ADM's net income rises by 17%

01/02/06 ADM has reported that earnings for the quarter ended December 31, 2005 increased 17% to $368 million. Second quarter segment operating profit increased 8% to $ 524 million from $ 485 million last year. Operating profits improved in its sweeteners and starches, oilseeds and corn-processing operations.

ADM said that this year’s results for the quarter and six months ended December 31, 2005 include a $ 36 million tax credit related to the adjustment of state and federal income taxes, a $ 31 million ($ 19 million after tax) Food and Feed Ingredient asset impairment charge, and severance costs of $ 15 million related to a citric acid plant shut down. Net earnings for the quarter ended December 31, 2004 included a gain of $ 45 million representing the Company’s equity share of the gain reported by the Company’s unconsolidated affiliate, Compagnie Industrielle et Financiere des Produits Amylaces SA (“CIP”), upon the sale of its Tate & Lyle interest.

Segment operating profit increased $ 39 million to $ 524 million for the quarter and increased $ 51 million to $ 874 million for the six months.

Oilseeds Processing operating profit increased $ 9 million to $ 128 million for the quarter and increased $ 17 million to $ 227 million for the six months due principally to improved processing results in North America, South America and Europe. Operating results of Asia declined in the quarter and were slightly ahead of last year’s levels for the six months. Corn Processing operating profit increased $ 105 million to $ 237 million for the quarter and increased $ 138 million to $ 373 million for the six months due primarily to lower net corn costs and, to a lesser extent, improved ethanol prices and volumes. These gains were partially offset by lower lysine selling prices and higher energy costs.

Sweeteners & Starches operating profit increased $ 69 million to $ 114 million for the quarter and increased $ 107 million to $ 206 million for the six months due to lower net corn costs partially offset by higher energy costs. Bioproducts operating profit increased $ 35 million to $ 122 million for the quarter and increased $ 31 million to $ 166 million for the six months due to higher ethanol selling prices and volumes and lower net corn costs partially offset by lower lysine selling prices and $ 15 million of employee severance costs associated with the closure of a citric acid plant.

Agricultural Services operating profit increased $ 6 million to $ 94 million for the quarter due principally to improved operating results of transportation operations. For the six months, operating profit decreased $ 26 million to $ 114 million as improved results from transportation operations were more than offset by a decline in global grain merchandising results and the negative impact of the hurricanes on North American origination and export operating results.

Other segment operating profit decreased $ 80 million to $ 66 million for the quarter and decreased $ 78 million to $ 161 million for the six months due primarily to Food & Feed Ingredients impairment charges of $ 31 million and a $ 45 million decline in earnings of our private equity funds.