(Reuters) -Archer Daniels Midland Co reported a surge in first-quarter profit on Tuesday and forecast “significant year-over-year growth” in 2021 as coronavirus vaccinations accelerate and pandemic restrictions continue to ease, sending shares to a record high.
Quarterly profit jumped 76% as robust import demand from China and strong oilseed crushing margins boosted the U.S. grains merchant’s core agricultural services and oilseeds unit.
ADM results offered an early glimpse into how the world’s largest grain traders are emerging from the pandemic that triggered massive shifts in food and fuel demand as consumers cooked more meals at home and avoided unnecessary travel.
Further easing of pandemic restrictions are expected to benefit agribusinesses like ADM and its rivals Bunge Ltd, Cargill Inc and Louis Dreyfus Co, known as the ABCD quartet of grain trading giants.
“We are seeing clear, favorable demand trends for many of our products, and we expect that pattern to continue as vaccine rollouts accelerate and restrictions ease,” ADM’s Chief Executive Officer Juan Luciano said, adding that all of its business segments should post stronger year-over-year results in 2021.
But slow vaccine rollouts in some parts of the world suggest an uneven, years-long recovery from the virus, he said.
ADM said its agricultural services and oilseeds unit recorded a record first quarter despite slow farmer selling and a delayed harvest in South America. The company’s oilseed crushing operations recorded their strongest ever quarter, ADM said.
ADM recently restarted two dry corn ethanol mills it idled during the pandemic amid rising demand, but said it remains committed to selling the facilities.
Net earnings attributable to ADM rose to $689 million, or $1.22 per share, in the three months ended March 31, from $391 million, or 69 cents per share, a year earlier.
Quarterly revenue climbed 26.2% to $18.89 billion, blowing past Wall Street’s expectation of $16.38 billion, according to Refinitiv IBES.
ADM stock was up 3.8% at $62.25.
Reporting by Karl Plume in Chicago and Arunima Kumar in Bengaluru; Editing by Ramakrishnan M., Chizu Nomiyama and Nick Zieminski