ADM: reports third quarter results — profit climbs 42%

Decatur / IL. (adm) Boosted by a dramatic increase in profits in its ag services division, Archer Daniels Midland Company (ADM) posted overall third-quarter net income of 517 million USD, up 42 percent from 363 million USD in the same period a year ago – highlights:

• Net sales and other operating income increased 64 percent to 18,7 billion USD for the quarter ended March 31, 2008.
  • Selling prices increased due principally to sharp rises in commodity prices.
• Third quarter segment operating profit increased 54 percent to 913 million USD from 593 million USD last year.
  • Oilseeds Processing operating profit increased as global demand for protein and oil improved.
  • Corn Processing operating profit decreased due principally to higher net corn costs.
  • Agricultural Services operating profit increased as highly volatile market conditions provided exceptional merchandising opportunities.
  • Other segment operating profit increased due to improved margins and increased financial services income.

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Net sales and other operating income increased 64 percent to 18,7 billion USD for the quarter and 51 percent or 16,2 billion USD for the nine months. Increased selling prices resulting primarily from sharp rises in commodity prices accounted for approximately 85 percent of the increase while higher sales volumes, principally vegetable oil and meal, feed grains and wheat, accounted for the remaining 15 percent increase.

Net earnings increased 154 million USD for the quarter and 223 million USD for the nine months due principally to increased segment operating profit of 320 million USD for the quarter and 657 million USD for the nine months partially offset by increased corporate expenses for LIFO inventory valuations and minority interest elimination for both the quarter and nine months. Income taxes increased 45 million USD for the quarter and 103 million USD for the nine months due principally to increased pretax earnings for both the quarter and nine months partially offset by a lower effective tax rate for the quarter due to changes in the geographic mix of earnings.

Oilseeds Processing operating profit increased 52 million USD for the quarter and 119 million USD for the nine months due principally to continuing strong global demand for protein meal and vegetable oil. Crushing and origination results increased 78 million USD for the quarter and 117 million USD for the nine months due to improved processing margins in North and South America and increased worldwide crushing volumes. Refining, packaging, biodiesel and other results decreased 16 million USD for the quarter and nine million USD for the nine months due principally to weaker biodiesel margins in Europe. Last year´s quarter and nine month results for refining, packaging, biodiesel and other include a 14 million USD gain from business disposals.

Corn Processing operating profit decreased 79 million USD for the quarter and 177 million USD for the nine months due primarily to increased net corn and manufacturing costs, principally energy. Partially offsetting these higher costs, sweeteners and starches selling prices increased for the quarter and nine months and sales quantities of ethanol increased for the quarter and nine months. Increases in sales prices and volumes for the quarter and nine months of lysine also favorably impacted bioproducts earnings.

Agricultural Services results increased 320 million USD for the quarter and 618 million USD for the nine months to record levels due principally to continuing enhanced merchandising and handling margins caused by the highly volatile global grain markets and favorable risk management results. Transportation results decreased 16 million USD for the nine months due to higher operating costs, principally fuel.

Other operating profit increased 27 million USD for the quarter and 97 million USD for the nine months. Wheat, cocoa and malt operations improved eight million USD for the quarter and 30 million USD for the nine months due principally to favorable risk management results in wheat and malt partially offset by decreased cocoa processing margins. Last year´s quarter and nine month wheat, cocoa and malt results include a 39 million USD gain from business disposals. Financial earnings improved 19 million USD for the quarter and 67 million USD for the nine months principally due to higher brokerage services income, decreased insurance loss provisions, marketable securities gains and improved earnings from managed fund investments.

«ADM´s third-quarter performance demonstrates the ability of our balanced operations, global network and solid balance sheet to deliver strong results amid fluid markets», said Patricia Woertz, Chairman and CEO. «Volatility in commodity markets presented unprecedented opportunities. Once again, our team leveraged our financial flexibility and global asset base to capture those opportunities to deliver shareholder value».

_{ADM is one of the largest agricultural processors in the world. Founded in 1902 and incorporated in 1923, ADM is headquartered in Decatur (Illinois) and operates processing and manufacturing facilities across the United States and worldwide (source).}