Food/Feed Ingredients Processor ADM: 2009 Full Year Fiscal Report

Archer Daniels Midland Company (NYSE: ADM), one of the leading food ingredients processors, reported "solid full-year results," for fiscal 2009 in a news release on August 4.

ADM produces food ingredients, as well as animal feeds and biofuels, that manufacturers use in their products. The company's goal, according to their mission statement is, "To unlock the potential of nature and improve the quality of life."

Despite decreased fourth-quarter earnings, which were attributed to the "global economic downturn," ADM remains focused on the corporate mission and plans. Chairman of the Board and Chief Executive Officer Patricia Woertz remains optimistic as demand outlook is improving.

Woertz responded to the results by saying,

"In the fourth quarter, we felt the impact of the global economic downturn, as we concluded a year of good performance overall. In this downturn, we used our strong balance sheet and cash flow to make strategic investments and build long-term value."

The following is some key financial data from the news release:

(Note: Fiscal year ended June 30, 2009)

• Net earnings for the year decreased 5%, from $1.8 billion to $1.7 billion ($2.79 per share to $2.65 per share).


• Net sales and other operating income for the year decreased 1%, from $69.8 billion to $69.2 billion.


• Segment operating profit for the year decreased 29%, from $3.4 billion to $2.5 billion.


• Net earnings for the fourth quarter decreased 83%, from $372 million to $64 million ($0.58 per share to $0.10 per share).


• Net sales and other operating income for the fourth quarter decreased 24% to $16.5 billion.


• Segment operating profit for the quarter decreased 73% to $208 million.

After reading this data, the results may not seem to be as "solid" as ADM would like, however, the first three quarters of 2009 were on target.

ADM justifies their position with economic statistics and information relevant to Q4 results.

The company cites decreased global demand for oilseeds processing, higher net corn costs with weak ethanol environment, and weaker global demand for agricultural commodities, as culprits in the Q4 fiscal performance.

ADM also emphasizes the success of their strategic investment activities for 2009. Goals planned and achieved include:

1. building out major projects, including several co-generation plants, and cocoa processing, renewble plastic, and propylene/ethylene facilities.


2. improving processing operations with capacity expansions and selective aquisitions.


3. expanded the global origination and transportation network, adding silos and barges as well as oceangoing vessels.


4. formed strategic joint ventures, including adding sugarcane to its feedstock base and constructing two sugar and ethanol plants.

With these benchmarks accomplished, ADM is positioned for success in 2010.

Woertz asserts, "As we look ahead, we see signs of improving demand in the various food, feed and fuel markets we serve. We remain functionally strong and well positioned to capture value as global markets recover."