Linked In
News In
Linked In

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

ADM results miss expectations, as grain trading arm takes hit

Twitter Linkedin

Food and commodity giant Archer Daniels Midland Company reported weaker-than-expected profits, thanks to falling returns from its grain trading business.

But ADM chief executive Juan Luciano struck a more upbeat tone for prospects over the next sixth months.

"After a challenging start to the year, general market conditions began to turn at the end of the second quarter, providing us with improved opportunities, said Mr Luciano.

Profits slump

Across the company, net profits slumped 26% in the three months to June 30.

This drop was driven by sharply lower profits in its grain handling and oilseed processing business, which saw earnings drop by 57% and 47% respectively.

Adjust earnings came in at 41 cents a share, below analyst estimates of 45 cents a share.

The fall in profits was driven by lower revenues, which fell 9%, to $15.63bn, below the average analyst estimate of $16.97bn.

Grain handling, oilseed crush takes hit

Earnings in the group's agricultural services segment, which includes grain merchandising and handling were down, thanks to "compressed margins across the US grain handling network," ADM said.

"Weak grain handling margins and merchandising results continued for ag services."

And in the oilseeds processing, ADM reported that "crushing and origination operating profit declined driven primarily by continued weak canola margins as well as lower soy crush margins, which were historically high last year".

But despite the lower profit margins, ADM said it "achieved record soy crush volumes in North America and Europe through increased utilization of new flex capacity".

Switch from ethanol to sweetener

The group's international grain merchandising business achieved improved results, thanks to stronger results in Argentina.

ADM's decision to focus on wet corn milling, which allows facilities to switch between ethanol, and sweetener and starch production, was reflected in results.

Earnings from the sweeteners and starches segment improved, while earnings from ethanol were down, as the company cut production in the face of weaker margins.

ADM shares fell in pre-market trading, after the disappointing result.

Shares were down 2.8%, to $43.00, in premarket deals.


Twitter Linkedin
Related Stories

Evening markets: South American double whammy brings ags back down to earth

Ags lose early gains, undermined by a tumble in Brazil’s real, and falling rain in Argentina. Still, wheat futures remain in positive territory

Wheat leads respectable week for US crop exports

Sales of hard wheat - spring and winter - prove particularly strong. Cotton export data return to type - ie with strong sales but...

Morning markets: Hard wheat regains premium over soft, amid US dryness worries

Kansas City wheat outperforms, as Plains precipitation worries extend to a dearth of snow cover. But Kuala Lumpur palm oil hits a 16-month low

Evening markets: Ags gain, as funds begin to get that year-end festive mood

Ag prices recover, helped by the likes of more positive comment on US export competitiveness, and some more negative talk on Argentine rains
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© 2017 and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069