ADM Q2 Operating Profits Up 25%
Net sales and other operating income increased 50 % to $ 16.5 billion. Increased selling prices resulting from sharp rises in commodity prices accounted for approximately 78 % of the increase.
05/02/08 Second quarter segment operating profit increased 25% to $ 955 million from $ 767 million last year. Oilseeds Processing operating profit increased on improved margin conditions due to strong protein and oil demand. Corn Processing operating profit decreased due to lower ethanol selling prices and increased net corn costs. Agricultural Services operating profit increased due to improved global grain merchandising and handling results. Other segment operating profit increased primarily due to improved results of wheat and malt processing operations and increased financial services income.
Net sales and other operating income increased 50% to $ 16.5 billion. Increased selling prices resulting from sharp rises in commodity prices accounted for approximately 78 % of the increase while higher sales volumes, principally feed grains, ethanol and wheat, accounted for the remaining 22% increase.
“ADM’s record earnings for the second quarter and first half of fiscal 2008 demonstrate the value created by and the strengths of our broadly diversified asset base and product portfolio,” said Patricia Woertz, chairman and CEO. “This quarter, heightened demand, coupled with geographic crop imbalances, drove volumes, prices and volatility in many key markets. Our team’s skill in managing both risk and rapidly changing market opportunities, enabled us to deliver outstanding value for our shareholders.”
Oilseeds Processing operating profit increased $ 27 million for the quarter and $ 66 million for the six months due principally to strong global demand for protein meal and oil. Worldwide crush volumes increased 2 % for the six months to 14.7 million metric tons. Crushing and origination results increased $ 12 million for the quarter and $ 39 million for the six months due principally to better crush margins in North America and improved origination results in South America partially offset by reduced results of European operations and increased manufacturing costs. Value added refining, packaging, biodiesel and other results for the quarter and six months include asset abandonment charges of $ 15 million and $ 18 million, respectively, compared to $2 million in the prior year quarter and six months. Excluding these charges, refining, packaging, biodiesel, and other operating profits increased $ 6 million for the quarter and $ 22 million for the six months principally from improved refining volumes and margins. Asia results increased $ 22 million for the quarter and $ 21 million for the six months reflecting the Company’s share of improved operating earnings of Wilmar International Limited.
Corn Processing operating profit decreased $ 61 million for the quarter and $ 97 million for the six months. Sweeteners and Starches operating profit decreased $ 5 million for the quarter on higher average sweetener and starch selling prices and favorable risk management results, offset by higher net corn and manufacturing costs. For the six months, Sweeteners and Starches operating profit increased $ 40 million due principally to favorable risk management results. Bioproducts results declined $ 56 million for the quarter and $ 137 million for the six months due principally to higher net corn costs and lower ethanol selling prices partially offset by increased ethanol sales volumes and favorable risk management results. In addition, specialty feed results improved on increased selling prices and volumes.
