Agricultural commodity trader Louis Dreyfus on Monday reported lower first-half profits due to the hedging of soy margins, which it said would nevertheless improve its performance for the rest of the year.
Louis Dreyfus, the "D" of the "ABCD" quartet of major agricultural commodity traders alongside Archer Daniels Midland, Bunge and Cargill, said net profits, including discontinued operations, had fallen to $100 million (€87.1 million) from $160 million (€139.4 million).
The Results
Gross profit, which it calls segment operating results, reached $493 million (€429.4 million) in the six months to 30 June - also down from $542 million (€472.1 million) in the same period last year.
Group sales were stable at $18.8 billion (€16.4 billion), as a 6.3% drop in volumes shipped was offset by higher prices,
"The lower net income reflects a temporarily negative mark-to-market recognised by the group as of 30 June, attributable to our hedging strategy of locking in soy crush margins," Louis Dreyfus said in a statement
"This will ensure a high return from our crushing activities for the whole of 2018," added the company.
Management Changes
Chief Executive Ian McIntosh had told Reuters after his appointment two weeks ago that the company's results so far this year were "significantly improved", brushing off talk of a crisis following the surprise exits of the group's former CEO and finance chief.
The departure of both Gonzalo Ramirez Martiarena, who had served as CEO for three years, and Armand Lumens, who was CFO for just 18 months, reignited speculation regarding the family-owned firm, which has seen a series of management shakeups and faced growing financial pressures.
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