By Gus Trompiz
PARIS (Reuters) -Louis Dreyfus Company (LDC) on Wednesday reported a drop in annual profit, the latest global crop merchant to see earnings curbed by subdued prices last year in staple grains caused by ample harvests and easing demand in China.
LDC, whose competitors include ADM, Bunge and Cargill, said in a results statement that its earnings before interest, taxes, depreciation, and amortisation reached $1.88 billion, down 15% compared with 2023. Net income fell 28% to $726 million.
Net sales were stable at $50.6 billion, supported by a 17% rise in volumes.
The group’s grains and oilseeds business recorded lower operating profit after strong 2023 performance, with its corn and soybean activities affected by a context of low volatility, LDC added in an annual report.
Like its peers, it also pointed to reduced oilseed crushing margins in China and the United States, with the U.S. market affected by uncertainty over biofuel policy.
Global prices of corn, wheat and soybeans last year slipped to their lowest since 2020 amid rising supplies and signs of slowing demand from China, a turnaround from high prices in the wake of Russia’s invasion of Ukraine in 2022.
ADM and Bunge both reported lower fourth-quarter earnings.
Crop traders also face international trade volatility as U.S. President Donald Trump pushes tariffs as an economic and diplomatic tool.
Bunge warned that its 2025 earnings could sink to the lowest in six years, partly due to trade tensions.
Tougher market conditions have led Cargill to embark on a push to lower its headcount by 5% and ADM to plan a reduction of up to 700 jobs.
LDC said its coffee business recorded higher earnings, supported by increased margins and volumes against a backdrop of weather setbacks to crops, while its sugar division’s profits declined as prices were more range-bound than the previous year.
LDC has partly shifted its focus towards the consumer end of the food chain to be less reliant on commodity trading.
Last year, it bought an ingredients business from chemicals maker BASF, launched a juice brand and created a unit trading in pulses, which include beans, lentils and peas.
The group said it increased capital expenditure sharply last year to $1 billion from $636 million in 2023.
(Reporting by Gus Trompiz; Editing by Joe Bavier)
