Chicago, IL - ADM (NYSE: ADM) today reported financial results for the quarter ended December 31, 2019.
“Our team delivered a solid fourth quarter, consistent with our expectations three months ago,” said Chairman and CEO Juan Luciano.
“At the end of 2019, we can look back on a full year in which the team did a great job managing through some difficult external conditions while continuing to deliver innovative solutions for our customers.
“Looking ahead, we’re excited about the opportunities we see in 2020 and beyond.
"Our industry-leading array of products and solutions from nature is helping us give our customers an edge in meeting global demand in fast-growing consumer trend areas — from alternative proteins, to foods and beverages that enhance health, to unique products for pets.
"We expect market conditions to improve as the year progresses, particularly as impacts from the U.S.-China Phase 1 trade deal take hold.
"More importantly, another year of expected 20-plus percent growth in Nutrition profitability, combined with our work to improve business performance, advance Readiness, and harvest our growth investments, give us confidence in strong results in 2020 and the years to come.”
Fourth Quarter 2019 Highlights
Results of Operations
Ag Services & Oilseeds results were higher year over year, and included approximately $270 million net operating profit impact from the passage of the biodiesel tax credit (BTC) for 2018 and 2019.
Carbohydrate Solutions results were lower than the fourth quarter of 2018.
Nutrition results were substantially higher year over year.
Other results were up significantly year over year. Captive insurance results were negative, but substantially better than the fourth quarter of 2018. ADM Investor Services results were higher versus the prior-year period.
Other Items of Note
As additional information to help clarify underlying business performance, the table on page 10 includes reported earnings and EPS as well as adjusted earnings and EPS.
Segment operating profit of $934 million for the quarter includes charges related to asset impairment and restructuring activities of $94 million ($0.15 per share).
In Corporate results, unallocated corporate costs for the quarter were higher year over year principally due to continued investments in IT, business transformation, and higher benefit accruals.
Other charges increased due to a railroad maintenance expense that had an offsetting benefit in tax expense, partially offset by improved foreign hedging results on intercompany funding.
During the quarter, the sale of our interest in Compagnie Industrielle et Financiere des Produits Amylaces SA (CIP) resulted in a pre-tax loss of $101 million and a $32 million tax expense (combined $0.24 per share).
The sale generated pre-tax proceeds of $210 million in December.
In addition, there were non-cash early retirement charges and global workforce restructuring charges of $9 million ($0.01 per share), and a LIFO charge of $27 million ($0.04 per share).
The effective tax rate for the quarter was approximately a positive 1 percent compared to a positive 2 percent in the prior year.
The calendar year 2019 effective tax rate was 13 percent compared to 12 percent in 2018.
The low 2019 tax rate is due primarily to the impact of U.S. tax credits signed into law in December. In the absence of tax credits and specified items, the effective tax rate for calendar year 2019 would have been approximately 19 percent.
Read the full financial report here.
For more information, please contact Jackie Anderson at 312-634-8484.