ADM helped by cocoa press margins, but overall profit down

Total group sales for the quarter stood at $21.2bn, up 5.2% on the same quarter last year, while profit fell 12% to $887m

Cocoa press margins​

In its ‘other processing’ segment, which includes cocoa and wheat,  profits rose $105m to $201 million driven by cocoa press margins.

Cocoa results this quarter were impacted by $72 million in mark-to-market net timing gains. The underlying performance in cocoa remained strong, driven by good cocoa press margins.

ADM chief operating officer, Juan R. Luciano, said in the company’s Q3 conference call: “Cocoa results this quarter were impacted by $72 million in mark-to-market timing gains.”

Mark-to-market is the price of ADM’s cocoa compared to the going market rate.

Future impact​

Ray G. Young, said that ADM would be impacted by negative mark-to-market in future.

“If you recall in the last quarterly call, we indicated there was about $100 million of negative -- accumulated negative mark-to-market that would unwind over the course of the future. “​

“The net timing affect that we identified in this quarter was approximately $70 million. So if you do the mathematics, then there's still about $30 million of cumulative negative mark-to-market impacts that will unwind in the future.”​

“Hopefully, as we start off the new fiscal year, you won't hear me talk about mark-to-market timing effects as much or at all in terms of our future results,”​ he continued.

He added that the exact timing negative mark-to-market was yet to be determined.

ADM recently announced the opening of a new development centre for its customers in Koog aan de Zaan in the Netherlands to provide advice on chocolate and cocoa products.