Global grain trader and processor Archer-Daniels-Midland Co has reported a 96% surge in third-quarter profit on robust demand for grain and oilseeds and tight global supplies.
Strong oilseed processing margins and good global demand for soybean meal and oil supported ADM's crushing operations despite idled facilities in Paraguay and war-torn Ukraine.
ADM's results offered a look into how global agribusinesses have weathered tightening grain stocks, high energy prices and snarled supply chains.
ADM and agribusiness rivals Bunge Ltd, Cargill Inc and Louis Dreyfus Co, known as the ABCD quartet of global grain traders, make money processing, trading, and shipping crops around the world. The supply chain middlemen tend to thrive when crises such as droughts or war trigger shortages in parts of the world.
Food And Fuel Demand
Tight global grain supplies and strong demand for food and fuel have kept grain prices elevated since Russia's invasion of Ukraine curbed grain shipments from the Black Sea breadbasket region.
ADM said the adjusted operating profit from its Ag Services and Oilseeds segment, its largest in terms of revenue and volumes, rose 74% to $1.08 billion from last year's $618 million.
"Global demand remains robust ... We're well positioned to end 2022 strong, and carry that momentum into 2023," said chief executive officer Juan Luciano.
Its Carbohydrate Solutions unit, which includes ethanol and corn milling facilities, posted a 45% increase in operating profit on solid demand for sweeteners and starches. Gains were partly offset by high corn costs and lower US ethanol demand, which reduced margins for dry mills within ADM's Vantage Corn Processors business.
Net earnings attributable to ADM were $1.03 billion, or $1.83 per share, in the three months to 30 September, compared with $526 million, or $0.93 per share, a year earlier.
The results topped the consensus analyst estimate of $1.39 a share, ADM's 13th consecutive quarterly earnings beat.