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Global agribusiness giant Louis Dreyfus Company (LDC) has announced a 97% increase in net income for the first half of the year.

LDC’s net income increased from US$336M in the same period last year to US$662M this year, the company said on 22 September.

Segment Operating Results grew to US$1.375bn for the period – a rise of US$879M compared to the same period last year, while EBITDA increased by US$778M to reach US$1.17bn.

Net sales totalled US$30.3bn for the six-month period, an increase of 27%.

“In the first half of 2022, the Russia-Ukraine crisis added to pre-existing drivers of global market uncertainty, such as continued port congestion, changing expectations on crop sizes, accelerating climate challenges and concerns over the resurgence of COVID-19, particularly in China,” LDC CEO Michael Gelchie said.

“Despite very limited origination possibilities from the Black Sea, we nevertheless grew volumes shipped in the first half of the year.”

LDC said both its business segments - the Value Chain segment, which includes the grains and oilseeds platform, and the Merchandising segment - had contributed to the group’s operating results in a turbulent market.

Operating results for the Value Chain segment were US$945M compared with US$525M in the same period last year.

The Grains & Oilseeds Platform had further increased operating results, following a strong six-month period ended 30 June 2021, the company said.

Grain and vegetable oil prices rose rapidly in the first four to five months of this year, driven by concerns over global supply and demand imbalances for goods usually exported from the Black Sea, and over corn and soyabean supply shortages due to a potential drought in Argentina and Brazil, LDC said. Market volatility was increased by export duty increases (for example, on soyabean meal and oil in Argentina), export restrictions (particularly on palm oil from Indonesia or wheat from India) and concerns over the consequences of a resurgence of COVID-19 in China.

Prices began to decrease in June, due to fears of a global recession and before the opening of a grains export corridor out of Ukraine, LDC said, while operations in EMEA (Europe, the Middle East and Africa) had been negatively impacted by limited and costly logistics in the Black Sea.

Globally, demand for grains (particularly corn, wheat and sorghum) remained strong throughout the period as destination countries secured supply, LDC said, while demand for vegetable oil remained resilient as prices reached record levels towards the end of April.

Despite increasing production costs due to inflation and high energy prices, processing activities had contributed significantly to the platform’s performance and growth, due to strong crushing margins, particularly in Brazil, Canada and the USA, the company said.