ADM reports strong Q4 earnings

ADM reports strong Q4 earnings

ADM ends 2013 on a strong note, with 33% higher segment operating profit.

ARCHER Daniels Midland Co. (ADM) recently reported financial results for its fourth quarter ended Dec. 31, 2013.

The company reported adjusted earnings of 95 cents per share, up 58% from 60 cents per share in the same period last year.

Net earnings for the quarter, which were negatively affected by charges related to the failed acquisition of Australia's GrainCorp and to ADM's Brazilian sugar mill, were $374 million, or 56 cents per share, down from 77 cents per share in the same period one year earlier. Excluding the specified items, segment operating profit was $1.0 billion, up 33%.

"The team delivered a strong finish to the year," ADM chair and chief executive officer Patricia Woertz said. "Lower corn costs and improved ethanol margins helped support a significant improvement in our corn business. Our great oilseeds performance was driven by our ability to meet robust global demand for meal and by improved biodiesel results in North America and Europe. However, our Ag Services business was impacted by the slow farmer selling of corn and challenges in international merchandising."

Oilseeds Processing operating profit in the fourth quarter was $478 million, up $67 million from the same period one year earlier (Table). Crushing and origination operating profit was $252 million, comparable to last year's strong quarter.

ADM's North American soybean crushing operations had strong margins as they processed record volumes amid solid domestic and export demand. South American earnings improved on strong crushing and origination results and solid contributions from ADM's crushing facility in Paraguay.

Refining, packaging, biodiesel and other generated a profit of $168 million for the quarter, up $118 million on strong performance across the food ingredient businesses and improved biodiesel results in North America and Europe.

Oilseeds Processing results in Asia for the quarter were up $4 million from the same period last year, principally reflecting ADM's share of improved results from Wilmar International Ltd.

Corn Processing operating profit of $315 million represented an increase of $296 million from the same period one year ago. These numbers exclude specified items, including an impairment related to the sugar mill in Brazil. The timing of corn hedging had a positive impact of $25 million versus a negative impact of $16 million in the year-ago period.

Sweeteners and starches results improved $68 million to $181 million as net corn costs improved dramatically and overall demand remained seasonally solid.

Bioproducts results increased $228 million to $134 million, with strong domestic and international demand for ethanol driving significantly improved margins.

Agricultural Services operating profit in the fourth quarter was $201 million, down $54 million from the same period one year earlier. These numbers excluded specified items, which were mostly related to GrainCorp.

Merchandising and handling earnings declined $45 million to $84 million on poor international merchandising results and lower U.S. merchandising profits from slower farmer selling of corn and from fewer wheat merchandising opportunities. International merchandising results were reduced by merchandising and execution issues.

Transportation results were flat, at $47 million. Milling and other results remained solid as the milling business continued to perform well.

"Looking ahead, we continue to see strong global demand for our products and large crop supplies. We expect continued good utilization of our North American network until South America's large harvest reaches global markets," Woertz said.

 

ADM segment operating profit, million $

 

-4th quarter-

-Year-

Segment

2013

2012

2013

2012

Oilseeds Processing

 

 

 

 

Crushing and origination

252

261

835

931

Refining, packaging, biodiesel and other

168

50

454

241

Cocoa and other

(10)

36

(33)

276

Asia

68

64

217

172

Total Oilseeds Processing

478

411

1,473

1,620

Corn Processing

 

 

 

 

Sweeteners and starches (excl. timing effects)

181

113

520

430

Bioproducts (excl. timing effects and charges)

134

(94)

380

(133)

Corn hedge timing effects*

25

(16)

(15)

(9)

Asset impairment charges*

(61)

0

(71)

0

Restructuring and exit costs*

0

0

0

(10)

Total Corn Processing

279

3

814

278

Agricultural Services

 

 

 

 

Merchandising and handling (excl. charges)

84

129

188

415

GrainCorp specified items*

(155)

62

(155)

62

Milling and other (excluding charge)

70

78

270

337

Asset impairment charge*

0

0

0

(146)

Transportation

47

48

77

111

Total Agricultural Services

46

317

380

779

Other

 

 

 

 

Financial

22

77

41

91

Total segment operating profit

825

808

2,708

2,768

Adjusted segment operating profit*

1,016

762

2,949

2,871

*Adjusted segment operating equals segment operating profit adjusted for specified items.

 

Volume:86 Issue:08

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