September 28, 2017 / 11:45 AM / a year ago

Commodity trader Louis Dreyfus sees better signs as H1 profits rise

* Group says first-half net, operating profits rose

* Sales boosted by higher volumes

* CEO sees “renewed optimism” after tough period

PARIS, Sept 28 (Reuters) - Global commodity trading company Louis Dreyfus posted higher first-half profits, halting a two-year slide in core earnings, and saw signs of recovery for its businesses that have been impacted by a high supply of staple crops.

However, it said profits remained low at its grains division while its sugar business was affected by tough market conditions.

Louis Dreyfus said on Thursday that group net profit for the first half of 2017 rose to $160 million from $135 million a year ago, while its segment operating profits also rose to $602 million, from $546 million last year.

Net sales advanced 18 percent to $27.7 billion, supported by an 8 percent rise in volumes that reflected the release of inventory from 2016, it added.

“We are starting to see renewed optimism, most notably in Europe, but still recognise the need for flexibility to adjust our geographic and operational footprint,” chief executive Gonzalo Ramirez Martiarena said in a statement.

Along with its peers, Louis Dreyfus has been reorganising in response to a period of high supply and reduced price volatility, that have eroded margins for buying, selling and shipping agricultural goods.

In April, Louis Dreyfus reported lower core profits for the second year in a row, but said it expected restructuring to help its results in 2017.

Louis Dreyfus plans to sell stakes in several non-core businesses and its holding company is to wind down the activities of a separate asset management unit by the end of this year.

The group, which dates back to 1851 and is still privately held by the Louis-Dreyfus family, has also seen a series of changes in management and trading staff, most notably when its global head of grains David Ohayon resigned last month, together with several other traders in Europe.

Louis Dreyfus is part of the so-called ‘ABCD’ quartet of global grain trading giants, which also includes Archer Daniels Midland, Bunge Ltd and Cargill.

On Wednesday, Cargill reported a 14 percent rise in quarterly profit. (Reporting by Gus Trompiz; Editing by Sudip Kar-Gupta)

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