July 31, 2007

ADM's fiscal 4Q net income more than doubled

Archer Daniels Midland announced its net income in the fiscal fourth quarter has more than doubled due to gains on asset sales and a 28 percent hike in net sales. 

The Decatur, Illinois-based agricultural conglomerate reported earnings of US$954.8 million, or US$1.47 a share, up from net income of US$410.3 million, or 62 cents a share from the previous year. Results for the latest quarter included gains on asset sales of US$616 million with asset sale gains posting US$440 million in oilseeds processing and US$158 million in agricultural services. Results also included various charges totalling about US$79 million for asset impairment, LIFO (Last in, First Out) inventory and debt repurchase.

The company's net sales jumped to 28 percent to US$12.21 billion for the quarter ended June 30, topping earlier prediction of US$10.13 billion. Corn processing operations dropped 16 percent to US$241.3 million in the fourth quarter, amid lower ethanol sales volume and higher net corn costs.

Oilseeds processing operating profit, on the other hand, more than tripled to US$587.2 million, due to the company's exchanged interest for shares in Wilmar International Ltd., the largest agricultural processing business in Asia. Agricultural services operating profit nearly tripled to US$240.8 million, which ADM attributed to a gain on the sale of the company's Agricore United investment.

At other segments, which include the food, feed and industrial business as well as financial operations, operating profit rose 13 percent to US$83.2 million, boosted by improved results in the financial division.

ADM executives recently announced the company is preparing to enter the sugar-cane-ethanol business in Brazil.

The company's stock closed Friday at US$34.05, down 65 cents, or 1.9 percent.