Political disruption affecting global commodity trading plus the severe spring weather in the US are factors which reduced Archer Daniels Midland (ADM)’s profitability and revenues in the second quarter and first half of its financial year.

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The company made an adjusted operating profit of $682 million on revenues of $16.3 billion in the three months ended June 30th 2019, compared to $924m and $17.10bn in Q2 2018. At the half year stage, adjusted operating profit was $1.29bn on sales of $31.6bn ($1.64bn and $32.59bn).

Earnings were down in three of the multinational’s four divisions, with only Nutrition reporting an increase. But it is confident that the situation will improve over the rest of the year, with growth in 2020.

The Nutrition division made an operating profit of $117m in the latest quarter, up from $114m in Q2 2018. Within the segment, animal nutrition results were higher year-on-year, following a contribution from the French feed manufacturer Neovia, the acquisition of which completed in February this year. ADM’s consumer Health & Wellness businesses continued to grow.

The Origination division saw a significant fall in operating profit to $71m from $191m a year earlier, although the latter figure was swelled by the drought in Argentina and increased purchases of US crops by China in anticipation of tariffs being imposed.

The wet weather in the US which delayed crop planting also caused high water conditions on river transport networks during the period, constraining the delivery of US crops, particularly corn, to export terminals. This is estimated to have cost the company’s merchandising and handling operations around $40m.

Operating profit at the Oilseeds division fell to $291m, from $341m in Q2 2018, although that prior quarter handled record volumes at “extremely high” margins. While oilseed crushing and origination results were “solid” with strong demand in the North America and Europe, Middle East and Africa regions, South America suffered from higher soybean prices and lower demand from China over the three months. North America’s crush volumes were affected by high water levels at ADM’s Illinois crushing mill, which reduced profits by $10 million. Biodiesel income was also down.

The severe weather reduced the Carbohydrate Solutions division results by $15 million. It posted $192m from Q2 2019, down from the prior year Q2’s $247m. The wet Midwest weather impeded US starch and sweetener manufacturing in the three months, while Europe’s activities were affected by low sugar prices. Negative ethanol industry margins weighed on biofuel output, with lower US exports and higher stocks.

“We took aggressive action in the face of challenging external conditions, and we are confident that our work over the first half of the year will help deliver a stronger back half,” comments ADM chairman and chief executive Juan Luciano.

“Although the timing is uncertain, we remain confident in the resumption of significant food and agricultural trade flows between the US and China, which will help bolster margins in the US grain export and ethanol industries. We are also seeing early signs of how African Swine Fever might impact global animal protein markets and eventually support incremental soybean meal demand in key meat-producing regions outside of China. And, of course, fast-growing consumer trends such as plant-based proteins are creating long-term growth opportunities for our comprehensive portfolio of food and beverage solutions.”