ADM profits up on stronger oilseed, corn processing demand

By Caroline Scott-Thomas

- Last updated on GMT

Related tags: Generally accepted accounting principles, Adm

Archer Daniels Midland (ADM) has seen its net profit increase by 15 percent during fiscal 2010, driven by stronger demand and improved margins, particularly in oilseeds and corn processing.

Revenue was down during the fourth quarter to $15.7bn from $16.5bn a year earlier, however processing volumes were up, and the cost of goods sold fell 8.6 percent compared to the same period in 2009.

Chairman of the board and CEO Patricia Woertz said in a statement: “The ADM team finished strong, capping a very good year with very good fourth-quarter performance. As we begin our new fiscal year, our large projects are nearly finished, and we commit to use our strong balance sheet and cash flow to deliver shareholder value.”​ Lower income for sweeteners and starches during the quarter ended June 30 was more than offset by the company’s ethanol business, leading to a $140m net profit for its corn processing division.

And its oilseeds division was boosted by increased demand for protein meal for animal feed, as rapidly changing diets in China and other developing nations move toward increased meat consumption. ADM’s oilseeds division, its largest by volume, saw profits soar 58 percent.

New soybean processing capacity

The company also announced its intention to build a soybean processing facility in Paraguay, which would increase its soy crush capacity in South America by 25 percent, ADM said on Tuesday.

The new facility is expected to have a daily crush capacity of 3,300 metric tons. It will be located next to the company’s fertilizer-blending plant in Villeta, near Asuncion, and will benefit from its proximity to a nearby port facility on the Paraguay River, the company said.

“ADM will grow oilseed crush volumes over the next five years at about double predicted market rate. We will achieve a compound annual growth rate of seven to ten percent through both organic growth and acquisitions,” ​said executive vice president, Commercial and Production, John Rice.

The company expects construction to be complete in 2012.

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