ADM’s ethanol dry mill review progresses

Archer Daniels Midland (ADM), a US-based global food processing and commodities firm, has reported an increase in its third quarter profit and said that its ethanol dry mill review is progressing.

Net income was $341.6 million (€312m), or 58 cents per share, in the quarter ending 30 September, compared with $252 million, or 41 cents per share, in the same quarter a year ago. This was helped by higher US exports of corn and soybeans

Revenue fell 4% to $15.83 billion, missing most projections.

Earlier this year, ADM announced that two of its dry ethanol mills, based in Nebraska and Iowa, will be reviewed for "strategic options" — an analysis that could lead to a sale. ADM is also reviewing an older mill based in Illinois.

Dry mills are factories that grind corn kernels and send the starch to a refinery for distillation into ethanol. ADM's "wet mills", which can make a range of products including ethanol and high-fructose corn syrup, are not part of the review.

‘Strategic plan’

ADM chairman and CEO Juan Luciano said: “We continued to execute our strategic plan in the quarter. We acquired Caterina Foods, a manufacturer of specialty gluten-free and high-protein pastas. In addition, we further invested in Asia’s growing and evolving food demand by increasing our strategic ownership stake in Wilmar to 23%. Our ethanol dry mill review has progressed and we are targeting receipt of final proposals from a short list of interested parties by the end of the calendar year.

“And, we have implemented nearly $250 million of new run-rate savings actions through the third quarter and expect to exceed our $275 million target by the end of the calendar year. In line with our balanced capital allocation framework, we have returned $1.3 billion to shareholders in dividends and share buybacks through the first nine months of the year.

“With improving market conditions and a large U.S. harvest, combined with the team’s solid execution capabilities, we feel good about the remainder of the year and a stronger 2017.”