Rex: NuGen plant in South Dakota impacted by corn shortages

By Erin Voegele | December 05, 2019

Rex American Resources Corp. officials reported improving crush spreads and said its ethanol operations are currently running at a profitable rate during an earnings call held Dec. 4 to discuss fiscal third quarter financial results.

During the call, Stuart Rose, executive chairman of Rex, said both the corn supply and crush spreads have improved when compared to the previous quarter. “We are currently running at a profitable rate in ethanol and we are running at a rate that’s above last year’s corresponding quarter—and certainly above the quarter we just reported,” Rose said.

Zafar Rizvi, CEO of Rex, discussed the challenging environment the company has faced throughout 2019, including weather related problems that delayed corn planting, uncertainty over corn yields, and harvest delays. “We have struggled to obtain an adequate supply of corn at our NuGen facility in South Dakota,” he said, noting that production at the facility continues to be interrupted due to corn availability—including no operation in October. “That’s largely why we experienced loss in the ethanol segment in the third quarter of 2019,” he said, noting the only other time that happened was in the fourth quarter of 2012 as a result of drought.

Rex reported net sales and revenues of $86.7 million for the fiscal third quarter, which concluded Oct. 31, down from $123.8 million reported for the same period of last year. Gross profit for the company’s ethanol and byproducts segment was $28,000 compared to $11.3 million in the third quarter of 2018.

Rex reported a third quarter loss before income taxes and non-controlling interests of $4.9 million, up from $3.8 million in the comparable period of last year. Net loss attributable to Rex shareholders was $2.1 million, compared to a net income of $11.9 million for the third quarter of 2018. Basic and diluted net loss per share attributable to Rex common shareholders was 32 cents, compared to net income per share of $1.86 for the same period of last year.

Rex currently holds 75.2 percent ownership interest in Gibson City, Illinois-based One Earth Energy LLC, 99.5 percent ownership interest in Marion, South Dakota-based NuGen Energy LLC, 10.3 percent ownership interest in West Burlington, Iowa-based Big River Resources West Burlington LLC, 10.3 percent ownership interest in Galva, Illinois-based Big River Resources Galva LLC, 5.7 percent ownership interest in Dyersville, Iowa-based Big River United Energy LLC, and 10.3 percent ownership interest in Boyceville, Wisconsin-based Big River Resources Boyceville LLC.