September 23, 2022
Louis Dreyfus announces higher first-half sales and profits
Major global crop merchant Louis Dreyfus (LDC) announced higher sales and profits in the first half of the year, as the company said it used its wider supply network to adjust to Ukraine conflict-related disruptions to increase volumes and benefit from higher prices, Reuters reported.
LDC reported that net sales for the six months ending June 30 increased to US$30.3 billion from US$24 billion a year earlier, while net income increased to US$662 million from US$336 million. LDC's competitors include ADM, Bunge, and Cargill.
High prices and limited supplies have increased profits for international crop traders, and market tension was increased by Russia's invasion of Ukraine on February 24.
Michael Gelchie, chief executive of LDC, said that despite very limited origination possibilities from the Black Sea, the company increased volumes shipped in the first half of the year.
According to LDC's report, rising sales were the result of higher prices and a 0.9% year-over-year increase in volumes.
LDC reduced operations in Russia and Ukraine this year as other foreign grain companies did as a result of the conflict. Less than 4% of its sales the previous year were made up of items from just two nations.
Operations in Ukraine continue at a scaled-back pace, according to LDC. As of June 30, it included $118 million in cost of sales as provisions and impairments for Ukraine.
Although wheat inventories in a third-party silo were destroyed, there had been no reports of war casualties among employees in Ukraine, it said.
The group had resumed operations in Russia to the extent that trade agreements and sanctions permitted.
After several years of meagre profits and mounting debt, improved results and the sale of a stake to Abu Dhabi holding company ADQ last year have relieved financial pressure on LDC and main shareholder Margarita Louis-Dreyfus.
The group distributed a US$348 million dividend in the first half.