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October 29, 2020 | ADM

ADM Q3 Adjusted Earnings Beat Estimates

Company's bottom line totaled $225 million, or $0.40 per share

ADM has reports financial results for the quarter ended September 30, 2020.

“We delivered an outstanding quarter, and I am proud of our team’s continued great performance,” says Chairman and CEO Juan Luciano.

The company's bottom line totaled $225 million, or $0.40 per share. This compares with $407 million, or $0.72 per share, in last year's third quarter.

Excluding items, ADM reported adjusted earnings of $499 million or $0.89 per share for the period.

“Across the enterprise, ADM colleagues are doing what it takes to help our customers and our company succeed and grow," Luciano continues. "Our strategic initiatives, combined with exceptional execution, are driving strong results across all of our businesses. Readiness is enhancing our performance, accelerating our work in areas ranging from operations to sales. Our strong cash generation is allowing us to retire higher-cost debt while retaining balance sheet flexibility.

"And Nutrition continues its impressive upward trajectory, delivering a fifth consecutive quarter of 20-plus percent year-over-year operating profit growth.

“From our Strive 35 sustainability goals, to our partnership with Spiber to produce plant-based polymers, to the announcement of a significant expansion in probiotics with our new state-of-the art facility in Valencia, we’re advancing our work to enrich the quality of life around the globe. We’re excited about our future as we look ahead to another strong quarter, with positive momentum continuing through 2021.”

Results of Operations

Ag Services & Oilseeds results were higher than the third quarter of 2019. Both Ag Services and Crushing saw expanding margins during the quarter, resulting in approximately $155 million in total negative timing effects, which are expected to reverse in the coming quarters.

  • Ag Services executed extremely well to capitalize on strong North American industry export margins and volumes. Results were lower in South America, as the pace of Brazilian farmer selling slowed as expected following the aggressive selling in the first half of the year. Global Trade’s continued focus on serving customers contributed significantly to results, as did a $54 million settlement related to 2019 U.S. high water insurance claims. Negative timing impacts of almost $80 million led to lower overall results versus the prior year.
  • In Crushing, strong execution in an environment of tighter soybean supplies and solid global demand for meal and oil supported improved execution margins in North and South America, partially offset by lower year-over-year margins in EMEAI. Negative timing impacts of approximately $75 million versus a gain of approximately $50 million recognized in the prior-year quarter led to lower year-over-year results.
  • Refined Products and Other delivered significantly higher year-over-year results, driven by improved biodiesel margins around the globe. Packaged oils in South America also contributed.
  • Equity earnings from Wilmar were substantially higher versus the prior-year period.

Nutrition delivered its fifth consecutive quarter of 20-plus percent year-over-year profit growth.

  • Human Nutrition results were substantially higher versus the prior-year quarter, with improved results across the business portfolio. Flavors delivered another exceptional quarter, driven by increased revenue globally and improved mix and margins. Plant-based proteins helped drive a solid performance in Specialty Ingredients. Sales growth in probiotics, along with income from the Spiber fermentation agreement, contributed to strong results in Health & Wellness.
  • Animal Nutrition was higher year over year. Continued delivery of Neovia synergies, strength in livestock feed and year-over-year improvement in amino acids were partially offset by softer aquaculture feed demand as well as negative foreign currency impacts.

For the full results, click here.

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