To address demand for “green diesel,” ADM extends into the vegetable oil market.
Chicago – ADM’s second-quarter results were positively impacted by the transportation industry’s growing usage of vegetable oils for biofuel, and the Chicago-based business plans to continue investing in that space.
The quarter ending June 30th saw net earnings attributable to ADM of $712 million, or $1.26 diluted earnings per share on the common stock. This represents a 52% increase over the second quarter of the previous year’s earnings of $469 million, or 84¢ per share. From $16.28 billion to $22.93 billion, net revenue increased 41%.
In Spiritwood, North Dakota, ADM intends to construct a $350 million soy crushing and refining facility.
“We anticipate that the US green diesel market will maintain its higher growth rate, adding up to 5 billion gallons by 2025 and growing by approximately 1 billion gallons annually,” stated President and CEO Juan R. Luciano during a July 27 earnings call. The growing demand for renewable green diesel will require a significant amount of feedstock, which is why we are investing in expanding our participation in North Dakota and Quincy through our expanded oil refining capacity. To that end, we are using about 7.5 pounds of soybean oil to produce one gallon of renewable green diesel, Ill.
Another potential growth area is sustainable aviation fuel, or SAF.
“To move towards a low-carbon SAF product, we are exploring the possibility of leveraging our Decatur, Ill., carbon sequestration site—which Juan mentioned—with our corn processing output as a feedstock for SAF,” stated Ray Guy Young, executive vice president and chief financial officer.
The adjusted operating profit at ADM’s Ag Services & Oilseeds division was $570 million, which was 38% more than the $413 million recorded in the same quarter the previous year. Net revenue increased by 43% from $12.74 billion to $18.27 billion. The maize sales to China drove the North American origination business, resulting in increased export quantities. Comparing the performance of global commerce to the robust second quarter of the prior year revealed a decline.
smashing outcomes were higher year over year due to greater execution margins in EU softseeds and North American soy due to robust vegetable oil demand.
“From a North American perspective, the margin is still very strong in the $45–$50 range, and we are very optimistic about the prospects for crush for the remainder of this year and into next year,” Mr. Luciano stated. “If I go by geography, as I always do.”
at the second quarter of the previous year, adjusted operating profit at ADM’s Carbohydrate Solutions division than doubled to $383 million from $195 million. From $2.01 billion to $2.82 billion in net revenue, there was a 40% rise. Due to positioning improvements across the ethanol complex worth around $90 million, the starches and sweeteners business of Carbohydrate Solutions produced better year-over-year performance more consistent outcomes from maize oil. Volumes of sweeteners increased as the foodservice channel’s demand started to increase again.
Results for Vantage Corn Processors were better than they were in the second quarter of the previous year because fuel ethanol margins increased and two dry mills started up again.
Adjusted operating profit in the nutrition sector increased by 27% to $201 million from $158 million. From $1.44 billion to $1.73 billion, revenue grew by 21%.
Revenues increased by 13% in the human nutrition category, but operating profit increased by 24%. Strong volumes and an enhanced product mix, particularly in beverages, were delivered by the flavours division. Specialty ingredients showed significant increase, particularly in proteins, but the results were less favourable because of some one-time expenses, primarily in texturants. The day prior to releasing the results of the second quarter, ADM came to an understanding to purchase Sojaprotein, a European supplier of components made from non-GMO soy.
Mr. Luciano declared, “Sojaprotein is a perfect fit for our growth strategy.” It is a calculated enhancement to our capacity for producing protein worldwide. With 2020 revenues expected to exceed $100 million, the company is expanding successfully and boasts a broad customer base spanning 65 countries, specialising in the meat substitute, confectionary, protein bar, pharmaceutical, pet food and animal feed industries.
Operating profit in Other decreased to $6 million from $38 million in the second quarter of the prior year. The net revenue climbed from $89 million to $102 million, a 15% increase.
ADM companywide reported net earnings of $1.4 billion, or $2.48 diluted earnings per share on the common stock, over the first half of the fiscal year increasing by 63% over $860 million, or $1.53 per share, at this time last year. To $41.82 billion from $31.25 billion, net revenue increased 34%.