The US-listed agribusiness and grain trader Archer Daniels Midland (ADM) has reported a 34% drop in third quarter operating profits to $709m for the three months to the end of September. Pre-tax profits plummeted from over $1bn in quarter three in 2014 to $367m this year. Group revenues for the quarter were back more than 9% to $16.6bn.
ADM blamed the loss in earnings on a combination of the strength of the US dollar, ample global grain supplies particularly from South America, and very weak margins in its ethanol business.
In the wake of the results, ADM was one of the biggest fallers on the S&P500 on Tuesday as shares plunged by 10% during early trading to a low of $41.88, wiping more than $2.8bn off ADM’s market value.
Grain trading
ADM is one of the four global grain traders collectively known as the ABCDs (ADM, Bunge, Cargill, and Louis Dreyfus) and its core business it the origination, sale, transport, storage and processing of grains and oilseeds.
ADM’s agri-services division recorded an operating profit of $149m – down $5m from the same period last year. ADM chief executive Juan Luciano said that earnings were limited by lower margins and export volumes, due to the continued strength of the US dollar.
A weak Brazilian real also motivated Brazilian farmers into selling grain making US exports uncompetitive and pressuring margins.
Operating profits in ADM’s corn processing and ethanol division fell dramatically from $348m a year ago to just $131m this year. The majority of this decline resulted from the collapse in profitability in ADM’s ethanol business. Despite strong ethanol demand, high production levels due to ample grain supplies abetted in lowering industry margins significantly.
Operating profits within the group’s oilseeds division actually increased by $18m to $335m, although this did include the dispersal of assets and a windfall from hedging. The group’s flavours and ingredients division also saw an improvement in operating profits to $70m despite weakened sales to emerging markets and a strong dollar which kept inputs costs high, pressuring margins and volumes.
Read more
Currency headwinds and weak Brazilian economy taper Bunge profits
Bumper ethanol production weighs on ADM profits
The US-listed agribusiness and grain trader Archer Daniels Midland (ADM) has reported a 34% drop in third quarter operating profits to $709m for the three months to the end of September. Pre-tax profits plummeted from over $1bn in quarter three in 2014 to $367m this year. Group revenues for the quarter were back more than 9% to $16.6bn.
ADM blamed the loss in earnings on a combination of the strength of the US dollar, ample global grain supplies particularly from South America, and very weak margins in its ethanol business.
In the wake of the results, ADM was one of the biggest fallers on the S&P500 on Tuesday as shares plunged by 10% during early trading to a low of $41.88, wiping more than $2.8bn off ADM’s market value.
Grain trading
ADM is one of the four global grain traders collectively known as the ABCDs (ADM, Bunge, Cargill, and Louis Dreyfus) and its core business it the origination, sale, transport, storage and processing of grains and oilseeds.
ADM’s agri-services division recorded an operating profit of $149m – down $5m from the same period last year. ADM chief executive Juan Luciano said that earnings were limited by lower margins and export volumes, due to the continued strength of the US dollar.
A weak Brazilian real also motivated Brazilian farmers into selling grain making US exports uncompetitive and pressuring margins.
Operating profits in ADM’s corn processing and ethanol division fell dramatically from $348m a year ago to just $131m this year. The majority of this decline resulted from the collapse in profitability in ADM’s ethanol business. Despite strong ethanol demand, high production levels due to ample grain supplies abetted in lowering industry margins significantly.
Operating profits within the group’s oilseeds division actually increased by $18m to $335m, although this did include the dispersal of assets and a windfall from hedging. The group’s flavours and ingredients division also saw an improvement in operating profits to $70m despite weakened sales to emerging markets and a strong dollar which kept inputs costs high, pressuring margins and volumes.
Read more
Currency headwinds and weak Brazilian economy taper Bunge profits
Bumper ethanol production weighs on ADM profits
SHARING OPTIONS