April 27, 2022


ADM and Bunge expected to announce strong Q1 profits



Analysts said global agribusinesses Archer-Daniels-Midland Co (ADM) and Bunge Ltd are expected to announce strong Q1 profits despite soaring crop costs and disruptions to supply chains caused by Russia's invasion into Ukraine, Reuters reported.


The analysts said both firms capitalised on increased oilseed and corn processing margins and high demand for both crops after the Ukraine conflict disrupted exports from Black Sea region.


Analysts Refinitiv IBES said ADM is projected to announce Q1 earnings of US$1.41 per share, in line with the US$1.39 share announced in the same quarter last year.


Bunge is expected to announce Q1 profits of US$2.86 per share. The year prior, Bunge announced earnings of US$3.13 a share thanks to robust margins and surging exports.


Prices for commodities soared to record levels as Russia's invasion cut off supplies accounting for one-third of worldwide wheat exports and a fifth of corn exports.


Margins for the companies' crop processing and trading remained strong due to high demand for livestock feed.


Chris Johnson, lead agribusiness analyst for Standard & Poor's, said both companies profit from where they are in the supply, as their size means they won't be affected by rising input costs and earn more on distribution and processing.


ADM and Bunge closed their Ukraine plants and have not resumed operations. Their Ukraine facilities represent only a minimal share of their worldwide businesses.


-      Reuters

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