PARIS, France (Reuters) — Louis Dreyfus Commodities B.V. reported a sharp fall in full-year net profit as an improved second-half performance failed to offset a first half hit by a severe U.S. drought.
The 2012 drought, which was the country’s worst in half a century, curbed global grain production the following year and sent prices soaring, cutting volumes and processing margins for traders such as Louis Dreyfus that do business all along the agricultural supply chain.
The company said a shift to ample grain supply pushed up its margins in the latter part of 2013.
Its adjusted net income from continuing operations fell to $640 million last year from a record $970 million in 2012, it said in an annual results statement.
Second-half profits were in line with the average of 2009-2011, excluding Brazilian subsidiary Biosev, the group said. For the first half, it had reported $258 million in net income from continuing operations.
The 163-year-old group, still controlled by the founding Louis-Dreyfus family, said full-year net sales rose to $63.6 billion from $57.1 billion in 2012, supported by a 10 percent increase in shipped volumes.
Capital expenditure increased to $689 million last year from $652 million in 2012.
The company made a series of investments along its supply chain in the past year, including the creation of a joint venture to develop a commodity port terminal in Ukraine.public in the next five years to get more access to capital.