The Andersons: record Renewables quarter and 45Z credits, but revenue keeps declining

On August 3, 2026, The Andersons reported results for the second quarter of 2026. Net income reached $56.6 million, up 619.9% year-over-year, driven by record Renewables segment profit and 45Z tax credits. EBITDA rose 142.2% to $84.6 million, but revenue declined 1.2% to $3,097.7 million. At the current price, the share looks rather unattractive: multiples are above historical levels, and the portal's model implies 16% downside.

Key takeaways

— Renewables delivered record quarterly profit thanks to 45Z credits and strong crush margins

— Revenue declines for the second consecutive quarter, but EBITDA and profit grow on Renewables strength

— Net income includes one-off items, without which growth would have been more modest

— Operating cash flow strong in Q2, but negative in H1 due to seasonality

— Leverage at 1.9x EBITDA, below the company's target level

— Stock trades at a premium to its own history, and the portal's model implies downside

Attractiveness

Key figures, USD bn

Renewables delivered record quarterly profit thanks to 45Z credits and strong crush margins

In Q2 2026, the Renewables segment generated $88.4 million of adjusted pretax income versus $9.6 million a year earlier. The company attributes the result to record plant production, successful merchandising, and 45Z tax credits, which contributed $24 million in the quarter.

Strong board crush margins were supported by robust ethanol export demand and healthy domestic consumption. Merchandising businesses also benefited from market volatility following the RVO finalization, lifting distillers corn oil and RIN values. Renewables was the main driver of the company's profit growth.

Revenue declines for the second consecutive quarter, but EBITDA and profit grow on Renewables strength

In Q2 2026, revenue was $3,097.7 million, down 1.2% year-over-year. This is the second consecutive quarterly decline: in Q1 2026, revenue also fell 1.2%. The decline is mainly attributable to the Agribusiness segment, where sales dropped from $2,414.8 million to $2,113.1 million, partially offset by Renewables growth from $721.0 million to $984.6 million.

Despite the revenue decline, EBITDA rose 142.2% to $84.6 million, and net profit increased 619.9% to $56.6 million. The growth was almost entirely driven by Renewables, where EBITDA jumped from $30.2 million to $102.6 million (adjusted). Agribusiness also improved, but more modestly: adjusted EBITDA rose from $46.4 million to $52.9 million.

Net income includes one-off items, without which growth would have been more modest

Net income in Q2 2026 was $56.6 million, but it included one-off items. Adjusted net income, per the company's calculation, was $73.6 million, meaning one-off items were net negative: notably, legal settlement expenses ($12.8 million), asset impairment ($15.7 million), partially offset by insurance recoveries ($6.7 million).

Without these items, profit growth would have been less impressive but still significant: adjusted profit rose from $8.4 million to $73.6 million, nearly ninefold. Still, investors should note that part of the quarterly profit is non-recurring.

Operating cash flow strong in Q2, but negative in H1 due to seasonality

In Q2 2026, operating cash flow was $487.9 million versus $299.3 million a year earlier. However, for H1 2026, it is negative: an inflow of $94.2 million versus an outflow of $50.7 million in H1 2025. This reflects seasonality: in Q1, the company builds inventories ahead of the spring season, causing an outflow.

Capital expenditures in Q2 were $75.6 million, and for H1 – $127.3 million. Free cash flow for H1 is negative, but the company pays dividends: $13.6 million paid in H1. Trailing twelve-month dividend yield is 1.13%.

Leverage at 1.9x EBITDA, below the company's target level

At the end of Q2 2026, net debt stood at $519.9 million, and the net debt to EBITDA ratio for the trailing twelve months was 1.9. This is below the company's target of 'less than 2.5' and, according to the CFO, leaves room to finance the growth strategy.

During the quarter, net debt decreased by $0.7 billion RUB (converted), but over 12 months it increased by $0.1 billion RUB. Interest expense in Q2 was $15.6 million, up from $11.5 million a year earlier, reflecting higher debt levels during the period.

Stock trades at a premium to its own history, and the portal's model implies downside

Current multiples: P/E LTM – 15.4, EV/EBITDA LTM – 10.8. These values look high for a company with declining revenue and a significant share of one-off income. The company's own history (three-year average) is not available in the facts, but the portal's model, which re-prices EBITDA at current commodity prices, shows the share's potential downside to fair value of 16%.

Since the earnings release, the stock has declined 2.1% (as of September 4, 2026), and on the release day it fell 1.3%. Market capitalization is $2,419.6 million, ROE – 17.5%.

Valuation on the latest reported figures

Bottom line

The quarter was strong thanks to record Renewables profit and 45Z tax credits, which drove significant growth in EBITDA and net income. However, revenue has been declining for two consecutive quarters, and a significant portion of profit is non-recurring. At current multiples (P/E 15.4, EV/EBITDA 10.8) and the portal's model implying 16% downside, the share looks rather unattractive. A reassessment would require sustained revenue growth and confirmation that Renewables' high margin persists excluding one-off items.