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The growing use of vegetable oil for biofuels boosted second-quarter profits for global agribusiness giant Archer Daniels Miller (ADM), World Grain reported July 28.
ADM's net profit for the quarter ended June 30 was US$712 million – an increase of US$469 million in the previous year's second quarter, while net revenue increased by US$22.93 billion from US$16 .28 billion, according to the report.
Against a backdrop of growing demand for vegetable oils, ADM said it was planning to build a US$350 million soybean crushing plant and refinery in Spiritwood, North Dakota, USA, World Grain wrote.
“We expect demand for green diesel in the U.S. to continue to warrant a higher rate of growth, increasing by approximately 1 billion gallons per year and reaching up to 5 billion gallons by 2025,” said ADM President and CEO Juan R. Luciano, in a July 27 earnings call.
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“Vegetable oils will be an essential raw material to meet this growing demand,” he added.
Sustainable aviation fuel (SAF) could become another growth area for ADM, according to the report.
“We are considering leveraging our carbon sequestration site in Decatur, Illinois… with our corn processing production as feedstock for SAF to arrive at a low-carbon SAF product,” Executive Vice President and Chief Financial Officer of ADM, Ray Guy Young was quoted as saying.
In ADM's oilseeds and services business, adjusted operating profit of US$570 million was 38% higher than the previous year's second quarter's US$413 million, with net revenue jumping from US$12.74 billion to US$18.27 billion.
Milling results were higher year over year as strong demand for vegetable oil led to higher run margins on North American soybeans and EU light seeds, World Grain wrote.
“We are very optimistic about the prospects for crushing the rest of the year and next year,” Luciano said.
Source: OFI Magazine
This text was automatically translated from English.
