ADM reports 5.8% rise in full-year revenues with lower earnings in Q4

USA – Archer Daniels Midland Company (ADM) has reported lower than expected earnings in the Q4 while full-year revenues increased by 5.8% to US$64.34 billion boosted by major business segments.

In the year ended December 31, the company’s largest segment, origination, recorded a 3.9% increase in revenues while this declined in the fourth quarter, registering 29.9% dip in adjusted operating profit to US$183 million.

Corn and soybean exports to markets outside China increased while North American results benefited from wheat basis gains due to strong carries, as well as solid execution that drove improvements in export margins and comparable year-over-year export volumes.

“Our team executed well, delivering strong year-over-year profit growth in the fourth quarter,” said Chairman and CEO Juan Luciano.

“Our effective management through complicated and rapidly changing trade, geopolitical and market conditions helped deliver an impressively strong 2018 that included solid profit growth, improved returns on invested capital and higher cash flows.”

Oilseeds raised a spectacular performance more than doubling the prior year period attributed to crushing and origination.

Higher year-over-year results from food oils were partially offset by challenging market conditions in nut processing.

Wilmar results boosted performance in China.

Starches and Sweeteners segment was driven by lower margins and sales in EMEA, offset by higher costs in North American liquid sweeteners, in part due to lower production rates at the Decatur complex; and lower co-product income.

Nutrition declined despite strong contribution from the recently acquired businesses, WILD Flavors and Health & Wellness.

Lecithin saw strong demand but compressed margins in amino acids, including lysine weighed down the animal nutrition segment.

“We will continue working to deliver shareholder value in 2019 by vigorously executing our strategy, including aggressively working to improve execution in select businesses, accelerating our Readiness efforts to deliver increasing value, and harvesting the contributions from our acquisitions and organic growth investments,” said Juan Luciano.

ADM Board of Directors declared a cash dividend of 35.0 cents per share on the company’s common stock, a 4.5% increase from last quarter’s dividend of 33.5 cents per share.