July 30, 2020
ADM reports higher second quarter earnings
United States-based Archer Daniels Midland Co (ADM) reported higher than expected quarterly earnings thanks to higher margins from its grains trading and oilseeds business, Reuters reported.
ADM said it purchased and exported record numbers of South American crops during the quarter, adding that farmers were active sellers.
In a statement, ADM said the strong quarter was due to countries looking to secure food supplies because of the COVID-19 pandemic.
The company said its adjusted agriculture services and oilseeds unit operating profit increased to US$413 million in the second quarter, a 14% jump. It also reported a 35% jump in adjusted operating profit for its nutrition business.
With demand for food moving from restaurants to retail and grocers, ADM said edible oil demand has declined in its North America, Europe, Middle East, and Africa regions.
Its biofuel margins were affected by COVID-19 related travel restrictions.
ADM subsidiary Vantage Corn Processors reported a profit after declaring a lost the year prior.
ADM said its prices and margins steadily increased through the quarter even though lower production, especially as two ADM dry mills were closed plus recovery in driving miles led to industry stocks dropping.
According to IBES data from Refinitiv, ADM earned US$0.85 cents per share, higher than the US$0.51 cents average increase that analysts estimated.
Competitor Bunge reported a higher second quarter profit as well.