logo
menu
← Return to the newsfeed...

ADM reiterates plans for strategic review of ethanol dry mills

Archer Daniels Midland (ADM), a US-based global food processing and commodities firm, has reiterated that it is conducting a strategic review of its ethanol dry mills in its second-quarter earnings report.

The company unveiled its report on 2 August, 2016. It reported a lower-than-expected quarterly profit, hurt by poor ethanol margins and lower earnings from its agricultural services unit, which includes exporting and trading operations. 

Net earnings attributable to ADM fell to $284 million (€253m), or 48 cents per share, for the quarter ended 30 June from $386 million, or 62 cents per share, a year earlier.

With ethanol margins continuing to be weak coming into the quarter due to high industry inventory levels, the company said it decreased production.

In its statement, the company said it continued to make progress in the strategic review of our ethanol dry mills.

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 simple 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.

“After a challenging start to the year, general market conditions began to turn at the end of the second quarter, providing us with improved opportunities for the second half of the year,” said ADM chairman and CEO Juan Luciano.

He added: “Weak grain handling margins and merchandising results continued for Ag Services. Results for corn included strong performance in sweeteners and starches offset by lower ethanol results.

“Our oilseeds operations leveraged their flex capacity to crush record volumes of soybeans in the second quarter as global protein demand continues to grow.”

A gain of $63 million in corn processing related to the sale of the Brazilian sugar-ethanol business, ADM said.  In April, ADM sold this business citing a "challenging" ethanol market.





224 queries in 0.571 seconds.