ROTTERDAM, NETHERLANDS — Louis Dreyfus Co. (LDC) posted strong results as it navigated global challenges such as the coronavirus (COVID-19) pandemic, trade tensions and market uncertainty.
“In the first half of 2020, LDC achieved strong results while continuing to deliver essential products and ingredients to customers and consumers around the world, in the context of operational challenges posed by COVID-19 and despite continued trade tensions,” said Ian McIntosh, chief executive officer (CEO) of LDC. “Our diversified portfolio, global geographic footprint and risk management expertise remained crucial to our performance and agility in this environment.”
Overall LDC net income during the six-month period ended June 30 was $126 million, up from $71 million in 2019. Sales were $16.3 billion, down slightly from $17.5 billion. LDC attributed the decrease in sales to lower-than-average prices of main commodities traded by the company and a 2.9% slip in volumes shipped. EBITDA during the first half was $634 million, up from $423 million.
“As the world copes with, and adjusts to, restrictions and uncertainty resulting from the advent of COVID-19, our key role in providing sustenance for a growing population has proved all the more important,” McIntosh said. “We have risen to the challenge of ensuring continued food security while protecting people’s health and safety as a priority, thanks to the commitment of LDC teams around the world, to whom I am extremely grateful. I am confident that their expertise and dedication will see LDC continue to thrive, adapt to short- and long-term challenges and fulfill its essential mission, as it transforms for the future.”
The Value Chain Segment posted operating results of $492 million, up nearly 119% from $225 million the previous year. The Grains & Oilseeds platform remained resilient due to its Brazilian operations which benefited from the weakening Brazilian Real, strong farmer selling and increased demand for Brazilian soybeans, particularly from China’s hog sector.
The Juice Platform was negatively affected by transportation issues due to COVID-19 lockdowns.
The Freight Platform was challenged by voluntary economic shutdowns by governments due to COVID-19, rains and flooding in Brazil and oversupply and lowered demand in the fuel market. Performance of the segment improved performance as shipping rate tensions eased, economies opened back up and import demand recovered.
The company’s merchandising segment recorded operating results of $307 million, up 14% from $270 million in the first six months of 2019.
Despite lower volumes shipped, the Rice platform expanded its market share in East Africa and Asia.
The Cotton Platform had profitable origination opportunities and strong warehousing activities in the United States. The entire textile industry did cope with decreased demand as COVID-19 caused lockdown protocols across the globe.
The Sugar Platform performance was boosted by LDC’s Imperial Sugar business. It had increased sales driven by higher prices and volumes as a result of better market condition in the United States.
“The results reported today put LDC in a strong position from which to advance its ambitious growth plans,” said Michael Gelchie, deputy chief executive officer of LDC. “We pursued our transformative strategy in the first half of the year, through continued investments to strengthen our core trading activities, to advance the use of new technologies for greater efficiency and traceability in the industry, and to accelerate innovation toward a sustainable future of food.”