In a November 18th release, Archer-Daniels-Midland Corp. (ADM) posted financial results for Q3 FY 2022. The 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. They all operate in a competitive world environment influenced by inflation, conflict and disparity in the quality of life between industrialized and developing nations.
For Q3 FY 2024 ending September 30th, net income was $18 million on total revenue of $19,937 million representing a profit margin of less than 0.1 percent Comparable figures for Q3 of 2013 ending September 30th 2023 were net income of $821 million on total revenue of $21,695 million. Diluted EPS fell from $1.52 for Q3 2023 to $0.04 for the most recent quarter.
For Q3 2024 the Animal Nutrition sub-segment generated $19 million in operating profit (compared to $12 million in Q3 2023) out of a combined total of $1,037 million for all segments. Segment operating profits were:-
- Ag Services and oilseeds $480 million
- Carbohydrate solutions $452 million
- Nutrition (human and animal) $105 million
ADM has been burdened with questions relating to internal accounting covering an extended period that apparently has now been resolved with restatement of accounts but without deviation from consolidated earnings. In commenting on results, Chairman and CEO Juan Luciano stated “Accuracy and transparency are important to the Company and we are pleased to have now completed the restatement and be current with our financial filing. We continue to focus on implementing enhancements to internal controls to ensure integrity and accuracy of reporting,”
He concluded “Looking ahead, while we foresee softer market conditions into next year, we are taking actions to improve performance and drive value creation. We are redoubling our focus on productivity and operational excellence, while maintaining our disciplined approach to capital allocation.”
On September 30th 2024, ADM posted assets of $35,654 million of which $6,999 million comprised goodwill and intangibles, against long-term debt of $8,303 million. The Company had an intraday market capitalization of $25,610 million on November 20th. ADM trades with a forward P/E of 10.8 and has ranged over a 52-week period from $48.92 to $77.35 with a 50-day moving average of $56.87. Twelve-month trailing operating margin was 2.2 percent and profit margin 2.9 percent. Return on assets over the past twelve months was 3.4 percent and the return on equity 10.8 percent.