A brace of boosts from oilseeds lifted Archer Daniels
Midland earnings despite a third successive quarter of losses at its ethanol division,
which was sapped by "weak" US demand and "unfavourable" trade flows.
The agribusiness giant, one of the world's top crop traders,
unveiled a sixfold jump to $510m in earnings for the October-to-December period.
While the earnings improvement, on revenues up 6.9% at
$24.9bn, was flattered by a series of one-off charges depressing year-before
results, even excluding one-time items earnings per share rose to $0.60, from
$0.51 a year before, and ahead of Wall Street expectations of a $0.57-a-share
"The ADM team managed well despite the challenges from the US
drought and from persistent, negative margins in the ethanol industry,"
Patricia Woertz, the ADM chairman and chief executive, said.
Corn vs soybeans
The group's ethanol division ratcheted up an operating loss
of $94m, thanks to high corn prices at a time of subdued US demand and a slide
in foreign orders, following the recovery last year in Brazil's cane crop, the
raw material for the South American country's production of the biofuel.
"Weak domestic gasoline demand and unfavourable global
ethanol trade flows resulted in continued excess industry capacity, keeping
ethanol margins negative," ADM said.
The US last month recorded its lowest weekly ethanol production figure since records began in 2010.
However, the group's US soybean operations milked the strong processing
margins – of roughly $2.0 per bushel on Morgan Stanley estimates - which drove
the American crush to one of its strongest quarters on record in the
The December crush, at 159.9m bushels according to industry
data, was the second largest on record for the month.
ADM said its US soybean operations "ran at record capacity
during the quarter and delivered very strong results amid good domestic and
export meal demand".
'Solid' soy exports
Group oilseed processing volumes in the quarter rose more
than 200,000 tonnes, to 8.4m tonnes.
And "solid" US soybean exports allowed the group to unveil a
22% rise to $129m in operating profits from its merchandising and handling
operation, despite a dent to the division from America's drought-depleted corn
harvest last year and a subsequent drop in export volumes.
The comments come the day after official data showed US
soybean exports topping 1.0m bushels for in first five months of 2012-13 –
leaving them less than 350m bushels short of the total the US Department of
Agriculture has forecast for the whole season.
While lower Mississippi river levels presented "challenges"
to transporting crops from the US interior to Gulf of Mexico ports, "increased
barge operating expenses were partially offset by higher freight rates",
limiting to $5m a decline in operating profits from transportation.
Ms Woertz said: "In North America, we fully utilized our
oilseeds crushing capacity to meet strong global demand, and we adjusted our
transportation and origination network to move goods efficiently despite
constrained river traffic and a smaller corn crop."
Meanwhile, in South America, the group had "leveraged our
origination, transportation and export facilities to move the record corn crop
to world markets".
Brazil's corn exports topped 10.0m tonnes during the quarter
– less than 1m tonnes short of shipments for the whole of 2007 which had, until
2012, been the record year.
ADM shares closed 3.3% higher at $29.38 in