US: Costs hit ADM Q3
- ADM profits sink 31%
- Sales gain 5.4%
- Margins hit by ethanol, oilseed
Archer Daniels Midland's (ADM) third-quarter earnings dropped 31% on the back of lower ethanol prices and weak European oilseed results, the company said today (1 May).
For the three months to the end of March, ADM's net profit totalled US$399m, down from $578m in the comparable period of last year.
While revenue increased 5.4% to $21.16bn, the company said that gross margin shrank to 4.8% from 5.8%.
ADM said that profits from its ethanol business were hit by lower market prices due to over supply and stockpiling. Bioproduct profits, which include ethanol results, fell 69% in the period.
ADM's oilseed processing segment saw operating profit drop to $395m, from $512m, despite a 14% increase in sales due to poor margins in Europe.
However, the group emphasised that trading at its grain unit has "stabilised", with profits rising $8m from last year to $179m.
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