ADM reports significant Q2 improvement in ethanol earnings
July 27, 2021
BY Erin Voegele
Archer Daniels Midland Co. released second quarter financial results on July 27, reporting that earnings for its Carbohydrates Solutions segment, which includes ethanol, were almost double those reported for the same period of last year.
ADM’s Carbohydrates Solutions business includes two segments. The Starches and Sweeteners segment includes ethanol from the company’s wet mills, while the Vantage Corn Processors includes the ethanol dry mills.
During an earnings call, Ray Young, chief financial officer at ADM, said the company’s Starches and Sweeteners segment, including ethanol production from the wet mills, delivered substantially higher year-over-year results, driven by approximately $90 million in positioning gains across the ethanol complex and more normalized results from corn oil. Ethanol margins improved when compared to the second quarter of last year, driven by a resurgence in driving miles in the U.S., Young added.
Advertisement
Advertisement
“Vantage Corn Processors results were much higher than the second quarter of 2020 supported by the resumption of our two dry mills, improved fuel ethanol margins, and favorable performance in USP-grade industrial alcohol from our Peoria complex,” Young continued.
Looking ahead, Young said tightening corn markets and the resulting effect on ethanol margins is expected to result in the Carbohydrates Solutions business segment reporting lower third quarter earnings when compared to the same period of last year. For the full year 2021, however, the segment is expected to report results that are substantially higher than last year.
Advertisement
Advertisement
ADM’s Carbohydrate Solutions segment reported $383 million in adjusted operating profit for the second quarter, up from $195 million during the same period of last year. Starches and Sweeteners reported $306 million in adjusted operating profit, up from $177 million, while Vantage Corn Processors reported $77 million in adjusted operating profit, up from $18 million.
Overall, ADM reported second quarter adjusted segment operating profit of $1.16 billion, up from $804 million during the same period of last year. Adjusted earnings per share reached $1.33, up from 85 cents per share during the second quarter of 2020.
Related Stories
The USDA on April 14 announced the cancellation of its Partnerships for Climate-Smart Commodities program. Select projects that meet certain requirements may continue under a new Advancing Markets for Producers initiative.
The Michigan Advanced Biofuels Coalition and Green Marine are partnering to accelerating adoption of sustainable biofuels to improve air quality and reduce GHG emissions in Michigan and across the Great Lakes and St. Lawrence Seaway.
The USDA reduced its outlook for 2024-’25 soybean oil use in biofuel production in its latest World Agricultural Supply and Demand Estimates report, released April 10. The outlook for soybean oil pricing was revised up.
The U.S. Energy Information Administration reduced its 2025 forecasts for renewable diesel and biodiesel in its latest Short-Term Energy Outlook, released April 10. The outlook for “other biofuel” production, which includes SAF, was raised.
FutureFuel Corp. on March 26 announced the restart of its 59 MMgy biodiesel plant in Batesville, Arkansas. The company’s annual report, released April 4, indicates biodiesel production was down 24% last year when compared to 2023.
Upcoming Events
