NETHERLANDS – Louis Dreyfus Company (LDC) credits its diversified global footprint for the resilient performance of Grains & Oilseeds platform in 2022 as it reported a 44% increase in net profit, netting just over US$1 billion compared to US$697 million in 2021.
Reporting its financial performance on March 2022, LDC cited significant challenges affecting the Grains and Oilseeds platform in 2022.
These challenges included the impact of the Russia-Ukraine crisis on the wheat and corn business lines, the new forex system for farmers in Argentina, the energy crisis in the EU, and government export interventions on palm oil in Indonesia and wheat in India.
However, despite these challenges, the agribusiness giant had record sales and profits in the 2022 financial year, asserting its position as a global leader in commodity trade, keeping essential food and agricultural supply chains moving safely.
“Despite new and unprecedented challenges and disruptions, LDC further diversified its geographic and commercial portfolio to preserve global access to essential products, always with a focus on the safety and well-being of its teams around the world as a priority,” said Margarita Louis-Dreyfus, Chairperson of LDC’s supervisory board.
Margarita also insisted on the importance of collaboration across value chains in finding solutions to common challenges and providing sustenance for people worldwide.
Supported by overall strong demand for products commercialized by LDC and a rise in prices, the company’s net sales reached US$59.9 billion for 2022, up from US$49.6 billion in 2021 despite a 1.3% decrease in shipped volumes.
The value chain segment operating results stood at US$1,817 million for the year, up 52.6% from 2021, while the merchandising segment operating results were US$794 million, up 23.5% from 2021.
According to LDC, these impressive results, especially for the Grains and Oilseeds platform, were slightly offset by limited and costly logistics in the Europe, Middle East, and African regions, which relied on the Black Sea route for commodity transport.
The company’s earnings before interests, taxes, depreciation, and amortization (EBITDA) reached US$2.35 million, compared with US$1.62 billion in 2021, while the Return On Equity, Group Share was 18.7%, up from 14.3% for the year 2021.
“In the face of strong headwinds, we remained focused on keeping essential food, feed, fiber, and ingredient supply chains moving to meet commitments to customers worldwide and secure continued financial and operating performance in 2022 while advancing with our strategic growth plans,” said Michael Gelchie, CEO of LDC.
Moreover, despite the last few years, the dutch agri-giant had various investments in 2022 that aim at increasing the capacity of this company to continue being a global leader in commodity trade and supply chain solutions provider.
“As we step up the activation of our strategic plans to maintain the positive momentum we have built, we are adapting to the fundamental shifts we see playing out; such as evolving consumption trends toward alternative proteins and healthier diet options, digitalization, and disruptive innovation in agriculture and food production, and accelerating developments to address the increasingly urgent need for a more sustainable food system,” Gelchie added.
2022 investments in Grains and Oilseeds Platform
LDC acquired Emerald Grain, a leading grain handler in Australia. Moreover, LDC committed to constructing a joint-venture food industrial park in Guangdong, China, to enhance its capacity to meet China’s evolving consumer needs and growing demand for high-quality food, and also expanded its range of Mastergold cooking oils for the Chinese market.
Additionally, the LDC launched a new lecithin plant in Indiana, United States, to support the feed industry, a new R&D facility in California, US.
In Argentina, LDC launched a new tool for soy producers to make soy traceability declarations 100% digital and reinforced storage logistics by acquiring a new warehouse in Salta Province.
In Africa, LDC began the construction of new tanks in Abidjan, Côte d’Ivoire, to double the local capacity to store palm oil upon expected completion in 2023.
LDC also noted that it took steps in its sustainability and decarbonization journey in 2022, including its commitment to eliminate deforestation by the end of 2025, and is part of LDC’s upcoming Sustainability Report.
“The 33.6% emissions reduction target we announce today for scopes 1 and 2 by 2030 builds on the work of our Carbon Solutions team last year with all our business lines, to measure LDC’s emissions profile as a basis for target-setting and reporting,” Gelchie commented.