Agri-business group, Archer Daniels Midland (ADM), released its financial results for the quarter ended December 31, 2019 yesterday.
Net earnings rose 60% to $504m for Q4, while total revenue rose 2.4% to $16.33bn, it said.
The Q4 results beat analysts’ expectations, according to media reports.
The Neovia business continued to contribute positively to the good results in the animal nutrition division, partially offset by continued losses in lysine due to a weak global pricing environment, said ADM.
Also, on the nutrition side, the Wild Flavors & Specialty Ingredients (WFSI) business results were significantly higher than Q4 2018, said the company. Strong sales and margins for WILD in North America, EMEAI and APAC drove results for the quarter, it said. In its specialty ingredients business, lower sales volumes and margins in emulsifiers and reduced margins in edible beans were partially offset by continued margin growth in proteins. Its health and wellness business benefited from a new strategic agreement for ADM fermentation capacity, added the grain trader.
Oilseed crushing, trading
The financial performance of its ag services and oilseeds division were, overall, positive, higher year over year, and included around $270m net operating profit impact from the passage of the biodiesel tax credit (BTC) for 2018 and 2019, explained ADM. That credit allowed for a $1-per-gallon subsidy for fuel made from cooking oil, soybean oil and animal fats.
Ag services results were slightly lower year over year due to challenges such as a delayed US soybean and corn harvest, which ADM said contributed to lower export volumes and correspondingly lower margins. The situation was partially offset by South America results, which benefited from improved margins driven by good export demand and farmer selling.
In its crushing division, margins remained solid, reported ADM, though substantially lower than the near-record levels last year.
Its refined products business posted “substantially” higher results.
“Looking ahead, we’re excited about the opportunities we see in 2020 and beyond. We expect market conditions to improve as the year progresses, particularly as impacts from the US-China Phase 1 trade deal take hold. More importantly, another year of expected 20-plus percent growth in nutrition profitability, combined with our work to improve business performance, advance readiness, and harvest our growth investments, give us confidence in strong results in 2020 and the years to come,” said CEO, Juan Luciano.