ADM Says Market Conditions Starting to “Turn” After Reporting Fall in Revenues
03 Aug 2016 --- Archer Daniels Midland (ADM) has said that market conditions are beginning to "turn" following a challenging start to the year, after revenues fell over nine percent to $15.6bn in the second quarter.
The commodities giant reported earnings of $284m in the quarter ending June 30, down from $386m the year before.
Revenues were down 9.3 percent from $17.2bn to $15.5bn.
Across Agricultural Services, operating profit was down 55 percent to $97m in the quarter; up 15 percent across Corn Processing to $219m; down 110 percent across Oilseeds Processing; up two percent across Wild Flavors & Speciality Ingredients.
ADM is looking to benefit from exporting an expected bumper US crop to overseas market.
“After a challenging start to the year, general market conditions began to turn at the end of the second quarter, providing us with improved opportunities for the second half of the year,” said ADM chairman
and CEO Juan Luciano.
and CEO Juan Luciano.
“Weak grain handling margins and merchandising results continued for Ag Services. Results for Corn included strong performance in sweeteners and starches offset by lower ethanol results.”
“Our Oilseeds operations leveraged their flex capacity to crush record volumes of soybeans in the second quarter as global protein demand continues to grow. WFSI saw strong growth in flavors and systems, with operating profit in line with the year-ago quarter.”
“During the quarter, we continued to advance our strategic plan, acquiring full-ownership of AmazonFlavors, a leading Brazilian manufacturer of natural extracts, emulsions and compounds.”
“We added soybean crushing capability to our facility in Straubing, Germany, allowing us to utilize flex capacity while also meeting growing customer demand for non-GMO soybean meal and oil in Western Europe.”
“We continued to invest in Asia’s growing and evolving food demand by further increasing our strategic ownership stake in Wilmar from 20 percent to 22 percent. In addition, we continue to make progress in the strategic review of our ethanol dry mills.”
“We have implemented almost $150 million of new run rate savings actions in the first half of the year and remain on track to meet our $275 million target by the end of the calendar year.”
“Also, we repurchased about $500 million of shares in the first half as we continue to execute on our balanced capital allocation framework.”
“The first half of the year was very challenging. However, with improved fundamentals, we anticipate more favorable second half of the year.”
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