ROTTERDAM, NETHERLANDS — Louis Dreyfus Commodities B.V. reported on March 26 that its net income dropped 34% to $640 million from $970 million in 2012. This despite the fact that the company’s net sales of $63.6 billion represent an increase of 11% from $57.1 billion in 2012. Sales were supported by a 10% growth in shipped volumes. Larger crops hurt agricultural prices and the lower price volatility hurt trading operations.
The company reported strong consolidated net income, group share, of $640 million and delivered a solid return on equity (ROE) of 15%.
“These are very good results, even compared to the record year 2012,” said Serge Schoen, executive chairman, Louis Dreyfus Commodities Holdings Group. “In 2013, we transported and processed more than 77 million tonnes of commodities. We also continued our investment program to diversify and expand our reach, investing $689 million across all our business lines.”
“Our diversification in activities, global presence and integrated model have enabled us to continue delivering for our customers and maintain an edge versus our peers,” said Ciro Echesortu, chief executive officer of Louis Dreyfus Commodities.
2013 marked a year of transition, from tight supply conditions in certain agricultural markets to abundant new crops for most agricultural products. The group’s Proteins and Other Products segments performed well, while the Tropicals segment faced more challenging conditions, including oversupply and unusual weather conditions in Brazil. Overall, Louis Dreyfus Commodities once again achieved a strong performance thanks to diversification, with segment operating results of $1.7 billion. Sales to emerging markets represented 67% of total sales, the same proportion as the previous year.
The Group pursued its on-going program of vertical integration, both upstream and downstream, while making selective use of funds and divesting non-core assets, in order to achieve targeted growth. Upstream, major steps included the inauguration of an export elevator facility at the Port of Greater Baton Rouge, Louisiana, U.S., and entering the Australian cotton market through a joint venture. The Group also strengthened its presence in the fertilizers market in Australia and invested in animal feed mills in China. A parallel step downstream was to enter a rice distribution joint venture in South Africa.