Confident Investing Starts With TipRanks Premium

Get 55% Off
TipRanks
Go Ultimate55% OFF

Southwest Iowa Renewable Energy (SWIOU) Risk Analysis

Public companies are required to disclose risks that can affect the business and impact the stock. These disclosures are known as “Risk Factors”. Companies disclose these risks in their yearly (Form 10-K), quarterly earnings (Form 10-Q), or “foreign private issuer” reports (Form 20-F). Risk factors show the challenges a company faces. Investors can consider the worst-case scenarios before making an investment. TipRanks’ Risk Analysis categorizes risks based on proprietary classification algorithms and machine learning. Southwest Iowa Renewable Energy disclosed 32 risk factors in its most recent earnings report. Southwest Iowa Renewable Energy reported the most risks in the “Production” category.

Risk Overview Q1, 2023

Risk Distribution
32Risks
Sector Avg.Finance & CorporateTech & InnovationLegal & RegulatoryProductionAbility to SellMacro & Political
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Risk Change Over Time

Southwest Iowa Renewable Energy disclosed risks per quarterNo. of Risks32Q3Q4Q12023Showing: Q3, 2022
Risks removedRisks addedRisks changedSouthwest Iowa Renewable Energy Risk Factors
Risk Removed (1)New Risk (3)
  • Environmental / Social - Risk 1
    The California Low Carbon Fuel Standard may decrease demand for corn based ethanol limit access to the California market which could negatively impact our profitability.

    California passed the Low Carbon Fuels Standard ("LCFS") which requires that renewable fuels used in California must accomplish certain reductions in greenhouse gases which reductions are measured using a lifecycle analysis. Fuels entering California must meet the LCFS carbon-intensity lifecycle requirements before being sold and consumed in California.  These LCFS regulations could preclude corn-based ethanol produced in the Midwest from being used in California. California represents a significant ethanol demand market and if we are unable to meet the requirements of the LCFS, we will be unable to sell our products into the California market which could result in a reduction of our revenues and negatively impact our ability to profitably operate the ethanol plant. Other states and countries, including Oregon, Brazil and Canada have adopted similar LCFS regulations which could further negatively impact the market and demand for conventional corn based ethanol, depending on how the regulations are crafted, enforced and modified which could further adversely impact our operating performance if we are unable to access such markets.

Read and Evaluate the RiskReserved for Ultimate MembersUpgrade

Risk Highlights Q1, 2023

Main Risk Category
Production
With 8 Risks
Number of Disclosed Risks
32
No changes from last report
S&P 500 Average: 32
Recent Changes
0Risks added
0Risks removed
0Risks changed
Since Mar 2023
Number of Risk Changed
0
No changes from last report
S&P 500 Average: 1

Risk Word Cloud

depending on commodity prices, foreign producers may produce ethanol at a lower cost than we can, which may result in lower ethanol prices which would adversely affect our financial results.adversely affect our financial resultschanges and advances in ethanol production technology could require us to incur costs to update our facility or could otherwise hinder our ability to compete in the ethanol industry or operate profitably.hinder our ability to competethe california low carbon fuel standard may limit access to the california market which could negatively impact our profitability.california low carbon fuel standardwe are subject to extensive environmental regulation and operational safety regulations that impact our expenses and could reduce our profitability.subject to extensive environmental regulationcarbon dioxide may be regulated by the epa in the future as an air pollutant, requiring us to obtain additional permits and install additional environmental mitigation equipment, which may adversely affect our financial performance.install additional environmental mitigation equipmany site near a major waterway system presents potential for flooding risk.major waterway system presents potentialour units have no public trading market and are subject to significant transfer restrictions which could make it difficult to sell units and could reduce the value of the units.subject to significant transfer restrictionswe may experience delays or disruption in the operation of our rail line and loop track, which may lead to decreased revenues.operation of our rail lineadverse weather conditions, including as a result of climate change, may adversely affect the availability, quality and price of raw materials required for our operations as well as our operations and operating results.price of raw materials requiredinflation may impact the cost and/or availability of materials, inputs and labor, which could adversely affect our operating results.adversely affect our operating results

Risk Factors Full Breakdown - Total Risks 32

Manufacturing3 | 9.4%
  • Manufacturing - Risk 1
    Changes and advances in ethanol production technology could require us to incur costs to update our Facility or could otherwise hinder our ability to compete in the ethanol industry or operate profitably.

