ADM, BIOX Corp. report quarterly earnings

By Bryan Sims | July 13, 2010
Posted Aug. 9, 2010

Decatur, Ill.-based agri-business giant Archer Daniels Midland Co. posted solid quarterly earnings on Aug. 3, as improved demand and stronger margins in oilseeds and corn processing boosted results. Overall, ADM reported a net earnings increase of $388 million to $446 million for its quarter ending June 30.

ADM's Oilseeds Processing segment increased $132 million while crushing and origination results increased $77 million to $218 million. The company noted that refining, packaging, biodiesel and other results increased $58 million to $79 million for the quarter. ADM credited the expansion of its 54MMgy plant in Rondonopolis, Brazil successful in capturing favorable margins and volumes amid strong demand.

ADM's Agricultural Services segment increased $195 million for the quarter and decreased $326 million for the 12 months. In the quarter, ADM saw a good global supply of grains and oilseeds and modestly improving demand, particularly from Asia, where results of $62 million for the quarter reflected the company's share of Wilmar International Ltd.

"The ADM team finished strong, capping a very good year with very good fourth-quarter performance," said Patricia Woertz, ADM's chairman of the board and chief executive officer. "As we begin our new fiscal year, our large projects are nearly finished, and we commit to use our strong balance sheet and cash flow to deliver shareholder value."

As for BIOX Corp., the Canadian biodiesel producer posted methyl ester production for its third quarter at 14.4 MMly (3.8 MMgy) compared to 12.1 MMly (3.2 MMgy) the same quarter last year, which correlated with depressed operating profits at a loss of $5.6 million and $7.2 million for the three-month and nine-month periods respectively ending June 30, compared with $1.2 million and $4.8 million for the corresponding periods in 2009. Overall, the company reported a net loss of $6 million in its third quarter this year compared to $1.5 million last year.

Biodiesel sales for BIOX was at $6.6 million and $33 million respectively for its three-month and nine-month periods ending June 30 compared to $10.8 million and $32.8 million for the corresponding periods in 2009. According to its earnings report, BIOX said that the change in sales was primarily a result of the impact of the $1-per-gallon biodiesel tax credit, which expired December 31, 2009. During the quarter, BIOX said it "sold biodiesel that included $1.6 million of contingent revenue that cannot be recognized unless/until the U.S. biodiesel tax incentive is reinstated retroactively".

As an obligated party under the registration of renewable identification numbers (RINs) for biodiesel in accordance with the RFS2 requirement implemented in July for biomass-based diesel, BIOX said that it intends "to be opportunistic in its sales approach in the near term and sell its biodiesel when prices warrant, and will otherwise store biodiesel for sale at a future date anticipating higher values as a result of the implementation of RFS2 and/or the reinstatement of the biodiesel tax incentive".

Additionally, BIOX submitted two applications to Natural Resources Canada to build a 67MMly (17.7 MMgy) facility in Hamilton, Ontario and another in Montreal in the ecoENERGY for Biofuels program. The company said that the Hamilton project has "progressed to a full merit-based assessment based on its advanced state of readiness". BIOX currently operates a 60MMly (15.8 MMgy) biodiesel plant in Hamilton.

"The longer-term market dynamics for renewable fuels is becoming increasingly clear with the implementation of RFS2 in the U.S.," said BIOX President and CEO Tim Haig. "Over the coming months we expect to see the fundamentals for biodiesel demand gain traction now that traditional refiners and importers are obligated to actively participate in the biodiesel market in order to meet the requirement to blend 1.145 billion U.S. gallons in 2010 and 2011."
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