PARIS, Sept 29 (Reuters) - Agricultural trading group Louis Dreyfus Company B.V. managed to eke out a small increase in net profit in the first half of 2016 despite “erratic” market conditions and a tough economic backdrop taking their toll on sales.
Louis Dreyfus, one of the traditional big four agricultural commodity traders, has been grappling with a period of ample supply, lower prices and slower economic growth that have cut margins, while also going through a leadership shake-up under main shareholder Margarita Louis-Dreyfus.
The company said on Thursday that net income was $135 million compared with $130 million in the first half of 2015, while operating profit for its business segments fell to $546 million from $638 million as net sales dropped to $23.5 billion from $26.4 billion.
Unexpected capital inflows in commodities in the second quarter added to the difficult trading conditions, it added.
“Posting reasonable results during such periods and a context of continued oversupply illustrates our ability to adjust to changing conditions,” Chief Executive Officer Gonzalo Ramirez Martiarena said in an interim results report.
Louis Dreyfus is the “D” of the so-called ABCD quartet of trading giants, alongside Archer Daniels Midland, Bunge and Cargill, that collect, process and export crops around the world.
The unfavourable landscape for commodity traders has led companies to restructure some activities.
Louis Dreyfus said its shipped volumes increased 1 percent compared with the year-earlier period, supported by grain and oilseed exports from South America at its Value Chain segment and metals flows at its Merchandising segment.
Capital expenditure was $132 million, close to the $135 million level in the first half of 2015.
Dreyfus in March reported a plunge in net profit for 2015 and confirmed it was seeking partners to help some of its businesses expand, starting with its fertiliser division.
It did not give any update on partnerships in its first-half report.
Among its rivals, ADM said last month it was pulling back in ethanol and exploring sales of corn dry mills that produce the biofuel as weak ethanol results contributed to lower quarterly profits. (Editing by Alexander Smith)