ADM highlights strong ethanol margins in Q2 results

By Erin Voegele | August 07, 2014

Archer Daniels Midland Co. has announced second quarter financial results, reporting that operating profit for its bioproducts division increased by $44 million, reaching $141 million for the quarter, driven by strong demand and good margins in ethanol. Corn processing was up $69 million on strong ethanol demand and steady sweetener volumes.

Overall, the company reported adjusted segment operating profit of $819 million, up 39 percent from the $621 million reported for the same period of last year. Adjusted earnings per share were 77 cents, up from 46 cents for the second quarter of 2013. Net earnings for the quarter were $533 million, or 81 cents per share, and segment operating profit was $888 million.

During a call to discuss the company’s quarterly results, Juan Luciano, president and chief operating officer of ADM, noted ethanol margins were strong during the second quarter. There was good domestic demand, he said, driven by gasoline consumption and blending economics. According to Luciano, the company’s scale and logistics expertise allowed it to ensure a steady supply of ethanol to blenders despite a challenging logistics environment. The competitive price of U.S. ethanol in the global market led to continued strong export demand, he added. Moving into the second half of the year, Luciano said ADM expects favorable ethanol economics to continue.