Crop merchant Louis Dreyfus posts higher results amid Ukraine war

Agricultural commodity group Louis Dreyfus reported on Thursday higher first-half sales and profits, saying it had adapted to supply disruption caused by the war in Ukraine to increase volumes and benefit from higher prices.

Louis Dreyfus, whose rivals include ADM ADM.N, Bunge BG.N and Cargill, said net sales for the six months ending June 30 rose to $30.3 billion from $24 billion a year earlier, while net income rose to $662 million from $336 million last year.

The earnings of international crop traders have been boosted in the past year by high prices and tight supplies, with market tension heightened by Russia’s Feb. 24 invasion of Ukraine.

“Despite very limited origination possibilities from the Black Sea, we nevertheless grew volumes shipped in the first half of the year,” Chief Executive Michael Gelchie said in an interim report.

Like other foreign grain firms, LDC scaled back operations in Ukraine and Russia this year due to the war.

The group reiterated that products it sourced from the two countries made up less than 4% of its dollar net sales last year.

In Ukraine operations continue at a reduced level, LDC said, including non-maritime routes. It reported provisions and impairments of $118 million for its Ukrainian operations within its cost of sales as of June 30.

For Russia, the group had resumed operations to the extent made possible by commercial commitments and sanctions, it added.

Family-controlled LDC is one of the world’s largest traders of agricultural commodities such as wheat, sugar and cotton.
Source: Reuters (Reporting by Gus Trompiz; Editing by Sudip Kar-Gupta and Clarence Fernandez)