ADM’s Q3 profits surge 118% y-o-y on surging global grain demand

25 Oct 2022 | Euan Sadden

Net earnings for global agricultural commodities producer and trader Archer-Daniels-Midland Co. (ADM) surged by 118% in the third quarter of 2022 (July 1 to September 30) compared with the same period of last year, to $1.23 billion, or $1.83 per share ($1.86 on an adjusted basis), the company said Tuesday.

ADM’s net earnings in the first nine months ended September 30 reached $3.3 billion, up 74% from $1.9 billion in the previous year.

The increases came as the firm benefited from higher demand for food and fuel and tighter supplies after Russia’s invasion of Ukraine blocked grain export from the Black Sea regions.

ADM achieved “exceptional results” in its Ag Services & Oilseeds segment, with an operating profit in the third quarter increasing 74% versus a year ago to $1.075 billion.

Within the segment, operating profit in Ag Services reached $292 million, jumping over 711% from $36 million recorded in the previous year with higher volumes in North and South America underpinned by solid freight margins.

“The short crops in South America supported US exports, driving improved volumes and margins in North American origination, which had significant negative impacts from Hurricane Ida in the prior year,” the company said in its quarterly financial statement.

“South American origination saw improved volumes and margins driven by increased farmer selling in addition to higher volumes through our export facilities”, it added.

The crushing business delivered higher year-on-year increases in operating profit, with a surge of 24% to $346 million, supported by “resilient global demand” for meal and oil.

According to ADM, Stronger rapeseed margins in the EMEA region were matched by solid soybean crush margins in North America which helped offset lower crush volumes from idle facilities in Ukraine and Paraguay.

Operating profit in the first nine months of 2022 for Ag Services & Oilseeds came in at $3.2 billion, up $1.2 billion from $2.0 billion for the same period the previous year.

In the Carbohydrate Solutions segment, Q3 operating profit jumped 45% from the same period last year to $309 million on solid demand for ethanol and corn oil and higher ethanol and sweetener margins.

The nutrition segment saw operating profit increase to $177 million, up a 0.6% year-on-year, with strong demand for plant-based proteins within the human nutrition sub-segment offset by weaker demand for protein feed within the animal nutrition business.  

“Strong demand for plant-based proteins, as well as solid performance in texturants, drove continued growth in Specialty Ingredients,” the report said.

ADM's total revenue in the third quarter of 2022 reached $24.7 billion, up 22% from $20.3 billion in the same period of last year

Similarly, total revenue for the first nine months of 2022 was reported at 75.6 billion, up 22% year-on-year

“We’re well positioned to end 2022 strong, and carry that momentum into 2023,” said Chairman and CEO Juan Luciano.