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Strong supplies of agricultural commodities and price volatility led to a fall in 2016 sales at commodities trading house Louis Dreyfus Company, although net profits rose on tax gains.
LDC, which competes with Archer Daniels Midland, Bunge and Cargill in agricultural resource, said earnings rose 45 per cent to $305m on a 11 per cent decline in net sales to $49.8bn and 12 per cent fall in pre-tax profits to $365m.
Gonzalo Ramírez Martiarena, LDC chief executive, said: “Oversupply, market shocks, geopolitical dynamics and adverse weather conditions were some of the difficulties that the agribusiness industry had to face during 2016.”
The company’s “value chain” unit, which includes trading of grains, oilseeds and sugar, “posted decent logistics and processing margins” said the company, while its “merchandising” segment benefited from a strong contribution from its metals business.
LDC is seeking to sell a stake in its metals unit as part of a wider strategic shift at the parent company, which is controlled by Margarita Louis-Dreyfus, a Russia-born billionaire.