Global grain trader and processor Archer-Daniels-Midland Co reported a first-quarter profit that beat Wall Street expectations, supported by tight global supply and robust demand for grain and oilseeds.
Reduced crop shipments amid the war in Ukraine ignited global worries about food insecurity last year. That, coupled with strong demand for food, feed and biofuel, pushed Chicago-based ADM toward another strong quarterly performance.
ADM and its agribusiness peers, including Bunge Ltd, Cargill Inc and Louis Dreyfus Co, make money by processing, trading and shipping crops around the world. The supply chain middlemen tend to thrive when crises such as droughts or war trigger shortages.
ADM's adjusted operating profit from the Ag Services and Oilseeds segment, its largest by revenue and volumes, rose to $1.2 billion (€1.1 billion) from $1.01 billion (€920 million) a year earlier.
'Higher export demand due to the record Brazilian soybean crop drove significantly higher year-over-year results,' the company said.
ADM's adjusted net earnings stood at $2.09 per share for the three months ended 31 March, compared with analysts' average estimate of $1.78 per share, according to Refinitiv data.
Chairman and CEO Juan Luciano commented, “Our continued strong performance in the first quarter demonstrates ADM’s unique ability to deliver results through a rapidly evolving external environment, and showcases our team’s agility in responding to opportunities that leverage our company’s unparalleled global footprint and capabilities.
“Our broad portfolio continues to serve diverse global food, feed and industrial markets and creates compelling value for our customers and our shareholders.”