In an April 26th release, Archer-Daniels-Midland Corp. (ADM) posted financial results for the 1st quarter of fiscal 2022. This Company can be regarded as a bellwether for ‘Mega-Ag’ and the commodities sector. Along with competitors Bunge, Cargill, Cofco and Dreyfus, all are subject to the risks of currency fluctuation, geopolitical events, climatic extremes, and increased cost of ingredients, labor and transport in a competitive world environment still restrained by COVID.
For the 1st Quarter of FY 2022 ending March 31st, net income was $1,054 million on total revenue of $23,650 million. Comparable figures for the 1st quarter of fiscal 2021 ending March 31st 2020 were net income of $689 million on total revenue of $18,893 million. EPS rose from $1.22 for the 1st quarter of fiscal 2021 to $1.86 for the most recent quarter.
In commenting on results, Chairman and CEO Juan Luciano stated “I’m very proud of how our team lived our culture and fulfilled our purpose over the last quarter, as they continued to serve the world’s need for nutrition in a dynamic global environment,” He added “Our first quarter financial results, including adjusted earnings per share of $1.90, reflect an extension and amplification of the factors that drove our 2021 performance: great execution by our team, including exceptional growth in Nutrition and effective risk management; a tighter supply environment, especially with the smaller South American crop; and robust and resilient demand. Importantly, I’m also very appreciative of how our company has rallied to support our colleagues in Ukraine and the country’s agriculture industry.
In concluding, Luciano stated “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. Longer term, markets continue to reflect the importance of the enduring global trends that are fueling performance across our portfolio by driving demand for our products. And within ADM, our productivity and innovation efforts are continuing to help us deliver on the evolving needs of our customers. Considering these factors, we expect 2022 results to exceed 2021's.”
On March 31st 2022, ADM posted assets of $430,663 million, against long-term debt of $9,295 million. The Company had an intraday market capitalization of $51,850 million on April 28th. ADM trades with a forward P/E of 17.4 and has ranged over a 52-week period from $56.91 to $98.88 with a 50-day moving average of $86.90. Twelve-month trailing operating margin was 3.5 percent and profit margin 3.2 percent. Return on assets over the past twelve months was 3.5 percent and the return on equity 12.8 percent. At close of trading on April 26th pre-release, ADM priced at $90.05. At market close, post-release on January 27th ADM traded at at $93.01