ROTTERDAM, THE NETHERLANDS — Louis Dreyfus Commodities announced on Sept. 29 that consolidated net income for the second half of this year was $130 million down 50% from $260 million last year.
Net sales reached $26.4 billion, down 21% from $33.7 billion in the same period last year, reflecting a drop in market prices for most commodities and despite a 4% rise in shipped volumes year-on-year. Income before tax stood at $177 million, compared to $315 million the previous year. The group reported a consolidated net income, group share, of $130 million, versus $260 million one year ago. The trailing 12 months Return On Equity (ROE), group share, was 10%.
“Despite reduced commercial opportunities in this overall challenging environment, we were able to increase our sold volumes once again, largely through our logistics and processing operations,” said Claude Ehlinger, deputy chief executive officer and chief financial of Louis Dreyfus Commodities. “Our $135 million investments over the period, geared mainly towards our current asset base, were deliberately granular in order to meet our customers’ needs even more effectively and sustainably. Our strategy remains focused on capturing any beneficial investment opportunity available. Louis Dreyfus Commodities has experienced and successfully steered through a range of market cycles in its 164-year history, thanks to our expertise, local market understanding and longstanding global presence.”
The external environment remained difficult during the first half of 2015, with some key countries in the agricultural space facing economic (China and Brazil) and political (Black Sea region) uncertainty, the company said.
The 4% increase in shipped volumes year–on-year was driven by the group’s value chain segment, whose industrial assets handled growing crops of oilseeds and grains. In particular, the segment (comprising the oilseeds, grains, juice, fertilizers & inputs and freight platforms) booked $369 million in operating results, down 8% compared to the $403 million posted for the first half of 2014.
The oilseeds platform performed satisfactorily given the current context thanks to solid logistics and processing activities that took place at most of the platforms assets, especially in Europe and China, the company said. This performance was achieved despite lower crushing margins in South America, partly attributable to slow farmer selling over the period, and also in Canada, after the canola harvest did not reach exceptional levels of 2014.
The grains platform recorded a solid performance during a semester that saw supply, once again, outstrip demand. Improved results from industrial assets were partly offset by compressed ethanol margins, which correlated with low crude oil prices.
The group’s merchandizing segment (including the cotton, sugar, rice, coffee, dairy, metals and finance platforms) shipped reduced volumes to destination, as a result of large inventories. The segment’s operating results stood at $269 million for the semester, down 37% from $428 million one year before.
During the first half of 2015, Louis Dreyfus Commodities invested $135 million, mainly targeting the improvement of existing assets. The group finalized construction of grains and oilseeds elevators in Paraguay and Uruguay. Ongoing construction projects include a glycerin refinery in Claypool, Indiana, U.S., a biodiesel plant in Lampung, Indonesia, and a new elevation and storage asset in the province of Buenos Aires, Argentina.
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