CHICAGO – ADM has reported its financial results for the quarter ended December 31, 2017, with net earnings of US$788 million, including favourable U.S. tax reform impacts 2017 annual ROIC of 6.4%, above WACC of 6.0%.
According to the company, the EPS as reported of US$1.39 includes a US$0.08 per share charge related to asset impairments and restructuring activities and a positive US$0.65 per share net tax adjustment primarily related to U.S. tax reform.
The company also returned US$1.5 billion to shareholders through dividends and share repurchases, in the course of 2017.
“We ended 2017 with a solid fourth quarter.
We pulled the levers under our control- including cost and capital initiatives and interventions throughout the year- to deliver value for shareholders,” said ADM Chairman and CEO Juan Luciano.
“I am also proud that our more than 31,000 colleagues delivered the best quarterly employee safety record in ADM’s history.”
Corn Processing results increased over the prior-year fourth quarter, while sweeteners and starches had another strong quarter, with solid earnings growth over the prior year in both North America and EMEA.
Lower year-over-year results in Bioproducts due to lower ethanol margins were partially mitigated by favourable risk management.
Oilseeds processing results were down compared to the fourth quarter of last year. Crushing and origination results were lower due to weak crush margins, despite strong crush volumes and continued growth in demand.
Other results decreased due to unfavourable underwriting performance from the company’s captive insurance operations compared to favourable underwriting income in the prior year period.
“For 2017 as a whole, we grew earnings per share, improved returns on invested capital and generated positive EVA.
Looking ahead, we expect improving results through 2018 as our strategy advances.
Our increasing international presence and expanding capabilities in areas such as destination marketing, food and beverage innovation, and health and wellness, all help to position ADM for continued growth and value creation,” said Juan.
In corporate results, unallocated corporate costs for the quarter decreased due to lower employee costs and the absence of certain costs incurred last year.
Minority interest and other charges for the quarter include several individually insignificant restructuring charges totalling US$7 million (US$0.01 per share) compared to last year’s U.S.
OPEB curtailment gain was US$38 million (US$0.04 per share) with restructuring charges of US$3 million.
Income tax expense for the quarter decreased US$379 million (US$0.67 per share) due to the estimated effects of U.S. tax reform.
Excluding the effects of U.S. tax reform, the Company’s effective tax rate would have been 24% for the quarter and year.