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(Reuters) -U.S. agribusiness company Archer-Daniels-Midland Co on Thursday reported upbeat fourth-quarter earnings as strong soy crushing margins and hefty demand for crops boosted operating profit by 46% in its core Ag Services and Oilseeds unit.
The strong result in ADM’s largest business segment offset weaker earnings from ethanol biofuel operations and its Nutrition business.
Earnings topped the consensus analyst estimate for a 14th consecutive quarter.
The results offered a look into how global crop merchants have weathered rising energy costs and supply chain disruptions, such as lower grain exports from the Black Sea breadbasket region following Russia’s invasion of Ukraine.
ADM and agribusiness rivals including Bunge (NYSE:BG) Ltd, Cargill Inc and Louis Dreyfus Co make money by processing, trading, and shipping crops around the world. Supply chain middlemen such as ADM tend to thrive when crises such as droughts or war trigger shortages.
ADM said the adjusted operating profit from its Ag Services and Oilseeds business rose to $1.18 billion from $810 million a year earlier as strong South American crop exports and good margins offset negative impacts from reduced U.S. exports.
Low water on the Mississippi River in September and October restricted barge shipments of newly harvested crops to U.S. Gulf Coast terminals during the peak post-harvest U.S. export season.
Quarterly oilseed crushing profits more than doubled from a year earlier, ADM said.
ADM’s Carbohydrate Solutions business posted a nearly 40% drop in operating profit due largely to weak ethanol margins and high inventories.
Profits in its Nutrition unit also fell.
ADM raised its quarterly dividend by 12.5% to 45 cents.
The company’s adjusted net earnings stood at $1.1 billion, or $1.93 per share, for the three-month period ended Dec. 31, compared with analysts’ estimate of $1.65 per share, based on Refinitiv data.
