ADM operating profit declines 38% in Q1 2025

USA – ADM’s operating profit dropped by 38% in the first quarter ending March 31, largely due to a 52% decline in its Ag Services and Oilseeds division.

The company’s net earnings were US$295M, or 61 cents per share, a significant decrease from US$729M, or US$1.42 per share, in the same quarter last year.

Revenues also fell by 8%, dropping to US$20.18B from US$21.85B, while total segment operating profit decreased to US$747M from US$1.2B.

Despite this downturn, the Chicago-based company maintained its full-year adjusted earnings per share forecast at between US$4 and US$4.75, although it anticipates results will be closer to the lower end of that range.

ADM plans to have its plant in Decatur, Illinois, fully operational by the end of the second quarter, following a dust explosion on September 10, 2023, which negatively impacted soybean protein production.

In the Ag Services and Oilseeds segment, operating profit plummeted 52% to US$412 million from US$864M.

The crushing operating profit saw an 85% decline to US$47M from US$313M, attributed to lower margins from increased industry capacity, competitive meal exports from Argentina, rising manufacturing costs, and reduced vegetable oil demand due to uncertainties in biofuel and trade policies.

The segment experienced about US$4M in net positive mark-to-market timing impacts, compared to approximately US$40M in the same quarter last year.

In ag services, operating profit decreased by 31% to US$159M from US$232M, driven by reduced volumes and margins primarily due to tariff and trade policy uncertainties.

Negative mark-to-market timing impacts and certain export duties also contributed to this decline, although higher destination marketing volumes and related margins provided some offset.

In the refined products and other category, operating profit fell by 21% to US$134M from US$170M, with equity earnings from ADM’s investment in Wilmar dropping 52% to US$72M from US$149M.

In the Carbohydrate Solutions segment, operating profit decreased by 3% to US$240M from US$248M.

Within this segment, the operating profit for starches and sweeteners fell by 21% to US$207M from US$261M due to lower North American starch margins, decreased volumes and margins in EMEA, and higher manufacturing costs.

However, Vantage Corn Processors reported an operating profit of US$33M, a turnaround from an operating loss of US$13M in the same quarter last year, thanks to increased ethanol volumes and improved margins.

Conversely, ADM’s Nutrition segment saw a 13% increase in operating profit to US$95M from US$84M, driven by growth in flavors and animal nutrition (excluding pet products), along with timing-related incentive compensation adjustments.

Within the segment, human nutrition operating profit dropped to US$75M from US$76M, while in flavours, operating profit increased, primarily driven by higher volumes and margins in North America and EMEA.

In specialty ingredients, the decline in operating profit was attributed to lower margins. In health and wellness, operating profit declined due to certain negative valuation adjustments.

However, In animal nutrition, operating profit more than doubled to US$20M from US$8M as a result of improved market conditions.

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