ADM reports strong Q2 performance for ethanol

Archer Daniels Midland Co. on July 26 reported its ethanol-related business segements benefited from good gasoline demand, strong ethanol blending economics and $50 million in COVID-19 relief funds during the second quarter.

In its second quarter earnings release, ADM said that its Carbohydrates Solutions business segment achieved significantly higher results during the second quarter of 2022 when compared with the same period of last year. The company’s Starches and Sweeteners subsegment, including ethanol production from wet mills, delivered much better results due to solid demand as food service volumes reached close to pre-pandemic levels. Corn co-products, including strong demand for corn oil and effective risk management, drove higher ethanol and sweetener volumes, according to ADM.

The Vantage Corn Processors subsegment reported results that were slightly higher. ADM, in part, attributes the increase to good gasoline demand and strong ethanol blending economics. The company also reported it received $50 million in COVID-19 relief funds from the USDA, which ADM said helped offset the prior year’s strong industrial alcohol results from the now-sold Peoria facility as well as valuation losses on ethanol inventory as prices fell late in the quarter.

Vikram Luthar, chief financial officer at ADM, said the company expects significantly improved results in the third quarter for these segments driven by steady demand for the company’s products and favorable ethanol blending economics.

ADM reported $473 million in operating profit for Carbohydrate Solutions, up from $383 million during the second quarter of last year. Starches and Sweeteners reported $393 million in operating profit, up from $306 million, while Vantage Corn Processors reported $80 million in operating profit, up from $77 million.

Overall, ADM reported $1.84 billion in segment operating profit, up from $1.145 billion. Net earnings were at $1.236 billion, up from $712 million. Diluted earnings per common share reached $2.18, up from $1.26 during the second quarter of 2021.