    Advances and changes in the technology of ethanol production are expected to occur.  Such advances and changes may make the ethanol production technology installed in our plant less desirable or obsolete.  These advances could also allow our competitors to produce ethanol at a lower cost than us.  If we are unable to adopt or incorporate technological advances, our ethanol production methods and processes could be less efficient than our competitors, which could cause our plant to become uncompetitive or completely obsolete.  If our competitors develop, obtain or license technology that is superior to ours or that makes our technology obsolete, we may be required to incur significant costs to enhance or acquire new technology so that our ethanol production remains competitive.  Alternatively, we may be required to seek third-party licenses, which could also result in significant expenditures.  We cannot guarantee or assure that third-party licenses will be available or, once obtained, will continue to be available on commercially reasonable terms, if at all.  These costs could negatively impact our financial performance by increasing our operating costs and reducing our net income.

  • Manufacturing - Risk 2
    We may experience delays or disruption in the operation of our rail line and loop track, which may lead to decreased revenues.

    We have entered into the Track Agreement to service our track and railroad cars.  There may be times when we have to slow production at our ethanol plant due to our inability to ship all of the ethanol and distillers grains we produce, or getting rail cars returned on a timely basis.  Due to increased rail traffic nationally because of shipments of crude oil, rail shipment delays have been experienced from time to time, especially during severe winter conditions. Additionally, threats of railroad worker strikes have been frequently discussed. If we cannot operate our plant at full capacity, we may experience decreased revenues which may affect the profitability of the Facility.

  • Manufacturing - Risk 3
    Ethanol production is energy intensive and interruptions in our supply of energy, or volatility in energy prices, could have a material adverse impact on our business.

    Ethanol production requires a constant and consistent supply of energy.  If our production is halted for any extended period of time, it will have a material adverse effect on our business.  If we were to suffer interruptions in our energy supply, our business would be harmed.  We have entered into the Steam Contract with MidAm and we also are able to operate at full capacity using natural gas-fired boilers, which mitigates the risk of disruption in steam supply.  However, the amount of natural gas we are permitted to use for this purpose is currently limited and the price of natural gas may be significantly higher than our steam price.  In addition, natural gas and electricity prices have historically fluctuated significantly. Increases in the price of steam, natural gas or electricity would harm our business by increasing our energy costs.  The prices which we will be required to pay for these energy sources will have a direct impact on our costs of producing ethanol and our financial results.

Costs5 | 15.6%

See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.

FAQ

What are “Risk Factors”?
Risk factors are any situations or occurrences that could make investing in a company risky. The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment. They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result. It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.
How do companies disclose their risk factors?
Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process. Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”. Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report. According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.
How can I use TipRanks risk factors in my stock research?
Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing. You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector. Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements. A simplified analysis of risk factors is unique to TipRanks.
What are all the risk factor categories?
TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below. 1. Financial & Corporate Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results. Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing. Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments. Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances. 2. Legal & Regulatory Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company. Regulation – risks related to compliance, GDPR, and new legislation. Environmental / Social – risks related to environmental regulation and to data privacy. Taxation & Government Incentives – risks related to taxation and changes in government incentives. 3. Production Costs – risks related to costs of production including commodity prices, future contracts, inventory. Supply Chain – risks related to the company’s suppliers. Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls. Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation. 4. Technology & Innovation Innovation / R&D – risks related to innovation and new product development. Technology – risks related to the company’s reliance on technology. Cyber Security – risks related to securing the company’s digital assets and from cyber attacks. Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying. 5. Ability to Sell Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers. Competition – risks related to the company’s competition including substitutes. Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration. Brand & Reputation – risks related to the company’s brand and reputation. 6. Macro & Political Economy & Political Environment – risks related to changes in economic and political conditions. Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19. International Operations – risks related to the global nature of the company. Capital Markets – risks related to exchange rates and trade, cryptocurrency.