By Gus Trompiz
PARIS (Reuters) -Louis Dreyfus Company (LDC) on Wednesday reported a 44% jump in 2022 net profit, joining other global crop merchants in capturing high prices and strong demand in a volatile year marked by Russia’s invasion of fellow grain exporter Ukraine.
LDC, whose rivals include ADM, Bunge and Cargill, reported a group net profit of just over $1 billion versus $697 million a year earlier.
Net sales rose almost 21% to $59.9 billion from $49.6 billion.
Russia’s invasion of Ukraine contributed to surging prices and supply tensions in staple crops.
Bunge and ADM both reported record 2022 earnings and have forecast healthy profits for this year.
LDC’s grains and oilseeds unit further increased operating results last year after a strong 2021, supported by strong demand from importers, although operations in Europe, the Middle East and Africa were negatively impacted by logistics difficulties in the Black Sea amid the war in Ukraine, it said.
Like other foreign grain firms, LDC scaled back operations in Ukraine and Russia this year due to the war. Products sourced from the two countries made up 2% of group sales last year, versus less than 4% the prior year, it said.
In Ukraine, the re-opening of sea trade, under a wartime agreement backed by the United Nations and Turkey, allowed some export volumes, while LDC had also made use of non-maritime logistic channels with extra costs, it said.
The company incorporated a new legal entity in Romania to support its operations in the zone, it said.
In Russia, where LDC operates silos and a grain export terminal, the group resumed operations after initially suspending activity.
For a long-delayed joint venture project to build a deep-sea terminal in the Taman peninsula, LDC recognised a $156 million impairment as of Dec. 31, it added.
Improved results and the sale of a stake in 2021 to Abu Dhabi holding firm ADQ have eased financial pressure on LDC and main shareholder Margarita Louis-Dreyfus after several years of modest profits and mounting debt.
Group equity rose to a record $6.1 billion as of Dec. 31, 2022, while its adjusted net debt fell to $0.4 billion by Dec. 31 from $1.5 billion a year earlier, the company said.
LDC also announced a 33.6% reduction target for its Scope 1 & 2 greenhouse gas emissions by 2030, compared with a baseline year of 2022.
(Reporting by Gus Trompiz; editing by Sudip Kar-Gupta and Jason Neely)