LDC loses $60 million on Russian divesture, maintains presence in Ukraine

21 Mar 2024 | Masha Belikova

The Louis Dreyfus Company (LDC) reported a $60 million loss for 2023 amid the deconsolidation of its Russian business, but it will maintain its presence in Ukraine, the company said in its 2023 financial results.

The loss was attributed to the divesture of its business in Russia. On April 3, 2023, the company stopped grain exports from Russia and started to sell its business and assets in the country “on terms that satisfy the requirements of the Russian authorities.”

This follows a loss in 2022 linked to the development and construction of a deep-sea terminal for agricultural commodities in Taman in southern Russia, which LDC had entered into a joint venture with Infragos Consortium in 2012.

At the same time, LDC has maintained its presence in Ukraine, with the report saying that company “has no intention” to discontinued its business in the country for the foreseeable future.

“In Ukraine, all property, plant and equipment held are in a condition to run, and management has no intention to discontinue the business in the foreseeable future. Additionally, subsidiaries in Ukraine can access financing to meet their short-term financial obligations, and cash is not restricted,” the report said.

LDC held total assets of $211 million and total liabilities of $126 million in the country.

The report also showed that the net sales dropped by 15.5% in 2023 year compared with 2022, a year with significant increases, amid a decrease in global commodity prices.

LDC’s net sales dropped to $50.6 billion in 2023, while earnings before interest, taxes, depreciation and amortization declined by 5% to $2.222 billion compared with 2022.

Net income, however, was nearly stable at $1.013 million compared with $1.006 million in 2022.

“Market volatility decreased in 2023, compared with 2022, as logistical bottlenecks eased, while the ongoing Russia-Ukraine crisis, export quotas in India, the devaluation of the Argentine peso, and concerns about the slowdown in global growth and uncertain crop size prospects continued to cause disruptions,” the report said.

Crush capacity investments
LDC will continue to investments into its processing capacities, in particular adding a 1.3 million tonnes of crushing capacity at oilseeds processing facility in Zhangjiagang, Jiangsu Province, China, along with completing the first phrase of construction at its joint venture Fuling Food Industrial Park in Guangzhou.

In Canada, LDC has doubled its annual crush capacity in canola processing complex in Yorkton, Saskatchewan, while in US, it announced construction on a soybean processing plant in Upper Sandusky, Ohio, which will begin in 2024.

According to LDC, this development strengthening its core merchandizing capabilities with additional capacity to originate and process US soy into value-added products, and will provide opportunity to participate in renewable energy feedstock markets and help meet growing demand for biofuels.