Multinational agricultural commodity trader and processor ADM has reported lower full year profitability from revenues marginally up on the previous year. However, the last quarter showed improvement in both sales and profitability.
The business made net earnings of $1.38 billion on revenues of $64.66bn in the year ended December 31st 2019, compared to $1.82bn and $64.34bn in the previous twelve months. But the fourth quarter generated net earnings of $504 million on sales of $16.33bn, up from the $315m and $15.95bn in Q4 of the prior year.
2019 saw the integration of ADM’s separate UK farm procurement, agricultural merchanting and feed materials trading activities into the single ADM Agriculture business. While the domestic results are consolidated into the global figures, worldwide early retirement and workforce restructuring charges cost the company $9m over the year.
By sector, ADM’s Nutrition segment saw substantially higher results, particularly for animal nutrition. Neovia, the French feed business bought for $1.4bn in February 2019, made a positive contribution, although this was partially offset by losses in lysine due to a weak global prices for the amino acid.
The Ag Services & Oilseeds division results were up too, with operating profit lifted by $270m from the approval of biodiesel tax credit legislation in the US for 2018 and 2019. Even without this, there was strong global demand for both biodiesel and food oils.
Oilseed Crushing margins were “solid” although below the near-record levels in 2018 after the short Argentine soybean crop that year.
ADM’s Ag Services segment returned slightly lower results. The delayed North American harvest and lower export volumes reduced margins, which were partially offset by South America’s results, lifted by good export demand.
ADM Investor Services returned a higher performance year-on-year.
ADM’s stronger global wheat milling results contributed to the Starches and Sweeteners segment performance.
“Our team delivered a solid fourth quarter, consistent with our expectations three months ago,” noted ADM chairman and chief executive Juan Luciano. “Looking ahead, we’re excited about the opportunities we see in 2020 and beyond. We expect market conditions to improve as the year progresses, particularly as impacts from the US-China Phase 1 trade deal take hold.”