The Chicago Illinois-based company ascribed the record growth in profits to robust soy crushing margins and hefty global demand for crops in Q2 that ended Dec 31, 2022.
The net income was equal to US$7.71 per share on the common stock, up 60% from US$4.79 per share, in fiscal 2021.
According to Juan Luciano, Chairman and CEO of ADM, the results showed how one of the world’s top agricultural trading houses has been able to navigate through a web of agricultural issues including the War in Ukraine, supply bottlenecks, and drought-driven shipment declines from the US and South America.
Additionally, Mr. Luciano said that the company “hit in all cylinders” in 2022 in its Agricultural Services and Oilseeds segment.
He outlined that, the operating profit in the Ag Services and Oilseeds segment surged 58% in fiscal 2022 to US$4.39 billion, while profit in the quarter that ended Dec,31 rose 46% to US$1.18 billion.
Within the segment, ag services operating profit climbed 78% year-over-year to US$1.37 billion while crushing profit soared 66% to US$1.62 billion, and refined products and others increased 28% to US$837 million.
“North America had a strong meal demand and certainly very strong domestic demand for oil, we also see a strong potential for crush margins in Europe, given the bad crop in Argentina and the fact that Europe will continue to export biodiesel to the US,” added Luciano.
In the carbohydrate solutions segment, the company recorded a Year-over-year operating profit of 6% high in fiscal 2022 to US$1.36 billion, but fourth-quarter profit declined by 39% to $261 million.
Interestingly, starches and sweeteners profit rose 45% during the full year and 39% in the fourth quarter while vantage Corn Processors posted an operating profit of $370 million in the full year, up sharply from US$37 million in fiscal 2021.
However, ADM shares were down 1.5% at US$84.28, which Mr. Luciano attributed to the disappointing Nutrition-segment result, which was below the consensus analyst estimate.
In the Nutrition segment operating, the decline was recorded in the fourth quarter at US$131 million from $160 million compared to a 6.5% (US$736M -US$691M) profit realized in fiscal 2021.
Although Luciano has warned of softer results offsetting lower earnings from ethanol operations and the Nutrition segment, Vikram Luthar, chief financial officer, said ADM expects its Nutrition business to continue on a positive growth trajectory for the full year of 2023.
He added that the Nutrition segment will include more than 10% profit growth and a similar level of revenue growth in 2023.
But the company is optimistic that 2023 will be a great year for business in North America and Europe. “As we look forward to 2023, we expect another very strong year,” Chief Executive Juan Luciano said.