September 29, 2020

Louis Dreyfus reports higher first-half profits but decline in equity

The Louis Dreyfus Company (LDC), a major agricultural commodity merchant reported increased first-half profits but also a decline in its equity as it paid out a dividend to shareholders, led by Margarita Louis-Dreyfus, the company's chairwoman, Reuters reported.

The group's first half profits increased as it adapted to price volatility and changing food demand during the global COVID-19 pandemic.

LDC's first half group net income hit US$126 million compared to US$71 million in the year-earlier period. The company's core earnings before interest, tax, depreciation and amortisation (EBITDA) increased to US$634 million from US$423 million from continuing operations.

LDC said demand for food commodities remained as it adjusted to changing consumption patterns, while attaining higher profit margins thanks to price swings.

LDC said there is higher demand for Brazilian soybeans from China, mirroring competitors Archer Daniels Midland Co ADM.N and Bunge Ltd.

LDC reported lower earnings in 2019, citing international trade tensions and the African swine fever in China.

Michael Gelchie, LDC deputy chief executive officer said he was optimistic for results for the rest of 2020 and the group's full-year results will see the effects of a cost-savings programme. Gelchie is set to succeed current CEO Ian McIntosh on October 1.

The 169-year old LDC is considering bringing in an outsider investor for the first time in January. Bloomberg reported that LDC was in talks with ADQ, an Adbu Dhabi investment fund. Gelchie did not comment on potential investors' discussions, but said there was no timeline for such a move.

-      Reuters