NETHERLANDS – Louis Dreyfus Company (LDC) has reported a drop in both net sales and net income for the first half of 2024, reflecting persistent geopolitical, macroeconomic, and environmental hurdles.
For the period ending June 30, net sales amounted to US$25.6 billion, slightly down from US$25.8 billion a year ago, while net income dropped to US$489 million from US$568 million.
Segment operating results also fell from US$1.316 billion to US$1.284 billion, highlighting the impact of these challenges on the company’s profitability.
Despite these declines, LDC increased shipping volumes by 19.4%, leveraging its global presence to capitalize on favorable opportunities.
CEO Michael Gelchie pointed out that the company faced a challenging global trade environment due to logistical disruptions caused by ongoing geopolitical crises, volatile import demands, and uncertain crop forecasts influenced by extreme weather events.
Nonetheless, LDC’s diversified business model allowed the company to mitigate some of these pressures, as the overall recovery in crop sizes and ample stock levels globally reduced market volatility compared to the same period in 2023.
The Grains & Oilseeds Platform, while moving higher volumes, saw lower margins due to reduced opportunities in soybean and corn markets, especially in China and North America.
Processing margins in North America dropped due to ample biofuel and feedstock availability, leading to lower prices. The Brazilian market also struggled with record-low farmer selling and crop failures, which negatively impacted origination margins.
However, Argentina showed improvement, with margins rebounding from a poor performance in 2023.
LDC also continued its investment strategy, with a 30% increase in capital expenditure year-on-year. Key initiatives include expanding crushing capacity in North America and diversifying its downstream offerings.
For example, LDC launched the Montebelo Brasil bottled juice brand in France and introduced a refreshed edible oils brand, Vibhor, in India. Furthermore, LDC’s acquisition of a soluble coffee producer in Brazil is expected to contribute to its diversification and growth strategy in the coming years.
In terms of sustainability, LDC has strengthened its commitment to regenerative agriculture and habitat conservation.
The company continued promoting sustainable practices, such as encouraging camelina cultivation in Latin America for renewable fuels and animal feed. LDC’s efforts to decarbonize its operations and supply chains are also part of its broader goal to shape more sustainable food and agriculture systems.
CEO Gelchie remains optimistic about the company’s trajectory, expressing confidence in LDC’s ability to continue transforming and generating sustainable value for stakeholders in the global agricultural supply chain.
“Building on our satisfying performance in the first half of the year, and through continued collaboration with our business and other partners, I am confident that we will continue to accelerate LDC’s transformation trajectory and create fair and sustainable value for stakeholders across food and agriculture chains,” Gelchie said.
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