Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from the line of Steve Sanders with Stephens Incorporated.
Trey -- Stephens Incorporated
Good morning
This is Trey [ph] for Steve. First, in the release, you noted that the Energy segment was breakeven for the month of June. How shall we be thinking about that going forward and if you think this breakeven, I guess slight profitability is sustainable going forward? What assumptions are you baking in terms of pricing, demand, et cetera, just anything you can give there would be helpful.
Kirk Benson
I think there is – in the Energy segment there is – there are four components that impact the EBITDA, operating income of that segment. The most important component is coal cleaning. And we have made significant progress in the coal cleaning business, reducing our fixed cost and changing the cost structure of the coal cleaning business. We are also starting to see some indication that there is improved interest in purchasing our coal. So, if we were able to operate that part of the business in the range of breakeven, that bodes very well of course for the entire segment, because to a large degree this segment is going to be impacted most significantly by coal cleaning. And I think we’ve got a fairly good chance of operating that segment close to breakeven in the September quarter. Bill, do you want to add something to that on coal cleaning?
Bill Gehrmann
Yes. I think obviously one thing – a couple of things that we have done and Kirk has addressed some is obviously our fixed cost structure and we will continue to work on that, but on the marketing side the top line side of that business, obviously we’ve had a couple of additional quarters to learn to operate these plants. We’ve shown significant improvement in the quality of the material in relation to ash content. That overcomes some of the potential stigmas of the fines in the marketplace. And on top of that, we have gone out and had several substantial sales of fines only coal, which we’ve proven the ability for not only ourselves, but transporters and end-users to handle these fines-only shipments. So, I think that bodes well for the coal-cleaning business in the future.
Kirk Benson
The second thing that’s important in that segment is the ethanol plant. We anticipate that it will produce positive operating income in the September quarter. The third thing is the hydrogen peroxide plant in South Korea. It’s been operating profitability, but you also have the added risk from an operating income perspective of foreign currency exchanged gains or loses. So – and that’s something that has been a material factor and so that – and that’s a little bit difficult for us to predict what’s going to happen from a foreign currency exchange perspective. But the facility itself has been operating profitably.
- To read the full transcript on Seeking Alpha, click here »
