ADM expects current trade policy uncertainty to impact business

The animal nutrition subsegment of Chicago-based Archer-Daniels-Midland Company (ADM) – which covers both pets and livestock – posted an operating profit of $26 million (€25M) from October to December 2024, 73% more than during the same period in 2023. The company says cost optimization actions and lower input costs supported higher margins in Q4.

The segment posted $59 million (€56.8M) in operating profit in the full year, up from $10 million (€9.6M) in 2023. This was thanks to cost optimization and lower input costs. The company told investors they expected slow but steady improvement in animal nutrition numbers, noting it was “not a revenue story, but a margin improvement story.”

CFO Monish Patolawala blamed the negative currency impact in Brazil, where ADM produces soybean products, and lower volumes due to demand fulfillment challenges.

The global picture

ADM posted a global segment operating profit of $1.1 billion (€1.1B) in Q4 2024, down 16% year-on-year (YoY). Full-year operating profit was $4.2 billion (€4.0B), down 28% relative to 2023.

Biofuel and trade policy uncertainty and inflationary impacts caused significant disruption to the company in Q4. While inflation on some staple goods has decreased, ADM says it saw softer demand as customers are still looking to cut costs.

Outlook

Tariff possibilities have created an extra headache for ADM, which has facilities throughout the Americas, though possible trade barriers were not considered in its future guidance. The company did not release exact numbers for its nutrition sector but expects operating profit to be higher in 2025.

“With softer market conditions and policy uncertainty around the world going into 2025, we are focused on improving our operational performance, accelerating cost savings and simplifying our portfolio,” states Board Chair and CEO Juan Luciano. 

As the company prepares to simplify its offerings, Luciano has not specified which sectors of the business could be on the chopping block but promises a “phased approach” to “potential closures and divestitures.”

ADM expects adjusted earnings per share in the range of $4.00 (€3.85) to $4.75 (€4.57) per share, reflecting “weaker market fundamentals and ongoing biofuel and trade policy uncertainty.”