Archer Daniels Midland (ADM), the US-based agribusiness giant, posted a 98% drop in third-quarter profit today (5 May) as a result of currency losses from the company’s Mexican corn-flour business.
Net income for the quarter ended 31 March dropped to US$8m from $517m in the same period of last year.
The figure included a $132m non-cash after-tax charge related to related to currency derivatives at Gruma, and a $97m income tax charge related to its investment in Wilmar International Limited.
“While the quarterly results were adversely impacted by two significant, unusual items, our underlying performance was solid in view of the global economic conditions and the associated challenges faced by our industry,” said chairman of the board and CEO Patricia Woertz. “Our financial condition is strong, and we remain focused on managing risks and costs as we execute our long-term growth strategy.”
Net sales and other operating income decreased 21 % to $14.8bn for the quarter and segment operating profit, including the negative impact of the Gruma derivative losses, decreased 72 % to $254m from last year.
The company’s oilseeds processing operating profit decreased, primarily due to weaker demand in North America, which was partially offset by improved results in Asia.
Corn-processing operating profit declined due principally to decreased bioproducts results driven primarily by continued challenges in the ethanol industry, the company said.
ADM had a $97m loss from refining corn into ethanol and other products, compared with profit of $70m a year earlier, due to higher corn costs, lower selling prices and inventory writedowns.