ADM reports 35% y-o-y increase in Q1 net earnings

Net earnings at Archer-Daniels-Midland Co. (ADM) jumped 35% in the first quarter of 2022 to 1.1 billion, or $1.86 per share, compared with the same period last year, the company said on Tuesday.

The strong performance occurred as the global agricultural commodities producer and trader benefited from a weak South American harvest, tighter overall grain supplies and robust global demand.

The Ag Services & Oilseeds segment delivered a particularly strong quarterly result, with an operating profit of $1 billion, up 30% year-on-year.

Within this segment, operating profit Ag Services strengthened to $258 million, up 23% year-on-year, owing to lower supplies arising from the weak South American crop.

Similarly, operating profit for the crushing business increased 12% year-on-year to $428 million with strong global margins supported by robust protein meal and vegetable oil demand.

Operating profit within the Refined Products and Other subsegment increased 96% year-on-year to $198 million, supported by solid refining premiums underpinned by good refined oils demand in North America and strong biodiesel margins in the EMEA region.

ADM also experienced strong growth in its Carbohydrate Solution segment, with operating profit increasing 22% year-on-year to $317 million supported by higher corn co-product revenues, stronger citric acid profits in North America, higher sales volumes and margins in EMEA, and better sales volumes and margins in wheat milling.

Within this segment, Vantage Corn Processors delivered solid margins however position losses on ethanol inventory as prices fell early in the quarter resulted a weaker results versus the year before.

In the Nutrition segment, operating profit increased 23% year-on-year to $189 million supported by strong sales growth in alternative proteins within the Human Nutrition subsegment.

The Animal Nutrition business saw a near doubling of profits fuelled by higher prices for amino acids, stronger North American demand and disruptions to global supply chains.

With respect to the outlook for the remainder of the year, ADM expects that enduring global trends will support a stronger full year result in 2022 compared to the year prior.

“Looking forward, we expect reduced crop supplies — caused by the weak Canadian canola crop, the short South American crops, and now the disruptions in the Black Sea region — to drive continued tightness in global grain markets for the next few years,” said ADM Chairman and CEO, Juan Luciano.