ADM reports strong Q3 performance for ethanol

By Erin Voegele | January 25, 2022

Archer Daniels Midland Co. released fourth quarter financial results on Jan. 25, reporting strong ethanol margins for the three-month period. The company is optimistic about ethanol going into 2022 and expects production to grow. 

ADM’s Carbohydrate Solutions segment reported segment operating profits of $428 million for the fourth quarter of last year, more than double the $208 million in operating profits reported for the same period of 2020. The company cited continued strong ethanol margins as contributing to that improvement. Vantage Corn Processors, which includes ADM’s dry mill assets, achieved substantially higher fourth quarter results, driven by historically strong industry ethanol margins as a result of strong demand relative to supply, as well as increased sales volumes due to production at the two dry mills that were idle during the fourth quarter of 2020, according to the company.

ADM expects ethanol’s strong performance to continue into 2022. “We expect the industry ethanol environment to continue to be constructive, supported by the recovery of domestic demand to pre-COVID levels, energy costs driving higher exports, and better clarity on the regulatory landscape,” said Luan Luciano, chairman and CEO of ADM, during a second quarter earnings call. “With this in mind, we are assuming higher ADM ethanol volumes and EBITDA margins to average 15 cents to 25 cents [per gallon] for the calendar year.”

Overall, ADM reported $1.388 billion in segment operating profit for the fourth quarter, up from $1.139 billion during the same period of 2020. Adjusted segment operating profit was $1.413 billion, up from $1.152 billion. Earnings per share reached $1.38 for the fourth quarter, up from $1.22 during the fourth quarter of 2020. Adjusted earnings per share reached $1.50, up from $1.21.

For the full year 2021, ADM’s Carbohydrate Solutions reported $1.283 billion in segment operating profit, up from $717 million in 2020. Vantage corn processors reported $370 million in segment operating profit for last year, up from a $45 million loss in 2020.

ADM reported $4.638 billion in segment operating profit for 2021, up from $3.448 billion in 2020. Net earnings attributable to ADM were $2.709 billion, up from $1.772 billion. Diluted earnings per common share reached $4.79 for 2021, up from $3.15 for 2020.