USA—Archer Daniels Midland Company (ADM) has announced its financial results for the second quarter ending June 30, 2024, showcasing resilience despite challenging market dynamics.
For the second quarter, ADM reported net earnings of US$486 million and adjusted net earnings of US$508 million.
Earnings before taxes were US$596 million, while segment operating profit stood at US$1,014 million. Adjusted segment operating profit was US$1,021 million. The trailing four-quarter average return on invested capital (ROIC) was 8.9%, with a trailing four-quarter average adjusted ROIC of 9.7%.
Juan Luciano, Chair of the Board and CEO, commented, “ADM delivered solid results this quarter despite challenging market conditions. We are pleased with our progress against our 2024 priorities and strategic initiatives.”
The Ag Services & Oilseeds (AS&O) segment faced impacts from large South American crops and shifts in farmer selling behaviors, resulting in lower results. However, ADM anticipates improved margin opportunities for the remainder of the year.
The Carb Solutions segment reported strong performance, driven by favorable margins in Starches and sweeteners and ethanol. Additionally, efforts to recover profitability in the Nutrition segment yielded sequential improvements, positioning the segment for continued growth.
During the same period, however, ADM reported earnings before taxes of US$596 million, down 47% due to lower pricing and execution margins and higher corporate unallocated costs.
Adjusted segment operating profit was US$1,021 million, a 37% decrease from the previous year, primarily due to lower crush and origination margins. Adjusted earnings per share were US$1.03, reflecting a $1.03 per share decline versus the prior year period.
Earnings before taxes were US$1,481 million for the first half of 2024, down 41% due to lower pricing and execution margins and higher corporate unallocated costs.
Adjusted segment operating profit was US$2,338 million, a 30% decrease compared to the prior year. Adjusted earnings per share were US$2.49, a decline of US$2.02 per share primarily reflecting lower crush and origination margins and mark-to-market timing impacts.
Improved input and manufacturing costs, mainly from lower energy costs, led to an increase of $0.08 per share, partially offset by a US$0.10 negative impact from unplanned downtime at Decatur East.
Volume improvement represented a US$0.37 per share increase, mainly from higher processed volumes in AS&O. Share repurchases contributed US$0.21 per share of benefit compared to the prior year period.
In the Crushing subsegment, global soybean crush margins decreased due to balanced supply and demand conditions and lower soybean oil values. Refined Products & Other (RPO) results were lower, with refining margins easing from historical levels due to increased pre-treatment capacity and higher imports of used cooking oil. Equity earnings from Wilmar were US$68 million during the quarter.
The Carbohydrate Solutions segment operating profit was US$357 million for the second quarter, up 12% compared to the prior year period. Strong demand for starches, sweeteners, and ethanol contributed to this growth.
The Nutrition segment’s operating profit was US$109 million for the second quarter, down 36% compared to the prior year period.
The Human Nutrition subsegment’s operating profit was US$103 million, approximately US$82 million lower due to unplanned downtime at Decatur East, a normalizing restaurant market, and higher manufacturing costs.
In the Animal Nutrition subsegment, operating profit of US$6 million was higher year-over-year due to cost optimization efforts and lower input costs.
ADM reaffirms its full-year adjusted earnings per share guidance, expecting it to range between US$5.25 and US$6.25.
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