Astec: Arkansas pellet plant on schedule, more projects planned

By Anna Simet | October 31, 2016

Due to the ability to secure and ship orders at more profitable rates, as well as favorable infrastructure and wood pellet equipment activity, Astec Industries reported an earnings improvement of 200 percent in Q3 2016 compared to Q3 2015.

CEO Ben Brock said Astec recognized $19 million in pellet plant revenue during the quarter. Earnings per share were 30 cents per share versus in Q3 2016 compared to 10 cents per share in Q3 2015, and quarter sales increased to $247.7 million compared to $211.4 million, a 17.2 percent increase. Year-to-date sales were $828.8 million versus $768.1 million, an increase of 6.9 percent.

The $60 million Hazelhurs, Georgia, pellet plant is still in repayment, a three-line plant costing $60 million and expected to be paid for in 2017. Brock reminded callers of the $122.5 million pellet plant order announced in Q1 2016, an add-on to the $30 million Highland Pellets project in in Pine Bluff, Arkansas, that Astec recognized during Q1, bringing the total project order amount to $152.5 million. “I was able to visit the Highland site a few weeks ago, and I'm happy to report that the site looks great, and the project is on schedule,” he said. “We anticipate starting line one in November.”

On pellet plant core activity, Brock said there is ongoing activity for new projects, and Astec believes it will add a new, large order late this year or early next year, for delivery in 2017. “We believe the order will be in the range of $50 million, rather than the $80 million we mentioned on our last call,” he said. “We're also working on new projects that are in the $100 million range each. Based on what we know today, we project our pellet plant revenues will be in the range of $100 million to $125 million in 2017; this includes the remaining $45 million to $50 million that we anticipate on the Highland Pellets project….While we are optimistic that a new project will happen in the timeframe mentioned, it could always be longer than we anticipate.”