ADM Posts Q2 FY 2022 Financial Results


In a July 26th pre-market release, Archer-Daniels-Midland Corp. (ADM) posted financial results for the 2nd quarter of fiscal 2022. This Company can be regarded as a bellwether for ‘Mega-Ag’ and the commodities sector. Along with competitors Bunge, Cargill, Cofco and Dreyfus, all are subject to the risks of currency fluctuation, geopolitical events, climatic extremes, and increased cost of ingredients, labor and transport in a competitive world environment impacted by the invasion of Ukraine.


For the 2nd Quarter of FY 2022 ending June 30th, net income was $1,236 million on total revenue of $27,284 million.  Comparable figures for the 2nd quarter of fiscal 2021 ending June 30th 2020 were net income of $712 million on total revenue of $22,926 million.  EPS rose from $1.26 for the 2nd quarter of fiscal 2021 to $2.18 for the most recent quarter. For Q2 2022 ADM beat on both the top and bottom lines. Gross margin increased from 6.3 percent in Q2 2021 to 7.7 percent for the most recent quarter. The Animal Nutrition Segment contributed $56 million ($39 million Q2 2021) to total Company segment operating profit of $1,800 million.


In commenting on results, Chairman and CEO Juan Luciano stated “Our second quarter adjusted earnings per share of $2.15 reflect our team’s strong execution, delivering nutrition to billions of people around the globe.” He added “In addition, our productivity initiatives are improving our capabilities and mitigating the impact of inflation, while our innovation projects are powering profitable growth, as we leverage our unique portfolio and globally integrated network to meet demand driven by the three enduring global trends of food security, health and well-being, and sustainability.


He concluded “Looking forward, we expect the combination of our strategic actions and continued good demand for our products to propel very strong earnings in the second half of 2022, with strong cash flows enabling us to accelerate approximately $1 billion in share repurchases into the back half of the year. Beyond that, we will continue to execute the growth plan we laid out at our Global Investor Day, while maintaining our focus on balanced capital allocation and optimizing ROIC.”


On June 30th 2022, ADM posted assets of $39,624 million, against long-term debt of $9,166 million. The Company had an intraday market capitalization of $41,555 million on July 26th. ADM trades with a forward P/E of 13.1 and has ranged over a 52-week period from $57.53 to $98.88 with a 50-day moving average of $80.37.  Twelve-month trailing operating margin was 3.6 percent and profit margin 3.4 percent.  Return on assets over the past twelve months was 3.5 percent and the return on equity 13.8 percent. At close of trading on July 25th pre-release, ADM priced at $75.68. At13H00, post-release on July 26th ADM traded at at $77.86