarks.
Operator: There are no further questions at this time.
Stuart Rose: I'd like to turn the call back to Stuart Rose for closing. I'd like to thank everyone for listening, and again we feel we have among the best plants in the industry. We have great locations in the Corn Belt. We have what we feel is the best technology, but most importantly, as I said during the call, we, in my opinion, have the best people in the industry, and that's what sets us apart. We have very, very high hopes that these same people and the other people that we've hired will do the exact same thing in carbon capture that we've done in ethanol.
Speaker Change: Okay.
Stuart Rose: Thank you everyone for listening again, we feel we have among the best plants in the industry, we have great locations in the corn belt.
Stuart Rose: What we feel is the best technology, but most importantly, as I said during the call.
Speaker Change: In my opinion, they have the best people in the industry and that's what sets us apart and we have very very high hopes that these same people in the other people that we've hired.
Speaker Change: Same thing in carbon capture that we've done in ethanol very much look forward to the future. Thank you every much for listening and we'll talk to you at the end of the conference.
Stuart Rose: I very much look forward to the future.
Stuart Rose: Thank you very much for listening, and we'll talk to you at the conference call for next quarter. Thank you. Bye.
Speaker Change: The conference call for next quarter. Thank you.
Speaker Change: Yeah.
Operator: This concludes today's conference, you may disconnect your lines at this time. Enjoy the rest of the day.
Speaker Change: This concludes today's conference you may disconnect your lines at this time and enjoy the rest of your day.
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