Decatur / IL. (adm) Archer Daniels Midland Company (ADM) reported financial results for the quarter ended Sept. 30, 2013. The company reported adjusted earnings per share of 0,46 USD, down from 0,53 USD in the same period last year. Net earnings for the quarter were 476 million USD or 0,72 USD per share, up from 0,28 USD per share in the same period one year earlier. Segment operating profit1 was 606 million USD, down six percent when excluding an impairment charge from the year-ago quarter.
«The team delivered solid operating results overall, despite the lingering effects of the 2012 U.S. drought», said ADM Chairman and CEO Patricia Woertz. «Oilseeds performed well, particularly in North and South America; Corn benefited from improved ethanol margins; and Ag Services managed effectively through the transition to new crop. Looking forward, as record global crop supplies refill the pipeline, we will employ our efficient network to meet strong demand from customers around the world».
Third Quarter 2013 Highlights
- Adjusted EPS of 0,46 USD excludes approximately 298 million USD in pre-tax LIFO credits or 0,28 USD per share and other items totalling (0,02 USD) cents per share.
- Oilseeds Processing profit increased 25 million USD as North American operations effectively managed through the transition between old and new crop.
- Corn Processing profit increased 91 million USD on improved results from ethanol.
- Agricultural Services profit declined 122 million USD when adjusting for impairment charges in the year-ago quarter. Current-period performance was impacted by low U.S. exports and weak international merchandising results.
- ADM´s net debt continued to fall, reflecting strong cash flows from lower commodity prices and a focus on cash generation. Net debt reached 3,4 billion USD, down from 8,8 billion USD a year ago.
Adjusted EPS of 46 Cents, down seven Cents
Adjusted EPS decreased primarily due to lower Agricultural Services operating profit. This quarter, the company´s estimate of its full-year effective tax rate was 30 percent. This quarter´s effective tax rate of 32 percent includes the resultant year-to-date true up in tax expense and discrete items of twelve million USD, net. The effective tax rate for the prior-year quarter of 38 percent was negatively impacted by asset impairment charges and other items.
Oilseeds Earnings Strong on North and South American Performance
Oilseeds operating profit in the third quarter was 361 million USD, up 25 million USD from the same period one year earlier. Crushing and origination operating profit was 242 million USD, down 14 million USD from the year-ago quarter. Despite tight crop supplies, ADM´s North America oilseed crushing operations had good capacity utilization amid good foreign and domestic protein meal demand. In South America, ADM exported large volumes at the peak of the inverse market, capturing strong margins. European crushing results declined due to limited soybean availability. Refining, packaging, biodiesel and other generated a profit of 85 million USD for the quarter, up 57 million USD on improved biodiesel results and record profits from protein specialties. Cocoa and other results continued to improve sequentially, though they decreased 24 million USD compared to the year-ago quarter. Oilseeds results in Asia for the quarter were up six million USD from the same period last year, principally reflecting ADM´s share of the improved results from Wilmar International Limited.
Corn Processing Results Improved on Ethanol Margin Recovery
Corn processing operating profit of 159 million USD represented an increase of 91 million USD from the same period one year earlier. Corn hedge effects in the third quarter were a charge of eleven million USD, versus a charge of 31 million USD in the year-ago period. Excluding the impact of corn hedge ineffectiveness, sweeteners and starches results declined by 26 million USD, with overall demand and margins remaining solid. Excluding the impact of corn hedge ineffectiveness, bioproducts results increased 97 million USD to 71 million USD. Overall ethanol margins remained profitable though volatile.
Agricultural Services Impacted by Lower U.S. Volumes
Agricultural Services operating profit was 102 million USD, up 24 million USD from the same period one year earlier. When adjusting for year-ago charges related to Gruma and intercompany insurance settlements in the current period of approximately 30 million USD, results for the segment declined 152 million USD from last year. Merchandising and handling earnings declined 104 million USD to four million USD, as low U.S. crop supplies reduced export volumes and as results from international merchandising were weak. Transportation results increased two million USD to 21 million USD on good northbound barge freight business. Milling and other results remained solid as the milling business continued to perform well.
