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ADM reports 4th quarter earnings

ADM reports 4th quarter earnings

CHICAGO–(BUSINESS WIRE)– Archer Daniels Midland Company (NYSE: ADM) today reported financial results for the quarter ended Dec. 31, 2015.

 

The company reported adjusted earnings per share1 of $0.61, down from $1.00 in the same period last year. Adjusted segment operating profit1 was $599 million, down 47 percent from $1,128 million in the year-ago period. Net earnings for the quarter were $718 million, or $1.19 per share, and segment operating profit1 was $900 million. Global dynamics reduced margins across the U.S. agricultural export sector, the U.S. ethanol industry and in the soybean crushing industry worldwide.

 

“Adverse market conditions that impacted many of our businesses earlier in the year continued through the fourth quarter,” said Juan Luciano, ADM chairman and CEO. “Despite the challenging conditions, we achieved 2015 adjusted ROIC of 7.3 percent, 70 basis points above our annual cost of capital, generating positive EVA. In the fourth quarter, we advanced our strategic plan by expanding our international corn processing footprint with the acquisition of Eaststarch, progressing our destination marketing strategy with the announcement of the Medsofts Egyptian joint venture, and strengthening our European Olenex refined oils joint venture. And, today we are announcing an investment in Harvest Innovations, a leading producer of non-GMO, organic and gluten-free ingredients. From a portfolio management perspective, we completed the sale of our global cocoa business.

 

“With current headwinds likely to persist, we remain focused on the areas within our control. We will continue to implement our pipeline of operational excellence initiatives, with an objective of an incremental $275 million of run-rate savings by the end of the calendar year. As part of the evolution of our strategic plan, we are taking a fresh look at the capital intensity of our operations and portfolio, seeking innovative ways to lighten-up and redeploy capital in our efforts to drive long-term returns.

 

“In 2016, our balanced capital allocation framework remains a priority, including a quarterly dividend rate increase of 7 percent to $0.30 per share, and share repurchases of between $1.0 billion and $1.5 billion, subject to strategic capital requirements. With a strong balance sheet, we will also remain opportunistic for investments, especially bolt-ons, in this more challenged macro environment.”