ADM: Bioproducts segment earnings down on weak ethanol margins

By Erin Voegele | November 06, 2018

Archer Daniels Midland Co. has released third quarter 2018 financial results, reporting significantly increased net earnings overall. Results for the company’s bioproducts segment, however, were down due to weak ethanol margins.

Within the bioproducts segment, ADM said positive results from effective ethanol risk management as well as beverage and industrial alcohols were offset by an extremely weak ethanol industry margin environment. During an investor call, Ray Young, executive vice president and chief financial officer at ADM, noted the company’s North American sweeteners and bioproducts results were also impacted by downtime issues at its complex in Decatur, Illinois. He said ADM is continuing to make improvements to the long-term reliability of the complex, and that downtime will continue at the Decatur complex for the rest of the year while important upgrades are made.

ADM’s bioproducts segment reported $43 million in operating profit for the third quarter, down from $49 million during the same period of last year. For the first nine months of the year, the segment reported $46 million in operating profit, down from $88 million during the same period of 2017.

Overall, ADM reported $881 million in segment operating profit for the third quarter, up from $485 million during the third quarter of last year. Net earnings reached $536 million, up from $192 million during the same period of last year. Earnings per share reached 94 cents, up from 34 cents during the third quarter of 2017.