10-QPeriod: Q2 FY2021

Archer-Daniels-Midland Co Quarterly Report for Q2 Ended Jun 30, 2021

Filed July 27, 2021For Securities:ADM

Summary

Archer-Daniels-Midland Co. (ADM) reported a strong second quarter and first half of 2021, with significant increases in revenue and net earnings attributable to controlling interests compared to the prior year. This performance was driven by robust demand across its key segments, particularly Ag Services and Oilseeds, and Carbohydrate Solutions, benefiting from higher commodity prices and improved operational efficiency. The company demonstrated strong liquidity and a healthy balance sheet, with substantial unused lines of credit and a manageable debt-to-capital ratio, positioning it well for continued growth and strategic initiatives. ADM's strategic focus on Productivity and Innovation, coupled with a commitment to sustainability, underpins its forward-looking strategy. The company's recent acquisition agreement for Sojaprotein further signals its intent to expand its global footprint in the nutrition sector. Despite facing ongoing market volatilities and potential regulatory challenges, ADM's diversified business model and effective risk management strategies appear to be yielding positive financial results, making it an attractive investment prospect.

Financial Highlights

49 data points
Beta

Revenue

$22.93B

6.4% Gross Margin

Net Income

$712.00M

3.1% Net Margin

EPS (Diluted)

$1.26

Total Assets

$50.96B

Cash & Equivalents

$869.00M

Free Cash Flow

$2.46B

Financial Statements
Beta
Revenue$22.93B
Cost of Revenue$21.46B
Gross Profit$1.46B
SG&A Expenses$739.00M
Interest Expense$40.00M
Net Income$712.00M
EPS (Basic)$1.26
EPS (Diluted)$1.26
Shares Outstanding (Basic)564.00M
Shares Outstanding (Diluted)566.00M

Key Highlights

  • 1Net earnings attributable to controlling interests significantly increased by 52% for the three months ended June 30, 2021, reaching $712 million, compared to $469 million in the prior year.
  • 2Total revenues for the quarter rose by 40% to $22.9 billion, primarily driven by higher sales prices across segments.
  • 3Segment operating profit increased by 40% to $1.15 billion for the three months ended June 30, 2021, reflecting strong performance in Ag Services and Oilseeds, and Carbohydrate Solutions.
  • 4The company generated $3.0 billion in cash from operating activities for the six months ended June 30, 2021, a substantial improvement from a use of $0.4 billion in the same period last year.
  • 5ADM announced an agreement to acquire Sojaprotein, a European provider of non-GMO soy ingredients, subject to regulatory approvals, indicating a strategic move to enhance its Nutrition segment.
  • 6The company maintained a healthy financial position with $8.6 billion in unused lines of credit and a manageable long-term debt to total capital ratio of 28% as of June 30, 2021.
  • 7Effective tax rate for the quarter was 13.7%, with favorable discrete tax items contributing to the rate.

Frequently Asked Questions

ADM reported a significant increase in both revenue and profitability. For the three months ended June 30, 2021, total revenues grew by 40% to $22.9 billion, and net earnings attributable to controlling interests rose by 52% to $712 million, or $1.26 per diluted share, compared to the same period in 2020.

The improved performance was driven by several factors, including higher commodity prices and volumes across its segments, particularly Ag Services and Oilseeds and Carbohydrate Solutions. Strong demand for its products, effective risk management in volatile commodity markets, and contributions from equity investments like Wilmar also played a significant role.

ADM is focused on two strategic pillars: Productivity and Innovation. This includes enhancing operational efficiencies, leveraging technology, improving customer experience, and driving sustainability-driven innovation. The company also recently announced an agreement to acquire Sojaprotein, a move that aligns with its growth strategy in the nutrition sector. ADM is also committed to environmental responsibility, with goals to eliminate deforestation from its supply chains by 2030 and reduce greenhouse gas emissions by 25% by 2035.

ADM maintains a strong liquidity position, with $8.6 billion in unused lines of credit as of June 30, 2021. The company reported $3.0 billion in cash from operating activities for the first six months of 2021. Its long-term debt to total capital ratio was a healthy 28%, indicating a solid balance sheet that supports its operational and capital expenditure needs.