ADM third quarter profits surge with “exceptional” results in agricultural services and oilseeds segment

Global agribusiness giant ADM has announced a surge in third quarter profits in the current marketing year compared to the same period last year.

ADM’s net earnings totalled US$1.23bn (US$1.83/share or US$1.86/share on an adjusted basis) for the period 1 July-30 September, the company said on 25 October.

For the first nine months ended 30 September, the company’s net earnings totalled US$3.3bn, up 74% from US$1.9bn the previous year.

The strong results followed higher demand for food and fuel and tighter supplies after Russia’s invasion of Ukraine had blocked grain exports from the Black Sea regions, ADM said.

ADM said it had achieved “exceptional results” in its Ag Services & Oilseeds segment, with third quarter profits surging to US$1.075bn compared to US$618M in the same period the previous year.

Within the segment, operating profit in Ag Services surged to US$292M from US$36M the previous year with higher volumes in North and South America backed by solid freight margins.

“The short crops in South America supported US exports, driving improved volumes and margins in North American origination, which had significant negative impacts from Hurricane Ida in the prior year,” the company said in its quarterly financial statement.

“South American origination saw improved volumes and margins driven by increased farmer selling in addition to higher volumes through our export facilities,” the company added.

The crushing business delivered higher year-on-year increases in operating profit, with an increase to US$346M from US$280 the previous year, supported by “resilient global demand” for meal and oil.

Strong rapeseed margins in the EMEA (Europe, the Middle East and Africa) region were matched by solid soyabean crushing margins in North America which helped offset lower crushing volumes from idle facilities in Ukraine and Paraguay, according to ADM.

Operating profit in the first nine months of 2022 for Ag Services & Oilseeds totalled US$3.2bn, up US$1.2bn from US$2bn for the same period the previous year.

The nutrition segment saw a slight increase in operating profit from US$176M to US$177M, with strong demand for plant-based proteins within the human nutrition sub-segment offset by weaker demand for protein feed within the animal nutrition business.

“Strong demand for plant-based proteins, as well as solid performance in texturants, drove continued growth in Specialty Ingredients,” the report said.

ADM’s total revenue in the third quarter of 2022 totalled US$24.7bn compared to US$20.3bn in the same period last year.

Total revenue for the first nine months of 2022 totalled US$75.6bn, compared to US$62.2bn the previous year.

“We’re well positioned to end 2022 strong, and carry that momentum into 2023,” ADM chairman and CEO Juan Luciano said.