PARIS, France (Reuters) — Louis Dreyfus Company, one of the world’s largest crop merchants, said its first-half net profit and sales fell from a year earlier, when results were boosted by upheaval linked to the war in Ukraine.
The company reported a group net profit of US$568 million for the first half of 2023, compared to $662 million in the year-earlier period.
Net sales fell to $25.8 billion from $30.3 billion, reflecting a decline in prices as well as a 4.7 percent year-on-year decrease in volumes shipped, it said.
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Volatility in most of its markets eased compared with the previous year while prices fell except for robusta coffee, sugar, rice and citrus juices, Louis Dreyfus said in a financial report.
Volatility fuelled by Russia’s invasion of fellow grain exporter Ukraine had buoyed profits for crop merchants last year as they used global networks to manage supply disruptions and meet firm food demand.
ADM and Bunge reported a drop in second-quarter profits from record year-earlier levels, though they raised full-year earnings guidance, with a bumper Brazilian soybean harvest supporting processing margins.
Louis Dreyfus similarly cited big Brazilian soybean and corn crops, plus strong Chinese demand, as helping its grain and oilseed business drive first-half performance.
In Russia, Louis Dreyfus stopped exporting Russian grain on July 1 as planned and was continuing to study options to transfer its Russian business and grain assets to new owners, it said.
The group recorded, as of June 30, $32 million in assets and $5 million in liabilities as held for sale in Russia, it added.
In Ukraine, war disruption increased transport costs, the company said, reporting total assets and liabilities in the country as of June 30 at $152 million and $125 million, respectively.
Louis Dreyfus said its cotton business used multiple origins to maintain profits in the face of lower volumes linked to inflation pressures on consumers.
Its sugar business, excluding divested Imperial Sugar in the United States, improved as it successfully hedged against high volatility. Operating profit from rice remained strong despite weakening global demand.
Louis Dreyfus is majority-owned by Margarita Louis-Dreyfus via family trust Akira. The rest of the capital is controlled by Abu Dhabi holding firm ADQ, whose entry two years ago helped resolve tensions over debt and family minorities.
The company paid a $503 million dividend to shareholders during the first half of the year.
