REX American Resources Corporation (REX) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals strong financial performance with significant increases in net income and EPS driven by 45Z tax credits. The expansion and carbon capture initiatives, despite some uncertainties, suggest future growth. The Q&A indicates optimism about continued tax credits and strong ethanol demand, though some lack of clarity on carbon capture impact. Overall, the positive financial results and future growth prospects outweigh the uncertainties, leading to a positive sentiment.
Key Financial Performance
Ethanol Sales Volume 290 million gallons in fiscal year 2025, a slight increase from 289.7 million gallons in fiscal year 2024. The increase was driven by strong export demand and favorable industry conditions.
Ethanol Sales Volume (Q4) 70.1 million gallons in Q4 2025, a decrease from 74.6 million gallons in Q4 2024. The decrease was not explicitly explained.
Average Selling Price of Ethanol $1.74 per gallon for fiscal year 2025 and $1.72 for Q4 2025. No year-over-year comparison provided.
Dried Distiller Grain Sales Volume 612,000 tons in fiscal year 2025, a 3% decrease from 632,000 tons in fiscal year 2024. The reason for the decrease was not explicitly mentioned.
Dried Distiller Grain Sales Volume (Q4) 151,000 tons in Q4 2025, a 9% decrease from Q4 2024. The reason for the decrease was not explicitly mentioned.
Modified Distiller Grain Sales Volume 81,900 tons in fiscal year 2025, an increase from 70,000 tons in fiscal year 2024. The increase was not explicitly explained.
Modified Distiller Grain Sales Volume (Q4) 19,700 tons in Q4 2025, a 1% increase from Q4 2024. The increase was not explicitly explained.
Corn Oil Sales Volume 97 million pounds in fiscal year 2025, a 10% increase from 88.1 million pounds in fiscal year 2024. The increase was not explicitly explained.
Corn Oil Sales Volume (Q4) 25.2 million pounds in Q4 2025, a 7% increase from Q4 2024. The increase was not explicitly explained.
Average Selling Price of Corn Oil $0.54 per pound for fiscal year 2025 and Q4 2025. No year-over-year comparison provided.
Gross Profit $93.7 million in fiscal year 2025, an increase from $91.5 million in fiscal year 2024. The increase was driven by improved ethanol pricing and reduced corn costs.
Gross Profit (Q4) $28.9 million in Q4 2025, an increase from $17.6 million in Q4 2024. The increase was driven by improved ethanol pricing and reduced corn costs.
SG&A Expense $32.6 million in fiscal year 2025, an increase from $27.1 million in fiscal year 2024. The increase was primarily due to increased incentive bonuses based on company profitability levels.
SG&A Expense (Q4) $12.3 million in Q4 2025, an increase from $6.2 million in Q4 2024. The increase was primarily due to increased incentive bonuses based on company profitability levels.
Interest and Other Income $15 million in fiscal year 2025, a decrease from $19.2 million in fiscal year 2024. The decrease was not explicitly explained.
Interest and Other Income (Q4) $4.5 million in Q4 2025, an increase from $4.2 million in Q4 2024. The increase was not explicitly explained.
Income Before Taxes and Noncontrolling Interest $88.6 million in fiscal year 2025, a 5% decrease from $92.9 million in fiscal year 2024. The decrease was not explicitly explained.
Income Before Taxes and Noncontrolling Interest (Q4) $27.4 million in Q4 2025, an increase from $17.9 million in Q4 2024. The increase was not explicitly explained.
Net Income Attributable to REX Shareholders $83 million in fiscal year 2025, an increase from $58.2 million in fiscal year 2024. The increase was driven by the recognition of approximately $28 million in 45Z tax credits.
Net Income Attributable to REX Shareholders (Q4) $43.7 million in Q4 2025, an increase from $11.1 million in Q4 2024. The increase was driven by the recognition of approximately $28 million in 45Z tax credits.
Diluted Net Income Per Share $2.50 per share in fiscal year 2025, an increase from $1.65 per share in fiscal year 2024. The increase was driven by the recognition of approximately $28 million in 45Z tax credits.
Diluted Net Income Per Share (Q4) $1.32 per share in Q4 2025, an increase from $0.31 per share in Q4 2024. The increase was driven by the recognition of approximately $28 million in 45Z tax credits.
