(Adds detail on Russia and Ukraine)
PARIS, March 24 (Reuters) - Louis Dreyfus Company (LDC) on Thursday reported a jump in annual profit, the latest crop merchant to show a boost in earnings as economic activity recovered from the COVID-19 pandemic.
LDC warned that the conflict between Russia and Ukraine, both major grain producers, and related trade restrictions could have a “material impact” on its operations locally, without giving a more specific financial outlook for this year.
Group net profit reached $697 million in 2021, up 82.5% from the previous year, while earnings before interest, tax, depreciation and amortisation (EBITDA) rose 22.6% to $1.623 billion, LDC said.
The family-controlled firm is one of the world’s largest traders and processors of agricultural commodities such as wheat, sugar and cotton. Rivals ADM and Bunge have also shown sharp increases in earnings.
Among its products, its grain and oilseed unit achieved “outstanding operating results”, helped by Chinese demand, attractive crushing margins and higher ethanol prices, LDC said in an annual report.
Following Russia’s invasion of Ukraine a month ago, which led to the closure of Ukrainian ports and Western sanctions against Moscow, LDC has suspended operations in both countries.
In Russia, LDC notably operates a grain export terminal near the Azov Sea, while in Ukraine its operations include a terminal at Odesa port.
The group had assets of $57 million and liabilities of $18 million in Russia as of Dec. 31, 2021, along with $289 million and $216 million in assets and liabilities in Ukraine, it said, adding grains sourced in the two countries represented less than 4% of 2021 group sales.
The war furthermore “adds uncertainty” to a long-delayed project to develop a grain export terminal at the Black Sea Russian port of Taman, LDC said.
Improved results and the sale of a stake last year to Abu Dhabi holding firm ADQ have eased financial pressure on LDC and main shareholder Margarita Louis-Dreyfus.
The group’s adjusted net debt fell to $1.5 billion by the end of 2021, from $2.4 billion a year earlier, while group equity reached its highest-ever level of $5.4 billion, LDC said. (Reporting by Gus Trompiz; Editing by David Goodman, Clarence Fernandez and Andrea Ricci)
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