Archer Daniels Midland (ADM) sales fell by five percent in the first half of fiscal 2010, although its corn sweeteners and starches division saw profits rise, due to lower net corn and manufacturing costs.
ADM and others in the agricultural commodities sector have been particularly susceptible to the effects of economic recession over the past year, which has hit demand for grain and fuel. But the company’s results for the first half of 2010 – as well as its expansion plans for ethanol production – are suggestive of a healthier financial year. Earnings were 88 cents per share, easily beating analysts’ predictions of 72 cents, according to Thomson Reuters.
The agricultural commodities giant reported a two percent decline in profits during the second quarter to December 31, but this compared favorably to the its steep 83 percent profit slide back in Q4. Sales for the second quarter fell to $15.9bn, from $16.6bn for the same period of the previous year, a decline that the company attributed to lower agricultural commodity prices, and net earnings slipped to $567m.
Chairman of the board and CEO Patricia Woertz said: “I’m very pleased with the performance of our people and with our results this quarter. While our earnings, in total, were comparable to last year’s strong second quarter, the market conditions and the mix of earnings were markedly different. This, once again, demonstrates the ability of the ADM team to utilize the geographic scope and diversity of our asset base to create value for our stockholders.”
The company has undertaken a range of strategic investments during the first half of 2010, such as extension of its global cocoa processing facilities. ADM officially opened a cocoa processing plant in Ghana in October, intended to boost its ability to provide cocoa products from a single source, and the company also started production at its Hazleton, Pennsylvania cocoa plant.
Other investments included completing expansion of a number of its North American oilseeds processing plants and the acquisition of the oilseed processing assets of ViaChem Group in the Czech Republic.