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ADM touts post-drought progress to shareholders

(MCT) DECATUR — Key portions of the Archer Daniels Midland Co. business hard-hit by last summer’s widespread drought are showing signs of improvement.

Yet, the company is being cautious as it moves forward, especially given the wet start to the spring.

“The actions we took helped position us to continue managing through the difficulty into the first quarter this year,” ADM Chairman, President and CEO Patricia Woertz told company shareholders Thursday during its annual meeting at the Randall Research Center in Decatur. “The ethanol business has improved, and we expect to see positive results to improve profitability.”

During the meeting, Woertz reviewed the company’s performance in an abbreviated fiscal year covering the last six months of 2012. ADM has switched its fiscal year to align with its tax and regulatory year. Due to that switch, it moved the annual meeting, typically held in the fall, to the spring.

It reported net earnings of $692 million during the shortened fiscal year. ADM’s first-quarter earnings that were reported Wednesday were $269 million, or 41 cents per share, down 60 cents per share from the same period last year. The quarter ended March 31.

The dividend given to shareholders increased to 19 cents per share during the difficult times, Woertz noted. ADM has now paid dividends in 326 consecutive quarters, which is a span of 81 years.

The company’s ethanol margins have been closely watched during the drought. After taking a hit, Chief Operating Officer Juan Luciano told industry analysts that ethanol has started to bounce back.

ADM was not running its ethanol plants at 100 percent capacity during the entire quarter, but Luciano said that has since been brought back to normal.

“When ethanol margins are good, some of the capacity might come back,” Luciano said. “At the moment, they are healthy margins.”

ADM Chief Risk Officer Craig Huss didn’t seem as concerned about the wet spring and delayed planting as about dry conditions.

“The drought ended, and we’re very wet,” Huss said. “With wet, we have much more opportunity going forward. We will be tight and have to manage margins.”

Woertz told shareholders that the company sees a tremendous opportunity in its bid to acquire Australian agribusiness GrainCorp. The $3.1 billion deal would be the largest acquisition in company history, Woertz said.

As it moves forward, Woertz said ADM wants to be more than a supplier. It anticipates helping clients stay ahead with innovation, problem solving and providing training, she said.

ADM is looking to develop its employees through training related to cost management, sales techniques, leadership and by providing tuition assistance for additional educational opportunities, Woertz said.

The company has met its billion-dollar challenge to control cash, capital and costs. Woertz said $1.6 billion has been freed up with plans to find ways to save even more money throughout the company.

Woertz was once again asked by a shareholder about ADM’s commitment to Decatur and whether a move to Chicago is being considered. ADM is an important part of Decatur’s economy, Woertz said.

“We have a significant presence here, and we’re investing here,” Woertz said. “We’ll always be an important part of the community.”

Despite the shortened fiscal year, Woertz said ADM spent more than $1 million in Decatur during that time to support education, social services, hunger relief and infrastructure.


©2013 the Herald & Review (Decatur, Ill.)

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