ADM reports improved ethanol margins
January 4, 2010
BY Susanne Retka Schill
Posted Feb. 2, 2010
Archer Daniels Midland Co. announced earnings of $567 million and net sales of $15.9 billion for the quarter ended Dec. 31. While total net earnings were down slightly from the same period a year earlier, ADM reported a big increase in net earnings from its bioproducts division due to improved ethanol margins.
Bioproducts operating profit increased $230 million for the quarter and $171 million for the six months due to improved ethanol margins and higher sales volumes resulting from lower net corn costs, decreased manufacturing costs, and favorable gasoline blending economics. Bioproducts operating profit for the quarter also reflected increased sales volumes and margins for lysine, increased citric acid margins, and increased startup costs related to the Company's new industrial chemicals plants, ethanol dry mills, sugarcane processing plant, and new co-generation facilities.
Total ADM corn processing profits for the quarter were $290 million, with sweeteners and starches bringing in $171 million and bioproducts bringing in $119 million, compared to a $111 million loss in the second quarter of the 2008 fiscal year. ADM's oilseeds processing division was the most profitable in the second quarter with $352 million. Agricultural services brought in $150 million, and other operations totaling $178 million in net earnings. Net earnings from all sectors for the first six months of ADM's fiscal year totaled $1.06 billion, down 35 percent from the previous year mid-year totals, and net sales were $30.83 billion, down 18 percent.
Ethanol ranked high among the company's stated strategy to drive earnings growth through expanding the size and global reach of its core model. The highlighted points included:
In addition to the ethanol capacity improvements, ADM reported the completed expansion at a number of North American oilseed processing plants, continued construction at its bioplastics plant in Clinton, Iowa, and propylene/ethylene glycol plant in Decatur, Ill., the integration of a newly acquired processing plant in Olumouc, Czech Republic, into its network, and the startup of a cocoa processing plant in Pennsylvania.
ADM employs 28,000 at more than 230 processing plants, operating in more than 60 countries. With global headquarters in Decatur, Ill., ADM reported net sales for the fiscal year ending June 30, 2009, of $69 billion.
Archer Daniels Midland Co. announced earnings of $567 million and net sales of $15.9 billion for the quarter ended Dec. 31. While total net earnings were down slightly from the same period a year earlier, ADM reported a big increase in net earnings from its bioproducts division due to improved ethanol margins.
Bioproducts operating profit increased $230 million for the quarter and $171 million for the six months due to improved ethanol margins and higher sales volumes resulting from lower net corn costs, decreased manufacturing costs, and favorable gasoline blending economics. Bioproducts operating profit for the quarter also reflected increased sales volumes and margins for lysine, increased citric acid margins, and increased startup costs related to the Company's new industrial chemicals plants, ethanol dry mills, sugarcane processing plant, and new co-generation facilities.
Total ADM corn processing profits for the quarter were $290 million, with sweeteners and starches bringing in $171 million and bioproducts bringing in $119 million, compared to a $111 million loss in the second quarter of the 2008 fiscal year. ADM's oilseeds processing division was the most profitable in the second quarter with $352 million. Agricultural services brought in $150 million, and other operations totaling $178 million in net earnings. Net earnings from all sectors for the first six months of ADM's fiscal year totaled $1.06 billion, down 35 percent from the previous year mid-year totals, and net sales were $30.83 billion, down 18 percent.
Ethanol ranked high among the company's stated strategy to drive earnings growth through expanding the size and global reach of its core model. The highlighted points included:
-The addition of 300 MMgy of annual capacity with the start up of its ethanol dry mill in Columbus, Neb.
-Completion of cogeneration projects to provide cost-effective process steam and electricity to adjacent corn wet and dry mills at its Clinton, Iowa, and Columbus, Neb., ethanol facilities
-Completion of the Brazilian joint venture sugarcane ethanol plant
-Completion of an expansion of its corn wet milling plant at Decatur, Ill.
-Construction continuing on an ethanol dry mill in Cedar Rapids, Iowa.
In addition to the ethanol capacity improvements, ADM reported the completed expansion at a number of North American oilseed processing plants, continued construction at its bioplastics plant in Clinton, Iowa, and propylene/ethylene glycol plant in Decatur, Ill., the integration of a newly acquired processing plant in Olumouc, Czech Republic, into its network, and the startup of a cocoa processing plant in Pennsylvania.
ADM employs 28,000 at more than 230 processing plants, operating in more than 60 countries. With global headquarters in Decatur, Ill., ADM reported net sales for the fiscal year ending June 30, 2009, of $69 billion.
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