USA – Agricultural processor and food ingredient provider, Archer Daniels Midland (ADM) reported a 24% decline in net income to US$407 million during the third quarter ending September as the company battled through challenging external conditions.
Despite the challenging environment, ADM managed to lift it net sales by 5.9% to US$16.726 billion benefiting from a strong year-over-year growth in its nutrition business.
The company’s operating profits from the Nutrition business climbed to US$118 million, from US$67 million in the third quarter last year while sales grew 58% to US$1.457 billion, up from US$922 million.
The growth was substantially driven by contributions from Neovia and improvements in vitamin additives. In specialty ingredients, the protein business continued to expand amid the growing consumer market for alternative proteins.
Sales in the company’s carbohydrate solutions division were substantially lower. Results in North America were affected by higher net corn costs partly offset by lower manufacturing costs, which included improvements at the Decatur corn complex.
Operating profit in the newly combined Ag Services and Oilseeds segment went down 13% to US$417 million in the third quarter despite sales increasing to US$12.616 billion from US$12.260 billion in a comparable period last year.
Despite a difficult external environment, the company said that it delivered solid third quarter results consistent with the perspectives provided last quarter.
“We maintained our focus on serving our customers and advancing our strategic goals, and continued to realize the benefits of the actions that we took earlier this year,” said Chairman and CEO Juan Luciano.
“We are excited about our strategic growth activities, and particularly our participation and leadership in major global trends such as flexitarian diets, nutrition for health, and sustainable materials.
“We have invested in assets, platforms and technological capabilities to serve and grow with our customers, who are embracing these market-changing trends.
“While external conditions for certain businesses may remain fluid and potentially challenging in the near term, our growing leadership position in major global trends, and our strength in innovation, efficiency, and customer service, position us well for stronger results in 2020 and beyond.”
Year-to-date net income declined 42% to US$875 million from US$1.495 billion posted in the same period year ago while revenues declined to US$48.327 billion from US$48.394 billion.