CHICAGO, ILLINOIS, U.S. — Archer Daniels Midland Company (ADM) reported on Aug. 4 that earnings for the second quarter were $386 million or 62¢ per share, down 27.5% from $533 million or 81¢ in the same quarter of last year.
For the first six months of the year, ADM reported earnings of $879 million or $1.39 up from $800 million or $1.21 per share in the same period a year ago.
“Our second-quarter results demonstrate the strength and value of our geographic and business-portfolio diversity,” said Juan Luciano, ADM chief executive officer (CEO). “In corn, domestic and export demand for ethanol was robust, but record industry production limited margins. This was partially offset by strong results from our corn sweeteners and starches business.”
Milling and other results improved $25 million to $67 million, due mainly to higher product margins and strong merchandising results. ADM's global milling operations had record second-quarter results.
Corn processing operating profit decreased from $268 million to $188 million. Bioproducts results declined from $145 million to $43 million due to lower ethanol industry margins. Increased ethanol exports and record U.S. driving miles supported robust demand, but record industry production resulted in margins lower than the prior year, though higher than the first quarter.
“In Oilseeds, good meal demand supported strong North American soybean crushing results. And South American origination and export volumes were up, leading to good throughput at our expanded origination and port network. These, combined with the flexibility of our global crush plants, helped the seeds team deliver another strong performance,” said Luciano.
Oil Oilseeds operating profit of $301 million increased $4 million from the year-ago results.
Crushing and origination operating profit increased $35 million to $198 million. Strong soybean meal demand, combined with ample global bean supplies, supported strong global soy crush results. Large South American corn and soybean harvests helped drive volumes through the origination and recently expanded port operations there. Lower margins and volumes driven by concerns about seed supply significantly reduced softseed results.
Refining, packaging, biodiesel and other generated a profit of $61 million for the quarter, down $27 million from year-ago results that benefited from $16 million in retroactively applied biodiesel blender's credits. Strong North American refining margins were offset by lower results from South America and Europe.
Oilseeds results in Asia for the quarter increased $13 million from the year-ago period mainly due to improved results from Wilmar.
Agricultural Services operating profit was $127 million, down $57 million from the year-ago period.
Merchandising and handling earnings declined $74 million to $41 million. Strong South American exports that benefited the Oilseeds business segment reduced margins and volumes of North American exports reflected in Agricultural Services. In addition, Global Trade Desk profits were negatively impacted by the significant end-of-quarter increase in certain commodity prices as well as reduced volumes and margins.
Transportation results declined $8 million to $19 million, amid lower barge freight demand and increased costs related to high-water conditions in the U.S.
Segment Operating profit of $808 million as reported for the quarter includes a gain of $27 million in Agricultural Services related to purchasing the remaining equity interests in North Star Shipping and MinMetal; a $6 million gain in Corn Processing from the sale of the lactic acid business; a $68 million gain in Oilseeds Processing from the sale of port assets in Brazil to a new joint venture with Glencore; and impairment charges totaling $31 million, primarily related to certain international Oilseeds facilities.
“We’ve continued to advance our strategic plan that’s improving our ROIC and growing our EVA. Among numerous other actions, we closed the sale of our global chocolate business to Cargill; we closed the Barcarena port transaction with Glencore in June; and we remain on track to close both our Eaststarch transaction and the sale of our global cocoa business later this year,” said Luciano.