NETHERLANDS—Viterra Ltd., a major global agricultural commodities company, has reported a drastic drop in net income for the first half of 2024, attributed to lower commodity prices and tighter margins across the industry.
The company’s net income fell to US$70 million, a sharp decline from the US$141 million it earned during the same period in 2023.
According to Viterra’s 2024 half-year report, covering the period ending June 30, total revenues dropped by 22%, reaching US$22.57 billion compared to US$28.76 billion in 2023. The company’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) also took a hit, falling to US$691 million from US$1.08 billion, a decline primarily driven by a lower gross margin.
The company’s sales volume in core commodities like wheat, corn, soybeans, and soybean meal reached 62 million tonnes, which was 3% lower than the 63.9 million tonnes sold during the same period last year. Grain marketing volumes saw a slight decrease to 38.8 million tonnes, down 1% from 39.1 million. Oilseeds volume dropped more significantly, falling by 6% to 22.1 million tonnes from 23.4 million.
David Mattiske, CEO of Viterra, explained the reasons behind the declines:
“During the first half of the year, we witnessed a significant recovery to crop production across regions that were severely impacted by dry weather conditions in 2023. While the demand for agricultural commodities remains strong, increased supply has been tempered by previously volatile markets, resulting in lower commodity prices and tighter margins across the industry.”
Merging with Bunge to Bolster Competitiveness
Despite the challenging financial figures, Viterra remains optimistic about its future as it moves toward a significant merger with Bunge Global SA, a US-based agribusiness company.
This merger, once finalized, is expected to create one of the world’s largest agribusiness firms, positioning Viterra to compete more directly with industry giants like Cargill and Archer-Daniels-Midland (ADM).
Viterra has already secured conditional approval for the merger from the European Union, following the divestment of parts of its oilseeds processing business in Hungary and Poland.
The divestment was necessary to satisfy EU regulators’ concerns about competition.
“While we are disappointed we were not able to retain this highly valued part of our network, particularly our talented colleagues, we are pleased to receive conditional approval in Europe and with only a small number of jurisdictions outstanding,” said Mattiske.
Now, the focus turns to gaining approval from regulators in Canada and China, key markets for both Viterra and Bunge.
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