ADM profits rise on higher selling prices
earnings, boosted by higher selling prices for its products,
including sweeteners and starches.
The agricultural and ingredients firm has posted net earnings for the quarter ended September 30 2007 of $441m, up nine percent from last year. According to the company's chairman and CEO Patricia Woertz, the firm benefited from its performance in sweeteners and starches, oilseed processing and in grain merchandising and handling. This is a stark contrast to the main earnings driver last year, which was ethanol production. This year, ADM saw a decline in ethanol sales, spurring a refocus on its food ingredients divisions. Woertz stated: "With out unique business model, spanning diverse markets, we are capturing value from changing market conditions." During the first quarter, ADM reported overall net sales of $12.8bn, a 36 percent increase on last year. However, three quarters of this increase was a result of increased selling prices. Higher sales volumes, principally vegetable oil and wheat, accounted for the remaining 25 percent increase. In its oilseeds processing segment, the firm reported a $39m increase in operating profit to $209m. This was principally due to strong global demand for protein meal and oil, it said. Worldwide crush volumes increased 2.4 percent to 7.2m metric tons. Corn Processing operating profit decreased $36m to $253m from $289m last year due principally to lower ethanol sales prices and volumes and higher net corn costs. Sweeteners and Starches operating profit increased $45m to $164m on higher average sweetener and starch selling prices partially offset by higher net corn costs. The firm saw a decrease in its wheat, cocoa and malt operating profits primarily due to decreased cocoa processing results as higher cocoa bean and carrying costs negatively impacted press margins. In August ADM announced it would reorganize its entire business operations in order to enhance its efficiency and pave the path for long-term success. The reorganization involved creating a single operations group, responsible for the company's origination, merchandising, processing and marketing functions.
