US – American multinational food processing and commodities trading corporation Archer Daniels Midland Co. (ADM) has released Q3 results which depict a challenging quarter occasioned by the COVID-19 pandemic.
The company’s net earnings for the third quarter ended September 30, 2020 dropped to US$225 million from a high of $407 million recorded in the same period a year ago.
ADM’s revenue for the quarter slipped to US$15.12 billion compared to US$16.72 billion in the previous period.
ADM’s Ag Services & Oilseeds business recorded strong quarterly results, posting earnings of $436 million, which were far much better compared to $417 million recorded in the same quarter a year ago.
ADM’s Ag Services and Oilseeds performance is partly attributed to an improved capital position achieved through exits from no longer strategic assets.
These exits include; 71 grain origination locations, 6 oilseed facilities, 14 Golden Peanut and Tree Nuts locations and 7 ocean-going vessels.
ADM’s Carbohydrate Solutions results were also higher year-over-year with its subsegment, Starches and Sweeteners.
This segment, which includes grain milling saw a significant year-over-year operating profit increase of $246 million in the third quarter of 2020 compared to $182 million in the previous period.
According to ADM’s chief financial officer Ray Guy Young, Carbohydrate solutions performed better due to strong risk management, improved net corn costs and balanced ethanol industry supply and demand
The Nutrition business of the company delivered its fifth consecutive quarter of 20-plus year-over-year profit growth.
The Human nutrition subsegment also saw higher earnings than the previous quarter due to strength across the entire pantry, including flavors, plant-based proteins and probiotics.
Despite an overall weak Q3, ADM looks forward to a strong Q4
We expect to see strong North American exports in global crush margins in the fourth quarter, with results significantly higher than the third quarter of this year,” Ray Guy Young said.
On the Carbohydrate Solutions, Young said: “Reduced food service demand affected sweetener and flour volumes but we’re seeing good demand recovery for starches in North America.”
In Q4, ADM also expects nutrition to deliver another quarter of 20-plus percent year-over-year OP growth.
Focus on functional foods
“As consumers focus more and more on proactive approaches to health, we’re expanding the frontier in groundbreaking functional ingredients and supplements and paving the way to a new world of precision nutrition personalized for every individual,” Luciano said.
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