March 26, 2021

Louis Dreyfus Company profits rebounded last year, set to welcome new investor

The Louis Dreyfus Company (LDC) said it profits rebounded in 2020, thanks to increased food demand and soaring prices during the COVID-19 pandemic, as the family-owned company is set to welcome a new shareholder, Reuters reported.

LDC, controlled by Margarita Louis-Dreyfus and family owned for 170 years, have sold a 45% of the company to ADQ, and Abu Dhabi investment firm.

LDC saw its net income up 66% to US$382 million last year. Its earnings before interest, tax, depreciation and amortisation (EBITDA) from continuing operations was also up 58% to US$1.324 billion.

The company's profits was a result of resilient demand for food, high soybean margins due to increased demand from China, and trading opportunities on volatile commodity markets.

Michael Gelchie, chief executive officer of LDC, said the company projects high demand especially from China, and for high prices to continue.

Competitors Archer Daniels Midland Co and Bunge Ltd also reported higher earnings due to strong demand from China for soybeans from the United States and Brazil.

The agreement between LDC and ADQ, the latter of which is state-owned, eased financial pressure on LDC's main shareholder following years of lean profits and debt accumulated from buying out other family shareholders.

LDC equity value jumped to US$4.9 billion as of December 31, 2020, compared to US$4.8 billion the year prior. But profits were generally offset by a previously disclosed US$302 million dividend to shareholders.

LDC's net profit was curtailed by a higher tax bill, at US$237 million from US$68 million before. Gelchie said this was because of the sale of grain elevators in Canada.

- Reuters