Global agribusiness giant Archer Daniels Midland (ADM) has said it expects strong profits this year.
Leading grain suppliers such as ADM had seen robust demand for crops worldwide following Russia’s invasion of Ukraine on 24 February, Reuters reported on 26 July.
Announcing its second quarter results on 26 July, the company reported adjusted operating profit in ADM’s core agricultural services and oilseeds unit had increased to US$1.12bn from US$570M in the same period last year.
Net earnings in the April to June quarter reached US$1.24bn, or US$2.18/share, compared with US$712M, or US$1.26/share, last year.
ADM’s Ag Services& Oilseeds segment delivered “substantially higher” year-on-year results, with an operating profit of US$1.12bn – almost doubling the previous year’s total.
Within the segment, operating profit in Ag Services reached US$407M, from US$190M the previous year.
North America had a “solid performance” as export volumes remained strong in a “good, global demand environment”.
“South America results were higher, based on stronger origination volumes and better margins driven by strong global grain demand,” the company said in its quarterly financial statement.
The crushing business delivered a year-on-year surge in operating profit from US$150M to US$468M.
“Strong soya crush margins drove improved performance in all three regions, as meal and oil demand remained robust,” the company said.
Operating profit in the first half of 2022 for Ag Services & Oilseeds reached US$2.13bn compared to US$1.35bn the previous year.
ADM’s total revenue in the second quarter of 2022 totalled US$27.3bn, compared to US$22.9bn in the same period last year.
The company said it expected strong third-quarter results.
“Looking forward, we expect the combination of our strategic actions and continued good demand for our products to propel very strong earnings in the second half of 2022,” ADM chairman and CEO Juan Luciano said.