REX American Resources Corporation Q2 2026 Earnings Call Summary

Moby Intelligence

Wed, September 2, 2026 at 3:30 PM GMT+3 3 min read

REX American Resources Corporation Q2 2026 Earnings Call Summary - Moby

Strategic Performance Drivers

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Achieved the highest second-quarter net income per share in company history, driven by disciplined margin management and favorable market tailwinds.
Gross profit growth of 144% year-over-year, excluding tax credits, was primarily fueled by significantly stronger crush margins and improved pricing across the product mix.
The 45Z production tax credit program contributed $18.4 million to gross profit this quarter, totaling $26 million year-to-date.
Operational success is attributed to the strategic location of plants in high-yield corn areas and the utilization of industry-leading technology.
Management maintains a debt-free balance sheet with $380 million in cash and short-term investments to internally fund all major growth initiatives.
Higher SG&A expenses were intentionally incurred as incentive compensation tied directly to the company's record financial performance.

Growth Initiatives and Outlook

Management anticipates third-quarter results will exceed the prior year's performance, with expectations to remain profitable in the near term.
The One Earth facility expansion remains on schedule to bring additional ethanol production capacity online before the end of 2026.
The carbon capture and sequestration project is expected to further improve carbon intensity scores, potentially increasing the future value captured under the 45Z program.
Future capital allocation will focus on internal growth projects, opportunistic share buybacks during market dips, and potential acquisitions of ethanol plants or related businesses.
The company plans to submit applications for a five-mile connector pipeline and required state permits following the expiration of the Illinois carbon sequestration moratorium.

Regulatory and Structural Developments

Received draft Class VI injection well permits from the US EPA in August, marking a major regulatory milestone for the carbon capture project.
The Illinois moratorium on carbon sequestration expired on July 1, allowing the company to proceed with state-level permitting and rulemaking processes.
Total investment in ethanol expansion and carbon capture projects reached $191 million by the end of the second quarter.
Management identified the approval of the five-mile pipeline connector by the Illinois Commerce Commission as a potential primary timeline constraint for the carbon capture project.

Q&A Session Summary

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Production capacity scaling and timeline at One Earth facility

Management is following a step-by-step permitting process, currently producing approximately 150 million gallons with a goal of 175 million next.
The company expects to reach a production level close to 200 million gallons by early or middle of next year, pending Illinois EPA requirements.

Impact of RIN credit exemptions on ethanol demand

Management expects some impact on RINs but does not anticipate a major impact on ethanol sales due to strong export demand, which rose 13% in the first half of the year.
Optimism remains high regarding domestic consumption increases, specifically citing California's expected approval of E15.

Third-party utilization of carbon sequestration capacity

The company will have significant excess capacity in its wells and is open to third-party projects like direct air-to-CO2.
While open to partnerships, management is currently prioritized on getting its own project operational to maximize 45Z tax benefits.