Dreyfus posts profit rise in challenging market

Paris | Reuters — French commodities trader Louis Dreyfus reported a rise of almost four per cent in annual net profit on Wednesday buoyed by higher volumes but cautioned that industry challenges persist.

Like its rivals, Dreyfus has faced lower margins linked to large inventories, low prices and reduced price volatility, prompting it to spin off some businesses.

“Ongoing industry challenges continue to prevail, but 2017 results remained sound,” CEO Gonzalo Ramirez Martiarena said in a statement.

The privately owned company, controlled by Margarita Louis-Dreyfus, said its group share net income rose to $317 million from $305 million (all figures US$).

Sales rose to $43 billion from $40.6 billion excluding its discontinued metals operations. Shipped volumes rose five per cent to 81 million tonnes.

Louis Dreyfus in December agreed to sell its metals business to China’s NCCL Natural Resources Investment Fund.

Sales were fueled by higher volumes in oilseeds and strong activity across the grains, freight and rice platform. Higher cotton and coffee prices also helped, it said.

The company also noted it had seen improved crushing and logistics margins.

Ramirez said the sale of part of its fertilizers operations and its whole metals business would fund investment aimed at growth.

“These sales will enable us to invest in and continue to build on the success of our core activities. Our investment focus will therefore remain predominantly on expanding our capacity and on adopting technological advancements that will improve efficiency and sustainability,” he said.

Louis Dreyfus is the “D” of the so-called ABCD quartet of top agricultural trading houses alongside Archer Daniels Midland , Bunge and Cargill.

— Reporting for Reuters by Sybille de La Hamaide in Paris.

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