| PARIS, April 3
PARIS, April 3 Louis Dreyfus' core
earnings fell further last year as the global agricultural
commodity trader again faced pressure from an abundant supply of
Large inventories, low prices and limited volatility have
curbed margins in the past two years for companies such as Louis
Dreyfus that buy, transport and process crops like wheat,
soybeans and rice.
The privately owned company said 2016 core operating profits
for its business segments fell to $1.2 billion from $1.4 billion
in 2015, marking a second successive annual drop.
Net sales fell to $49.8 billion from $55.7 billion in 2015,
while shipped volumes were stable at 81 million tonnes, Louis
Dreyfus said in a statement on Monday.
Net income, however, rose to $305 million from $211 million,
supported by favourable tax effects.
"Oversupply, market shocks, geopolitical dynamics and
adverse weather conditions were some of the difficulties that
the agribusiness industry had to face during 2016," said Chief
Executive Officer Gonzalo Ramirez Martiarena.
"Market fundamentals are unlikely to be very different in
2017, so our agility in adapting to changing market conditions
will remain critical," he said.
Dreyfus is part of the so-called 'ABCD' quartet of trading
giants alongside Archer Daniels Midland, Bunge
and Cargill, that dominate global flows of
Like its peers, Dreyfus has been reorganising its activities
and last year set out plans to seek partners to invest in its
fertiliser, metals, juice and dairy businesses.
Dreyfus has also reined in capital investments, which last
year fell to $354 million from $420 million in 2015, to help
weather tougher trading conditions.
The group expected the effects of its restructuring to start
showing through in its results from next year, Ramirez said.
Rivals such as ADM and Cargill have also seen earnings from
trading activities decline, although better performances at
other units have helped boost their group profits in recent
Louis Dreyfus is controlled by Margarita Louis-Dreyfus, who
also chairs the company's board.
(Reporting by Gus Trompiz; Editing by Sudip Kar-Gupta)