(Adds details from earnings report, company comment, market
NEW YORK/CHICAGO Aug 5 Agribusiness company
Archer Daniels Midland Co expects to sell its global
chocolate business by the end of the third quarter, its
president said on Tuesday, after opting to hold onto its larger
cocoa press business.
"We expect to have signed agreement by the end of the third
quarter to sell our global chocolate business," said ADM
President Juan Luciano on a conference call with analysts to
discuss the Illinois-based company's second-quarter report.
The company reported higher-than-expected earnings of $533
million, or 81 cents per share, up from $223 million, or 34
cents a share a year earlier, citing strong U.S. exports and
demand for ethanol.
ADM is one of the world's top three cocoa dealers. In April,
the company said it would keep its cocoa presses, which make up
about two-thirds of its cocoa business, but still sell its
chocolate business after long-running negotiations to sell both
operations to a buyer collapsed.
ADM has about six chocolate facilities, the company
ADM's processing of cocoa and other unspecified commodities
made its second-straight quarterly profit at $20 million, up
from a loss of $17 million in the year-ago period.
"In cocoa, the margin environment remained good," Luciano
The company took a $1 million charge related to its cocoa
hedges, its second straight quarterly hedging loss, versus a
gain of $11 million in the second quarter of 2013. This comes as
cocoa futures prices soared to three-year highs around
$3,150 per tonne.
Strong demand for cocoa butter, a main byproduct of the bean
that gives chocolate its melt-in-the-mouth texture, caused its
ratio to soar. Meanwhile, demand for cocoa powder, which is used
in baked goods, chocolate drinks and ice cream, is weak and
caused its price to tumble.
(Reporting by Marcy Nicholson in New York and Tom Polansek in
Chicago; Editing by Jeffrey Benkoe and Nick Zieminski)