ADM nearly doubles operating profit in strong third quarter

ADM almost doubled its year-on-year operating profit in a strong third quarter, driven largely by the robust performance of its Oilseeds division.

In the three months to 30 September 2018, the company reported operating profits of $881 million, an 81.6% increase when compared to the $485 million figure recorded in the same period last year. The company’s net revenue also rose 6.5% to $15.8 billion in the quarter.

ADM’s Oilseeds division alone recorded operating profits of $349 million, with the company’s crushing and origination operations setting a new record for crush volumes and posting an operating profit of $221 million.

ADM claims that soybean crush, in particular, was the major driver of earnings growth, with North America, EMEA and South America all delivering substantially higher year-on-year earnings.

During the quarter, ADM bolstered its Oilseeds business with the acquisition of two Brazilian oilseed processing facilities from Algar Agro, and earlier this year the company and Cargill launched the SoyVen joint venture in Egypt.

However, the company’s second largest division, Carbohydrate Solutions, announced a moderate decline in operating profit, which fell $12 million year-on-year to $288 million. This was due in part to the higher input and manufacturing costs of liquid sweeteners in North America and poor ethanol margins.

ADM chairman and CEO Juan Luciano said: “The team delivered another strong quarter, capitalising on robust global demand with good execution and great utilisation of our global footprint.

“For the last several years, through good conditions and bad, we’ve remained focused on serving our customers and delivering our strategic plan — optimising our core, driving efficiencies, and expanding strategically.

“Now, as we look forward to 2019, we are continuing to enhance our earnings power, both through our growth investments and our Readiness initiative, which is beginning to drive fundamental changes in the way we run our company.

“Thanks to the team’s great work and the growing benefits of our strategic actions, we expect a solid end to 2018, as well as continued momentum for growth in earnings and returns in 2019 and the years to follow.”