Louis Dreyfus Sees Drop in Profits
Company notes trade war, swine fever have impacted bottom line
Louis Dreyfus warned on Monday that international trade tensions and a swine disease epidemic would continue to weigh on its activities in the rest of the year after pushing down first-half profit, reports Reuters.
The interim results reversed a rebound in group profits in the second half of last year and showed the pressures on trading firms as they try to emerge from a period of falling margins for sourcing and shipping crops such as cereals and oilseeds.
Privately held Louis Dreyfus Co. (LDC) reported a first-half net profit from continuing operations of $73 million, down from $91 million in the same period last year.
A U.S.-China tariff dispute has shaken up the soybean market while the spread of African swine fever further dampened demand for soy-based livestock feed by decimating pig herds in China and other Asian countries, LDC said.
“LDC achieved sound results for the first half of 2019, in a particularly challenging environment,” Ian McIntosh, LDC CEO, said in the company's report. “Global trade tensions, erratic weather conditions, the spread of African swine fever in Asia and a general context of oversupply made it difficult to analyze and act upon market fundamentals, underlining our achievement for the period. Our strategy of maintaining a diversified portfolio and broad geographic footprint was once again key to our performance, underpinned by solid risk management expertise."