Houston — Green Plains' $6.2 million fourth-quarter 2017 net loss was driven by a lower consolidated crush margin and certain spikes in operating costs, the ethanol producer's CEO, Todd Becker, said Thursday. "We came into the quarter partially hedged but physical markets reached multi-year lows. What would trade 10-12 cents under [the paper market] saw days as low as 17 cents under," Becker said during the company's fourth-quarter earnings call.
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"We saw some slippage of several pennies that we haven't experienced before this year as an entire industry."
Becker added that the company's consolidated crush margin for the year was 10 cents/gal. That was its second-lowest year ever, with the lowest occurring in 2012 when the consolidated margin was 9 cents/gal.
Operating costs were streamlined overall, Becker said, but some outliers caused spikes.
The company acquired three plants in September that raised operating expenses.
"It can take 1.5-two years to get a plant in line with our other plants," Becker said, referring to aligning plants' operating expenses with the rest of the company.
Green Plains also plans to upgrade efficiency at its Madison, Illinois, ethanol plant.
"The Madison, Illinois, plant is an outlier [in operating costs]. We plan to convert the plant from batch production to continuous," Becker said.