The Andersons’ Q2 profit plunges 78% as company doubles down on ethanol
While its second-quarter net income dropped compared to last year, The Andersons is looking to grow earnings through investment in ethanol.
USA – Agribusiness giant The Andersons, Inc. has reported a sharp earnings drop for the second quarter, with net income falling to US$8 million, down 78% from US$36 million a year earlier.
Despite the steep decline, the Ohio-based company is pressing ahead with growth plans, led by a major expansion in its ethanol business.
The Andersons has acquired the remaining ownership interest in The Andersons Marathon Holdings LLC (TAMH), giving it full control of the ethanol producer.
The US$425 million deal (net of working capital) doubles the company’s financial stake in the ethanol sector, a core pillar of its Renewables strategy.
“This transaction doubles our financial ownership in the ethanol industry, a key growth pillar within our Renewables strategy. Importantly, we currently operate the four plants with Andersons employees, thus limiting our execution risk,” said Bill Krueger, president and CEO.
According to Krueger, the acquisition is attractive from a financial perspective and the company expects immediate accretion in earnings per share. These production facilities are poised to further benefit from increased support for renewable fuels.”
The Agribusiness segment posted pretax income of US$19 million, down from US$29 million in Q2 2024, while adjusted pretax income attributable to the company fell to US$17 million from US$33 million.
Nutrient results improved year-on-year on strong nitrogen demand, driven by higher U.S. corn plantings, but oversupply in western grain markets kept prices low. The Andersons expects a large harvest and limited on-farm storage capacity to create attractive grain merchandising opportunities later in 2025 and into 2026.
In the Renewables segment, pretax income fell to US$17 million, with US$10 million attributable to the company, compared with US$39 million and US$23 million, respectively, a year earlier.
While ethanol plants achieved higher yields and production, margins were pressured by lower board crush, higher eastern corn basis, increased natural gas costs, and weaker co-product values due to an oversupply of soybean meal. With the TAMH deal, all earnings from the ethanol plants will now be consolidated into The Andersons’ results.
The company is also investing in long-term growth projects, including its Houston port facility, slated for completion by mid-2026. The site will boost grain handling efficiency and U.S. soybean meal export capacity, potentially benefiting from changes to the Environmental Protection Agency’s renewable volume obligations.
Krueger noted that the company has completed a successful wheat harvest and is preparing for a near-record U.S. corn crop this fall, which is expected to create merchandising opportunities well into 2026.
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