CHICAGO — Agile execution across a tightly integrated supply chain, boosted in large part by strong gains in the Ag Services and Oilseeds division, buoyed third-quarter earnings and revenues at ADM.
Net earnings at ADM totaled $526 million in the third quarter ended Sept. 30, equal to 93¢ per share on the common stock, up 134% from $225 million, or 40¢ per share, in the same period a year ago. Revenues in the quarter surged 34%, increasing to $20.34 billion from $15.13 billion.
“Our team’s great ability to leverage the favorable operating environment, and the consistent implementation of our strategic plan, have put ADM on track for a strong fourth quarter culminating in a second consecutive year of record earnings per share,” said Juan Luciano, chairman and chief executive officer of ADM. “And as we look ahead, we remain optimistic in sustainable earnings growth in the medium term as we continue to execute our strategy, including the dynamic positioning of our business portfolio.”
Segment operating profit in the Ag Services and Oilseeds division totaled $618 million in the third quarter, up 42% from $436 million in the same period a year ago. Revenues in the division rose 36% to $15.69 billion from $11.53 billion. Within the division, crushing operating profit jumped to $280 million from $66 million, while refined products and other profit increased 86% to $236 million from $127 million. Ag services experienced a 76% decline in operating profit to $36 million, while the Wilmar business fell 32%, to $66 million from $96 million.
“The Ag Services and Oilseeds team continued their outstanding year with another quarter of substantial profit growth,” Ray Guy Young, executive vice president and chief financial officer, said during an Oct. 26 conference call with analysts. “In Ag services, we’re proud of how the team executed in a challenging environment, including a swift return to operation after Hurricane Ida. Overall results were significantly lower versus the prior-year quarter driven by approximately $50 million in net timing effects that should reverse in coming quarters as well as $54 million in insurance settlement recorded in the prior-year period and lower export volumes caused by Hurricane Ida. Global trade continues its strong performance.
“The crushing team delivered substantially higher year-over-year results, executed well, delivering stronger margins in a dynamic environment that includes strong demand for vegetable oils to support our existing food customers as well as the increasing production of renewable diesel. Results were also driven by about $70 million in net positive timing effects in the quarter.
“Refined products and other results were significantly higher than the prior-year period, driven by positive timing effects of approximately $80 million that are expected to reverse in future quarters. Strong execution in EMEA and North American biodiesel and strong refining premiums due to demand for renewable diesel and food service recovery in North America also contributed to the results. Equity earnings from Wilmar were lower year-over-year.”
Segment operating profit in the Carbohydrate Solutions segment eased 13.5%, to $213 million from $246 million. Revenues in the division increased 39%, rising to $2.87 billion from $2.06 billion. Within the unit, operating profit for the starches and sweeteners business fell to $178 million from $257 million, while Vantage Corn Processors posted a profit of $35 million, which compared with a loss of $11 million in the third quarter of fiscal 2020.
“The starches and sweeteners subsegment, including ethanol production from our wet mills, showed their agility by managing through dynamic market conditions and optimizing mix between sweeteners and ethanol production through the quarter,” Mr. Young said. “Year-over-year results were significantly lower primarily due to higher input costs. Vantage Corn Processors results were much higher versus the third quarter of 2020, supported by the resumption of production at our two dry mills and improved fuel ethanol margins, particularly late in the quarter.”
Segment operating profit in the Nutrition segment totaled $176 million in the third quarter, up 20% from $147 million a year ago. Revenues in the division were $1.7 billion, up 17% from $1.45 billion in the same period a year ago. Within the unit, human nutrition operating profit rose 8.5% to $139 million, while animal nutrition increased 95%, climbing to $37 million from $19 million.
“As I look back at the third quarter and all of the last nine months, I continue to see a team and a company that are delivering on our goals and our purpose,” Mr. Luciano said during the Oct. 26 conference call. “We are closing out 2021 with great momentum. We’re on track for a strong fourth quarter and a second consecutive year of record earnings per share. And as we look ahead to 2022, we see another strong year for ADM.
“A robust global demand environment will continue to offer opportunities for us to leverage our indispensable global origination, processing and logistics capabilities. And Nutrition will continue on its strong growth trajectory, in line with our 15% per annum trend rate goals and on its way to $1 billion in operating profit in the coming years. Of course, there are things we continue to watch, including energy costs and inflation more widely. But thanks to our unique value chain and global footprint, our unmatched abilities to meet needs in the enduring trend areas of food security, health and well-being and sustainability and a truly unparalleled team of nearly 40,000 colleagues around the world, we remain very optimistic in a strong year to come.”