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ADM profits surge on rising processing margins

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Agribusiness giant Archer Daniels Midland reported surging profits, thanks to rising margins from its corn and oilseed processing segments.

Net profit attributable to the company rose to $339 million, up 47% year-on-year, over the three months to March 31.

Revenues rose by some 4% over the same period, to $14.99bn.

The company's adjusted net-profit came in at 60 cents per share, missing analyst estimates by some 2 cents.

Wider margins

ADM profits were driven by higher margins and volumes in its grain processing businesses.

The company's total processed volumes rose to 14.4m tonnes, over the period.

Oilseed processing, the company's most profitable segment, saw increased margins, particularly in seeds other than soybeans, with total profits up 20% at $313m.

"Softseeds results were significantly higher than the previous year, as we took advantage of our softseed processing footprint and flex capacity to capitalize on margin opportunities both in North America and Europe," ADA said.

But results from soybean crushing were limited by a "competitive" protein meal market, as well as slower crushing in South America, where farmers are proving reluctant to sell their current crop.

Rising corn profits

Profits from the company's corn processing segment rose 35% year-on-year, to $177m.

"Sweeteners and starches delivered a strong performance on improved domestic demand and higher volumes and margins from the European business," ADM said.

Ethanol earnings were also up, thanks to "very strong exports and improved margins".

Profits from the company's agricultural services segment also ticked up, to $81m, thanks to a 5% rise in sales to $6.81m.

"In Merchandising and Handling, North America grain showed better results, with improving grain carries and good execution volumes amid strong global demand for US commodities," ADM said.

By William Clarke

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