REUTERS — Global grain trader Archer-Daniels-Midland reported a 74 percent rise in second-quarter profit July 26, benefiting from high demand for grain and tighter supplies following Russia’s invasion of Ukraine.
Shares jumped three percent in pre-market trading.
Grain supply-chain middlemen like ADM and its peers have seen increased demand for crops they ship around the world as the Ukraine war cut off shipments from the breadbasket region around the Black Sea.
The war exacerbated already thin supplies of grain and oilseeds after weather-reduced crops in South America and other key production areas.
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“We expect the combination of our strategic actions and continued good demand for our products to propel very strong earnings in the second half of 2022,” said chief executive officer Juan Luciano.
Adjusted operating profit in ADM’s core agricultural services and oilseeds unit rose to $1.12 billion from $570 million last year. The unit’s North American results fell from last year, though ADM said export volumes were strong. South American results were higher.
“Global trade had an outstanding quarter,” the company said.
ADM has predicted that global supplies of key crop staples will remain tight for at least two years amid shipping disruptions from the war.
The first shipments of Ukrainian grain could leave Black Sea ports shortly under a United Nations-brokered deal, raising expectations for supply increases.
Net quarterly earnings attributable to ADM were $1.24 billion, or $2.18 per share, in the three months ended June 30, compared with $712 million, or $1.26 per share, a year earlier.
The company said robust demand for alternative proteins helped drive a 19 percent rise in operating profit in its nutrition business.
