Crop merchant Louis Dreyfus posts drop in annual profit

PARIS (Reuters) - Louis Dreyfus Company on Wednesday reported a drop in core annual profit, the latest global crop merchant to see earnings curbed by lower prices and ample supplies.

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 last year against $2.22 billion in 2023. 

Net sales were stable at $50.6 billion, supported by a 17.4% rise in volumes.

LDC cited a resilient performance "despite new and ongoing geopolitical and climate-related challenges throughout the year".

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 full-scale invasion of Ukraine in 2022.

ADM and Bunge both reported lower fourth-quarter earnings, citing weak oilseed crush margins and uncertainty over U.S. biofuel policy.

Crop traders also face ructions in international trade as U.S. President Donald Trump pushes tariffs as an economic and diplomatic tool.

LDC, which handles farm goods from sugar to cotton, 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 pulses unit.

The group said it increased capital expenditure sharply last year to $1 billion from $636 million in 2023.

(Reporting by Gus Trompiz)