Macon Reporter

Archer Daniels Midland Company issued the following announcement on Oct. 26

ADM today reported financial results for the quarter ended September 30, 2021.

“Agile execution across our tightly integrated supply chain amid an environment of strong demand and robust crush margins, and continued impressive growth in Nutrition, drove our eighth consecutive quarter of year-over-year adjusted operating profit growth,” said Chairman and CEO Juan Luciano.

“Our team’s great ability to leverage the favorable operating environment, and the consistent implementation of our strategic plan, have put ADM on track for a strong fourth quarter culminating in a second consecutive year of record earnings per share. And as we look ahead, we remain optimistic in sustainable earnings growth in the medium term as we continue to execute our strategy, including the dynamic positioning of our business portfolio.”

ADM has made a series of strategic growth and portfolio announcements in recent months, including significantly enhancing its growing pet business with a 75% ownership stake in PetDine, and continuing to advance its evolution to higher-value sustainable solutions in Carbohydrate Solutions with the sale of the Peoria ethanol complex; an MoU with Gevo, Inc. for the production of sustainable aviation fuel; and an agreement with LG Chem to explore U.S.-based production of plant-based biosolutions.

Third Quarter 2021 Highlights

(Amounts in millions except per share amounts)	2021				2020
Earnings per share (as reported)	$	0.93			$	0.40
Adjusted earnings per share1	$	0.97			$	0.89
Segment operating profit	$	1,000			$	904
Adjusted segment operating profit (loss)1	$	1,002			$	849
Ag Services and Oilseeds	618				436
Carbohydrate Solutions	213				246
Nutrition	176				147
Other Business	(5		)		20

• Q3 2021 EPS as reported of $0.93 includes a $0.05 per share charge related to debt extinguishment, a $0.01 per share charge related to restructuring and settlement, a $0.01 per share gain related to the mark-to-market adjustment on the Wilmar exchangeable bond, and a $0.01 per share tax benefit related to certain discrete items. Adjusted EPS, which excludes these items, was $0.97.1

1 Non-GAAP financial measures; see pages 5, 10, 11 and 12 for explanations and reconciliations, including after-tax amounts.

Quarterly Results of Operations

Ag Services & Oilseeds delivered substantially higher results versus the third quarter of 2020.

• Ag Services executed well in a challenging environment, including a rapid return to operation after Hurricane Ida. Overall results were significantly lower versus the prior-year quarter, driven by approximately $50 million in net negative timing effects that should reverse in coming quarters; a $54 million insurance settlement recorded in the prior-year period; and lower export volumes caused by Hurricane Ida. Global Trade continued its strong performance.
• Crushing had substantially higher year-over-year results. The team executed well, delivering stronger margins in a dynamic environment that included strong demand for vegetable oil to support our existing food customers as well as increasing production of renewable diesel. Results were also driven by approximately $70 million in net positive timing effects in the quarter.
• Refined Products and Other results were significantly higher than the prior-year period, driven by positive timing effects of approximately $80 million that are expected to reverse in future quarters, along with strong execution in EMEA and NA biodiesel and strong refining premiums due to demand for renewable diesel and foodservice recovery in North America.
• Equity earnings from Wilmar were lower versus the third quarter of 2020.

Carbohydrate Solutions results were lower year over year.

• Starches and Sweeteners, including ethanol production from our wet mills, managed through dynamic market conditions, optimizing mix between sweeteners and ethanol production through the quarter. Year-over-year results were significantly lower primarily due to higher input costs.
• Vantage Corn Processors results were much higher versus the third quarter of 2020, supported by the resumption of production at our two dry mills and improved fuel ethanol margins, particularly late in the quarter.

Nutrition delivered another strong performance, with revenue growth of 17% helping drive 20% higher year-over-year operating profits.

• Human Nutrition delivered 9% higher profits. Higher volume and improved product mix, with particular strength in beverage, drove strong Flavors results in EMEA and North America, partially offset by lower results in APAC. Specialty Ingredients continued to benefit from strong demand for alternative proteins, offset by some higher costs. Health & Wellness results were higher on robust sales growth in bioactives and fiber.
• Animal Nutrition profits were nearly double the year-ago period, driven primarily by strength in amino acids as well as feed additives and ingredients, partially offset by higher costs in LATAM and slower demand recovery in APAC.

Other Business results were substantially lower than the prior-year period, driven primarily by captive insurance underwriting losses, most of which were offset by corresponding recoveries in other business segments.

Other Items of Note

As additional information to help clarify underlying business performance, the table on page 10 includes reported earnings and EPS as well as adjusted earnings and EPS.

In Corporate results, interest expense decreased year over year on lower interest rates and the favorable liability management actions taken in the prior year. Unallocated corporate costs were higher year over year due primarily to higher IT operating and project-related costs and transfers of costs from business segments into the centralized centers of excellence in supply chain and operations. Corporate results also included debt extinguishment charges of $36 million ($0.05 per share) and a gain related to the mark-to-market adjustment on the Wilmar exchangeable bond of $7 million ($0.01 per share).

The effective tax rate for the quarter was 18 percent compared to a benefit of 13 percent in the prior year. The low rate in the prior-year quarter included the effects of the significant early debt retirement, the sale of a portion of the Company’s shares in Wilmar, and changes in the forecasted geographic mix of pretax earnings on the 2020 annual effective tax rate in that period.

Note: Additional Facts and Explanations

Additional facts and explanations about results and industry environment can be found at the end of the ADM Q3 Earnings Presentation at www.adm.com/webcast.

Conference Call Information

ADM will host a webcast on October 26, 2021, at 8 a.m. Central Time to discuss financial results and provide a company update. To listen to the webcast, go to www.adm.com/webcast. A replay of the webcast will also be available for an extended period of time at www.adm.com/webcast.

Forward-Looking Statements

Some of our comments and materials in this presentation constitute forward-looking statements that reflect management’s current views and estimates of future economic circumstances, industry conditions, Company performance and financial results. These statements and materials are based on many assumptions and factors that are subject to risk and uncertainties. ADM has provided additional information in its reports on file with the SEC concerning assumptions and factors that could cause actual results to differ materially from those in this presentation, and you should carefully review the assumptions and factors in our SEC reports. To the extent permitted under applicable law, ADM assumes no obligation to update any forward-looking statements as a result of new information or future events.

Original source can be found here.