ADM profits improve in third quarter 2016

By Ann Bailey | November 01, 2016

After a challenging first half 2016, Archer Daniels Midland Co. had a stronger third quarter and is positioned to finish the year with a solid financial performance, said Juan Luciano, ADM chairman and CEO.

ADM reported third quarter net earnings of $341 million, up from $284 in the second quarter. Surging U.S. corn and soybean exports drove the company’s Ag Services division which had an operating profit of $193 million in the third quarter this year, $44 million more than the third quarter of 2015. Meawhile, the corn processing division which had a third quarter 2016 profit of $212 million, $81 million more than the third quarter of last year, was buoyed by a strong performance in North American sweeteners and starches and steady support for bioproducts, Luciano said.

The company’s dry mill review has progressed and ADM is targeting receipt of final proposals by the end of the year from a short list of interested parties, Luciano said. Though, China has reduced imports of ethanol, exports to other countries, including Canada and Brazil have increased this year, he said. The world market is consuming a lot of gasoline and ethanol is a good octane enhancer and helps reduce harmful emissions into the atmosphere, Luciano noted. “We feel very strong that exports will grow into next year.”

ADM continued its strategic plan in the third quarter, acquiring Caterina Foods, a specialty gluten-free and high-protein pastas manufacturer and further invested in Asia’s food demand by increasing the company’s ownership in Wilmar to 23 percent, Luciano said.  ADM also implemented nearly $250 million of new run-rate savings actions through the third quarter and expects to exceed its target of $275 million by the end of the calendar year, Luciano said. The company returned $1.3 billon to shareholders in dividends and share buybacks through the first nine months of 2016, he noted.

“With improving market conditions and a large U.S. harvest, combined with the team’s solid execution capabilities, we feel good about the remainder of the year and a stronger 2017,” Luciano said.