In an October 25th release, Archer-Daniels-Midland Corp. (ADM) posted financial results for the 3rd quarter of fiscal 2022. This Company can be regarded as a bellwether for ‘Mega-Ag’ and the commodities trading and processing 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 influenced by inflation, conflict and disparity in the quality of life between industrialized and developing nations.
For the 3rd Quarter of FY 2023 ending September 30th, net income was $821 million on total revenue of $21,695 million. Comparable figures for the 3rd quarter of fiscal 2022 ending September 30th 2022 were net income of $1,031 million on total revenue of $24,683 million. Diluted EPS fell from $1.83 for the 3rd quarter of fiscal 2022 to $1.52 for the most recent quarter.
For the 3rd Quarter the Animal Nutrition sub-segment generated $20 million in operating profit (compared to $31 million in Q3 2022) out of a combined total of $1,421 million for all segments. Segment operating profits were:-
- Ag Services and oilseeds $848 million
- Carbohydrate solutions $460 million
- Nutrition (human and animal) $118 million
- Other businesses $ 46 million
In commenting on results, Chairman and CEO Juan Luciano stated “ADM again delivered a strong quarter in increasingly dynamic market conditions as we continued to adjust our business model to meet the evolving needs of our customers. Through targeted investments in innovation and a focus on efficiencies that align to our customers’ goals, we are strengthening critical partnerships and expanding our new profit opportunities to deliver additional shareholder value”.
His commentary on operating segments included, “Ag Services & Oilseeds delivered another solid quarter, leveraging the strength of our Brazilian export capabilities, extending regenerative agriculture partnerships, and commissioning our Spiritwood production facility to serve growing demand for renewable green diesel. Carbohydrate Solutions drove strong results through excellent execution in favorable ethanol, starches and sweeteners margin environments, while extending customer wins in BioSolutions and formally advancing the Broadwing Energy project for lower carbon intensity power generation in Decatur. Within Nutrition, the outstanding growth of Flavors continues to outpace the market, and Health & Wellness is developing the next generation of evidence-based solutions, while we address pockets of softness in other areas of the portfolio. With strong performance to date in 2023 and a constructive expectation for the remainder of the year, we are again raising our full-year earnings outlook.”
On September 30th 2022, ADM posted assets of $37,105 million of which $6,392 million comprised goodwill and intangibles, against long-term debt of $8,225 million. The Company had an intraday market capitalization of $37,240 million on October 25th. ADM trades with a forward P/E of 10.4 and has ranged over a 52-week period from $69.32 to $98.32 with a 50-day moving average of $77.45. Twelve-month trailing operating margin was 4.6 percent and profit margin 4.1 percent. Return on assets over the past twelve months was 45.4 percent and the return on equity 15.8 percent.