On July 30, ADM released its second-quarter results, highlighting improved ethanol margins driven by strong demand for fuel ethanol in both domestic and export markets. The company expects these stronger margins to persist into the third quarter.
ADM’s ethanol operations fall under the Carbohydrates Solutions segment, which reported an operating profit of $357 million for the second quarter, a 12% increase compared to the same period in 2023. The Vantage Corn Processing subsegment, which includes the company’s dry mills, reported an operating profit of $34 million, marking an 89% rise. This increase was attributed to higher ethanol margins driven by strong export demand.
During the second-quarter earnings call, ADM President and CEO Juan Luciano noted that ethanol margins improved as industry production struggled to meet robust domestic and export demand.
ADM Senior Vice President and Interim Chief Financial Officer Ismael Roig observed that ethanol markets became more favorable toward the end of the second quarter, with reduced stocks boosting both domestic and export margins. Roig mentioned that the strong demand for ethanol was supported by the U.S. summer driving season, high domestic blending rates, and export demand. Looking ahead to the third quarter, he anticipated continued solid demand for ethanol in both domestic and export markets, with potential opportunities if market fundamentals remain strong.
Overall, ADM reported earnings before taxes of $596 million, a 47% decrease compared to the previous year due to lower pricing, execution margins, and higher corporate unallocated costs. Adjusted segment operating profit was $1.021 billion, down 37%, and adjusted earnings per share were $1.03, a 46% decline.
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