Global agribusiness giant ADM has reported a drop in oilseed profits but strong performances in food oil and biodiesel in its second quarter results.
The company reported lower earnings across most of its main business units compared to the same period to 30 June the previous year.
However, ADM chairman, president and CEO Juan Luciano said on 26 July that the company was increasing its full year income expectations and there was a positive outlook moving forward.
ADM’s net earnings in the second quarter totalled US$928M, down from US$1.24bn in the same period the previous year. Revenues for the second quarter dropped to US$25.19bn from US$27.28bn.
The company said a range of factors may have contributed to the second quarter outcomes, including lower demand in some categories, while highlighting areas in which the company was making progress.
“Ag Services & Oilseeds leveraged recent investments in infrastructure and operations to achieve record origination volumes in Brazil, while Carbohydrate Solutions delivered excellent results across global starches and sweeteners,” Luciano said.
“Based on our strong first-half results, increased confidence in second-half performance, and our team’s demonstrated ability to execute, we are raising our earnings expectations for full-year 2023.”
Operating profit in the Ag Services and Oilseeds dropped in the second quarter of 2023 to US$1.05bn from US$1.12bn in the same period of the previous year. Ag services profit fell during the quarter from US$407M to US$380M, while crushing profit decreased from US$468M to US$224M.
“Global soyabean crush margins remained strong but were lower year-over-year in all regions due to softer demand for both meal and oil and a tight US soyabean carryout,” the company said on its website.
“This was partially offset by strong softseed margins and higher volumes supported by a strong Canadian canola crop and use of our flex capacity in EMEA.”
Two categories that out-performed last year’s results were Refined Products and Other, and Human Nutrition.
“Refined Products and Other results were significantly higher than the prior-year period, achieving a record second quarter,” the company said.
“North America results were higher, driven by strong food oil demand and improved biodiesel volumes. In EMEA, strong export demand for biodiesel and domestic food oil demand supported stronger margins.”