May 4, 2006

ADM's Q3 profits soar 45.6 percent
 

Leading agricultural processor Archer Daniels Midland (ADM) announced on May 2 a 45.6-percent increase in its Q3 2005 operating profits to US$549 million on-year, thanks to improved profits in its oilseeds processing and agricultural services operations.

Its oilseeds processing operating profit nearly doubled at 191 percent to US$177 million for the quarter, and increased 49.1 percent to US$404 million for Q1-3 as "improved global market conditions resulted in improved operating results in North American, South America, Europe and Asia," according to the press release.

Operating profit for its agricultural services division also rose 43.6 percent to US$79 million in Q3, mainly due to improved operating results of its transportation operations. However, its Q1-3 operating profits decreased US$2 million to US$192 million.

"Improved results from transportation operations were offset by a decline in global grain merchandising operations and the negative impact of the hurricanes," ADM explained.

Its other segment operating profit decreased US$8 million to US76 million for the quarter mainly due to its food and feed ingredients earnings, which dropped to US$34.8 million from US$43.5 million from costs associated with exiting the European animal feed business and stagnant lysine prices.

ADM chairman G Allen Andreas shared that the increase in vegetable oil demand is seen to raise North American oilseed crushing operations. ADM will operate its own biodiesel plant in Missouri come October and one in North Dakota in 2007.

In addition to biodiesel, increasing demand for ethanol has fuelled much of ADM's recent growth.

ADM's results contrast sharply to oilseed processor Bunge, which less than a week earlier reported an unexpected 41-percent profit drop for its Q1 2006. The latter attributed to weakness in South American operations and losses in its ocean freight business.

ADM also recently saw a change in its chief executive from Andreas to ex-Chevron Corp senior executive Patricia Woertz, who took up the new post May 1. This makes ADM the largest publicly traded company, based on revenue, to have a woman as CEO.