ADM Reports Third Quarter 2012 Earnings of $399 Million

“This quarter, we delivered very good results despite difficult margin environments, particularly in ethanol and European oilseeds,” said ADM Chairman and CEO Patricia Woertz. “The strong third quarter last year set a high bar, and this quarter represents a solid performance by the team.”

2 May 2012 --- Archer Daniels Midland Company reported financial results for the quarter ended March 31, 2012. The company reported net earnings for the quarter of $399 million, or $0.60 per share, down 31 percent and 30 percent respectively from the same period one year earlier. Adjusted earnings per share1 which excludes the impact of LIFO, restructuring costs and other adjustments was $0.78 per share, 12 percent lower than the prior-year quarter. Segment operating profit1 was $887 million, down 12 percent from the year-ago quarter.

“This quarter, we delivered very good results despite difficult margin environments, particularly in ethanol and European oilseeds,” said ADM Chairman and CEO Patricia Woertz. “The strong third quarter last year set a high bar, and this quarter represents a solid performance by the team.”

“Looking ahead, planting is underway in North America, and we’re encouraged by the projected corn and soybean acreage,” added Woertz. “Meanwhile, we continue to leverage our global origination, processing and transportation network to deliver products to our customers and returns to our shareholders.”

Third Quarter 2012 Highlights
• Adjusted EPS of $0.78 excludes a LIFO charge of $0.10 and restructuring charges of $0.08.
• Oilseeds Processing profit declined $117 million primarily due to the absence of significant, favorable timing effects which benefited year-ago results. Improved results in North and South America significantly offset weakness in Europe.
• Corn Processing results decreased $74 million as improved sweetener results were offset by poor ethanol margins.
• Agricultural Services profit rose $8 million, as lower North American grain exports were offset by improved international merchandising margins and volumes.
• Other businesses’ results were steady when excluding positive timing effects.
• Corporate costs include $74 million of pre-tax restructuring charges, or $0.07 per share, largely related to the global workforce reduction program.
• ADM returned $171 million to shareholders in the quarter, including buying back nearly 2 million shares.

Adjusted EPS decreased primarily due to lower segment operating profit, partially offset by lower corporate expenses.

The effective tax rate for the quarter was 29 percent, resulting in a cumulative rate of 30 percent.

Oilseeds Earnings Comparable Absent Timing Effects

Oilseeds operating profit in the third quarter was $395 million, down $117 million from the same period one year earlier. Excluding last year’s significant, positive mark-to-market timing effects, operating profit was comparable.

Crushing and origination operating profit was $271 million. Improved results in North and South America significantly offset continued weakness in Europe. Tight South American crop supplies led to increased soybean meal exports from North America. And, in South America, favorable positioning and increased farmer selling led to good grain origination results.

Refining, packaging, biodiesel and other generated a profit of $75 million for the quarter, down $14 million on weaker biodiesel results from North and South America.

Oilseeds results in Asia for the quarter were up $31 million over the prior year’s third quarter, principally reflecting ADM’s share of the results from its equity investee Wilmar International Limited.

Corn Processing Results Weaker on Poor Ethanol Margins

Corn processing operating profit was $130 million, a decrease of $74 million from the same period one year earlier.

Sweeteners and starches operating profit increased $47 million to $93 million. Export demand for sweeteners remained strong, and average selling prices rose as new sweetener contracts came into effect through the quarter.

Bioproducts results in the quarter decreased $121 million to $37 million. Ethanol margins remained weak through the quarter, amid excess industry production that lessened through the quarter. Results also reflect a $14 million charge related to the closure of ADM’s 30 million gallon per year ethanol dry mill at Walhalla, N.D.

Agricultural Services Results Stable, Reflecting Balanced Footprint

Agricultural Services operating profit was $179 million, up $8 million from the same period one year earlier.

Merchandising and handling earnings were essentially flat. ADM’s Black Sea and other international merchandising operations saw good volumes and margins, while North American grain export volumes were down due to low U.S. crop inventories. Earnings from transportation operations rose $7 million.

Other Results Steady, Excluding Timing Effects, with Other Processing Remaining Strong

In the third quarter, profit from ADM’s Other businesses was $183 million, up $64 million from the same period one year earlier. Excluding net timing effects, the results in Other were comparable to last year’s results.

In other processing, profits rose $105 million to $201 million. Cocoa results this quarter were impacted by $72 million in mark-to-market timing gains. The underlying performance in cocoa remained strong, driven by good cocoa press margins. Wheat milling results, including ADM’s share of Gruma S.A.B. de C.V., were essentially flat.

Other financial declined $41 million to a loss of $18 million due to loss reserves at ADM’s captive insurance subsidiary related to crop risk and property claims.

Current Landscape Assessment

Worldwide demand for crops and agricultural products continues to grow at a stable rate. Global supplies of corn and soybeans should tighten until the North American harvest. As the South American harvest is coming into the market, U.S. oilseed processing rates and soybean meal exports are returning to seasonal levels. Depressed U.S. ethanol margins have slowed industry production, improving alignment of supply and demand. U.S. corn wet milling demand remains strong, led by sweetener exports.