CHICAGO, ILLINOIS, US — “Outstanding,” “excellent” and “superior” were three of the adjectives used by Juan Luciano, president and chief executive officer of ADM, to describe the fiscal 2021 performance of the Chicago-based company.
Net income at ADM in the year ended Dec. 31, 2021, totaled $2.71 billion, equal to $4.79 per share on the common stock, up 53% from $1.77 billion, or $3.15 per share, in fiscal 2020. In the fourth quarter, earnings totaled $782 million, or $1.38 per share, up 14% from $687 million, or $1.22 per share, in the same period a year ago.
Revenues in fiscal 2021 surged 32% to $85.25 billion from $64.36 billion. The year-over-year increase was driven by a strong fourth quarter in which sales climbed 28% to $23.09 billion from $17.98 billion a year ago.
“Our record results reflect the continued success of our growth strategy and our culture of innovation and execution, which enabled our global team to successfully navigate through supply chain challenges while capitalizing on favorable demand dynamics to deliver an outstanding year,” Luciano said. “Just as importantly, we’re advancing our productivity and innovation actions to accelerate earnings growth. We’ve positioned our portfolio to align with the enduring trends of food security, health and well-being, and sustainability. As we enter 2022, we’re well situated to capitalize on strong crush margins, driven by good demand for meal and for vegetable oil as a feedstock for renewable green diesel; a continuing healthy ethanol market, supported by increased domestic and export demand and better clarity of the regulatory landscape; and our robust Nutrition sales pipeline, as well as the accretion of our recent acquisitions in that business.”
Operating profit in the Ag Services and Oilseeds segment increased 32% in fiscal 2021 to $2.78 billion, while profit in the fourth quarter eased 3% to $810 million. Within the segment, ag services operating profit fell 7.1% year-over-year to $770 million, while crushing profit soared 109% to $975 million and refined products and other increased 49% to $652 million.
“The Ag Services and Oilseeds team’s actions to improve their business portfolio and strengthen their operating model continued to enable superior performance in a strong market environment,” Luciano said during a Jan. 25 conference call with analysts. “AS&O delivered full year 2021 (operating profit) of $2.8 billion, with each subsegment performing at or near historic highs.”
Year-over-year operating profit in the Carbohydrate Solutions segment rose 79% in fiscal 2021 to $1.28 billion, while fourth-quarter profit increased 106% to $428 million. Starches and sweeteners profit rose 20% during the full year but decreased 10% in the fourth quarter. Vantage Corn Processors, which sustained a loss of $45 million in fiscal 2020, rebounded in 2021 to post a full-year profit of $378 million.
“The team is continuing the evolution of Carbohydrate Solutions from the sale of our Peoria (Illinois) dry mill and the announcement of the sustainable aviation fuel MOU; to our agreement with LG Chem and the continued growth of our exciting biosolutions platform, which delivered new revenue wins with an annualized run rate of almost $100 million; to the project we announced earlier this month to further decarbonize our operations by connecting two other major processing facilities; to our vacate of carbon capture and storage capabilities,” Luciano said.
In the Nutrition segment operating profit increased to $691 million in fiscal 2021, up 20% from $574 million in fiscal 2020. Fourth-quarter profit, meanwhile, increased to $160 million from $127 million in the same period a year ago.
“We also continued to enhance our Nutrition business with strategic investments targeted at growing areas of demand, including soya protein, which will expand our participation in alternative proteins; PetDine, which substantially enhances our presence in pet food and treats; Deerland, which continued the expansion of our functional probiotics and enzymes portfolio within our global Health & Wellness business; and FISA, which enhance our flavor footprint by opening up new growth opportunities in Latin America and the Caribbean,” Luciano said.
Looking ahead to 2022, Luciano said ADM expects a continued favorable global demand environment in Ag Services and Oilseeds.
“Due to a short growth in South America, with the magnitude of the shortfall still to be determined, we expect global ag commodity buyers will rely relatively more on the US market for their needs, assuming we have a normal US crop later this year,” he said.
In Oilseeds, ADM already is off to a strong start in 2022 with strong soy crush margins, Luciano said. He said the company expects increasing demand for meal as well as vegetable oil as a feedstock for renewable green diesel to benefit the business.
In the case of both Ag Services and Oilseeds Luciano said ADM sees the potential for operating profit similar to or better than 2021.
Meanwhile, he said ADM expects Carbohydrate Solutions to deliver full-year operating profit slightly lower than 2021, reflecting expectations of a steady demand and margin environment for starch and sweetener products.