ADM anticipates difficulties extending into 2025; concentrate on cost containmen

ADM sees challenges  that will continue in 2025,  with a focus on cost  control
ARCH PHOTO: A general view of Archer Daniels Midland headquarters in Decatur 
ADM
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CHICAGO (Reuters) - Global  grain trader Archer-Daniels-Midland said on Tuesday the company  was focused on controlling costs as a "challenging"  commodity cycle that eroded profits is  expected to continue  in 2025.
Weak crop prices and uncertainty  over biofuel regulation are among the  headwinds for the company, while a  potential tariff battle between the  US and China could  disrupt already global trade  flows. from January, the company said in an earnings  conference call.
ADM and its agribusiness  rivals, including Bunge and  Cargill, saw their profits erode as prices for  commodity crops  such as corn and soybeans  fell to four-year  lows. years on  tight supply, while inflation  has overwhelmed demand.
Cargill said on Tuesday it plans to cut  about 5% of its global  workforce due to a  drop in revenue.
"The global commodity landscape has continued to  change. "Larger-than-expected supplies have  caused raw material prices  to fall more than  expected," ADM CEO Juan Luciano  said.
"We are also seeing the effects of inflation in parts of our  business," he said, adding that some ADM customers have  cut back on their spending.
Federal investigations into accounting irregularities at ADM have  added to the pressure on the company, whose  stock price has  fallen more than 25% this  year.
The company was forced to  restate a total of  6 ½ years of financial data in March and November after discovering that sales between its  food business and other core units were not  properly recorded.
Last month, ADM lowered its  earnings outlook for 2024, citing  political uncertainty,  weak demand and  "internal operational  challenges." It has not yet detailed its 2025  target. "It's too early in the year, there are too many unknowns, especially on the regulatory  side, to make  predictions for the  year," Luciano  said.
But he said  potential disruptions to global trade  resulting from a possible U.S.-China tariff battle could benefit  ADM and the company has  "scenario planning" to  prepare for it.
"Normally what we see in these circumstances is that trade flows adjust. At the end of the day,  there's still some demand  around the world,  it's just  being met in a different  way," Luciano  said.
"It's in these situations  that ADM's global footprint and global team  typically shine."
ADM shares  fell 2.2%  by midday  to $53.10.