Total Cash, Cash Equivalents, and Short-Term Investments $375.8 million at fiscal year-end 2025, an increase from $359.1 million at fiscal year-end 2024. The increase was primarily due to cash from operations, offset by capital expenditures related to the plant expansion project.
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Operating Highlights
Ethanol Sales Volume: Reached record levels in 2025, driven by strong export demand and favorable industry conditions.
Capacity Expansion: Significant progress on capacity expansion at the One Earth Energy facility, nearing completion, increasing annual production capacity to 200 million gallons.
Carbon Capture and Storage: Continued work on carbon capture and storage initiative at the One Earth facility to reinforce sustainability and long-term value creation.
Export Demand: Strong export demand for ethanol characterized 2025 and is expected to continue into 2026.
Global Demand for Lower Carbon Fuel: Growing global demand for lower carbon fuel and increased fuel blending supports market expansion.
Operational Excellence: Demonstrated resilience and scalability of the business model, maintaining leadership position in the industry.
Financial Performance: Reported record EPS for fiscal 2025, with strong financial results driven by operational efficiency and market expertise.
Cost Management: Fourth quarter benefited from improved ethanol pricing and reduced corn costs, the two largest drivers of gross profit.
45Z Tax Credit: Successfully positioned to capitalize on the 45Z tax credit program, with carbon intensity scores below the required threshold.
Carbon Capture Facility: Awaiting permitting for Class VI well and associated carbon dioxide connector pipeline, with potential for higher-tier credits.
Policy Environment: Monitoring developments related to year-round E15 blending, which could drive incremental ethanol demand.
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Risk or Challenges
Carbon Capture and Sequestration Permitting Delays: The carbon capture and sequestration projects are awaiting permits from the EPA and Illinois Commerce Commission, which could delay the project's completion and associated financial benefits.
SG&A Expense Increase: The SG&A expenses increased significantly in fiscal year 2025, primarily due to incentive bonuses tied to profitability, which could impact overall profitability if not managed effectively.
Decline in Dried Distiller Grain Sales Volumes: Dried distiller grain sales volumes decreased by 3% in fiscal year 2025 compared to 2024, and by 9% in the fourth quarter, which could affect revenue from this product line.
Dependence on 45Z Tax Credit Program: The company's financial performance is increasingly tied to the 45Z tax credit program. Any changes in policy or delays in carbon capture projects could impact the benefits derived from this program.
Commodity Pricing Volatility: The company operates in a dynamic commodity pricing environment, which could adversely affect profitability if input costs like corn increase or ethanol prices decline.
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Guidance & Outlook
Capacity Expansion: The One Earth Energy facility's capacity expansion project is nearing completion, expected to increase annual production capacity to 200 million gallons. Testing and commissioning are anticipated to begin soon, with full operational status expected in fiscal 2026. This expansion aims to capture greater market share and benefit from strong export demand.
45Z Tax Credit Program: The company has positioned itself to capitalize on the 45Z tax credit program, with carbon intensity scores below the required threshold. Future benefits are expected to increase with the completion of the carbon capture facility, which will further reduce carbon intensity scores and qualify for higher-tier credits.
Carbon Capture and Storage Initiative: The carbon capture and sequestration project at the One Earth facility is progressing, with permitting processes ongoing. This initiative is expected to enhance sustainability and financial benefits under the 45Z tax credit program.
Ethanol Export Demand: Ethanol export demand remains strong, with expectations for continued growth in 2026 due to global demand for lower carbon fuels, increased fuel blending, and the cost competitiveness of U.S. production.
Market Conditions and Input Costs: Corn supplies are expected to remain favorable, supporting manageable input costs and healthy gross margins in 2026.
Policy Environment: The policy environment, including the 45Z tax credit program and potential year-round E15 blending, is expected to provide meaningful benefits and drive incremental ethanol demand.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:What is the $28 million related to 45Z, and how should we think about its future run rate?
A:The $28 million is for the full fiscal year of 2025, and the 45Z tax credits are expected to continue through 2029. If the carbon capture project is completed, it will significantly increase the amount of 45Z credits.
