Global agricultural giant Archer Daniels Midland Co. (ADM) announced yesterday, May 6th, that its ethanol business performed better in the first three months of the year compared to the same period last year. The company cited increased production and better profit margins as key drivers, reports Ethanol Producer Magazine.
While overall profit margins for ADM’s ethanol production were slightly below zero during the first quarter, company leaders anticipate an improvement in the current second quarter, expecting margins to climb just above the break-even point.
The ethanol operations fall under ADM’s Carbohydrate Solutions division, which reported a total operating profit of $240 million for the first quarter, a 3% decrease from the first quarter of 2024. Within this division, the Vantage Corn Processor unit, which handles dry mill ethanol production, showed a significant turnaround. It reported an operating profit of $33 million for the first quarter, a positive shift from the $13 million loss experienced during the same period last year. ADM stated that this improvement was due to producing more ethanol and achieving better profit margins on those sales.
During a conference call discussing the company’s first-quarter financial results, ADM’s Chief Financial Officer, Monish Patolawala, noted that the profit margin per gallon of ethanol was slightly negative in the first quarter. However, he expressed optimism for the current quarter, predicting a slight move into profitable territory.
ADM’s Chief Executive Officer, Juan Luciano, commended the company’s ethanol team for their strong risk management, which he said allowed them to perform better than the wider market. While hopeful that ethanol profit margins will continue to improve throughout the year, he acknowledged the existing uncertainty within the market.
Across all its business segments, ADM reported a total operating profit of $747 million for the first quarter, a decrease from the $1.2 billion reported in the same period of 2024. The company’s earnings before income taxes were $353 million, down 60%. On a per-share basis, GAAP earnings were 61 cents, a 57% decrease, and adjusted earnings per share were 70 cents, a 52% decrease compared to last year.
