Highwater Ethanol Reports Sharp Turnaround in Profitability
Highwater Ethanol LLC (HEOL) has reported a sharp turnaround in profitability for the nine months ended July 31, 2026. The company's revenue was $111.9 million, with ethanol sales up 7.6% and corn oil revenue up 29.0% versus the prior-year period.
The cost of goods sold fell as average corn cost per bushel declined 9.8%, lifting gross margin to 15.61% of revenue from 3.85%. The company recognized $11.7 million of Section 45Z tax credits and sold $14.3 million of 2025 credits, helping net income rise to $24.8 million from $1.2 million.
Cash increased to $34.9 million with no long-term debt and $30 million of undrawn credit capacity. Highwater plans about $12.1 million of efficiency-focused capital projects and has applied to increase its permitted ethanol production, while cautioning that earnings are sensitive to commodity volatility, Middle East conflict impacts on energy prices, and the temporary nature of Section 45Z incentives.