Q:Can you disclose how much the CCS project would improve your CI score?
A:The company has not disclosed this publicly but mentioned that the improvement would be significant.
Q:What is the status of the Class VI injection permit and the Illinois pipeline moratorium?
A:The permit's expected finalization has been moved to September on the EPA website. The company is in the final stage of technical review and has provided all requested documents to the EPA. Regular meetings with the EPA are ongoing.
Q:How are tariffs and the geopolitical situation impacting operations for ethanol and corn oil?
A:There is no impact on ethanol exports, and exports have been strong, with Canada importing approximately 792 million gallons. High oil prices are beneficial for the ethanol business both domestically and internationally.
Q:What is the per gallon recognition for 45Z credits, and are there opportunities for increased credits?
A:The recognition is approximately $0.10 per gallon. The carbon capture facility, once completed, could reduce the CI score by 30 to 35 points, potentially increasing credits. Achieving $1 per gallon is possible at the One Earth Energy location after construction completion.
Q:Is the company more optimistic about carbon capture being operational in 2026?
A:The carbon capture facility is complete, but operational status depends on permits from EPA, IEPA, and ICC. The company does not expect to capture 45Z credits due to carbon capture in 2026.
Q:What are the thoughts on the possibility of a nationwide E15 adoption?
A:Nationwide E15 adoption is unlikely due to the influence of oil companies. However, more independent retailers are expected to adopt E15 pumps, benefiting consumers and retailers.
Q:Review of Unclear Management Responses
A:The company avoided providing a direct answer regarding the specific improvement in CI score from the CCS project, stating only that it would be significant.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
American bank
CEO detail
CFO result
Chairman Chief
Commission process
Development today
EPA Illinois
Earth ethanol
Instructions Mr
REX Volumes
REX corn
REX ethanol
REX facility
REX recognition
Resources aspect
Resources progress
Rose Executive
Rose REX
SGA expense
SGA increase
Treasurer result
ability
capacity expansion
capacity gallon
commodity
completion
credit benefit
environment
export demand
grain ton
income share
industry condition
level
period
pound increase
price distiller
pricing
progress capacity
project Earth
share income
statement Rose
today Rose
ton decrease
volume pound
REX Transcript
REX American Resources Corporation (REX) Q4 2025 Earnings Call Transcript
Positive3-26
The earnings call reveals strong financial performance with significant increases in net income and EPS driven by 45Z tax credits. The expansion and carbon capture initiatives, despite some uncertainties, suggest future growth. The Q&A indicates optimism about continued tax credits and strong ethanol demand, though some lack of clarity on carbon capture impact. Overall, the positive financial results and future growth prospects outweigh the uncertainties, leading to a positive sentiment.
REX American Resources Corporation (REX) Q4 2026 Earnings Call Transcript
Positive3-26
The earnings call and Q&A indicate positive sentiment, driven by increased net income, improved gross profit, and promising future tax credits. The strategic expansion plans and anticipated record ethanol exports add to the optimism. Despite some uncertainties, such as the CCS project's impact and regulatory timelines, the overall outlook is positive due to strong financial performance and future growth prospects.
REX American Resources Corporation (REX) Q3 2025 Earnings Call Transcript
Unknown12-5
The earnings call presents mixed signals: while there's optimism about ethanol production expansion and potential record exports, financial metrics show declines in gross profit and net income. The Q&A reveals uncertainties in tax credits and partnerships, impacting sentiment. Positive elements include increased ethanol sales volume and strong cash reserves. However, lower selling prices and unclear guidance on tax credits and partnerships temper enthusiasm. Considering these factors, along with the lack of market cap data to gauge stock volatility, the stock price is likely to remain stable in the short term, resulting in a neutral rating.
REX American Resources Corporation (REX) Q3 2026 Earnings Call Transcript
Unknown12-4
Despite some positive elements like increased ethanol sales volumes and a promising strategic plan for expansion, there are significant uncertainties, particularly around the 45Z tax credits and declining distiller grain sales. The Q&A revealed management's lack of clarity on key issues, which may cause investor concerns. The overall financial performance shows mixed results, with a slight decrease in net income but an increase in earnings per share. These factors combined suggest a neutral impact on the stock price.
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