Louis Dreyfus Sales Climb 16% With Boost From Grains to Oilseeds

Sept. 30 (Bloomberg) — Louis Dreyfus Commodities BV, the world’s largest rice and raw-cotton trader, said first-half sales climbed 16 percent, boosted by grains and oilseeds and a significant increase in metals shipments.

Sales rose to $33.7 billion in the six months to June 30, while net income was little changed at $260 million, the Rotterdam-based company said late yesterday on its website. Higher tax and a loss on investments crimped profit.

“Price and volatility levels have been affected by substantial inventories for most of the platforms and fast growing supply, especially for oilseeds and grains,” Claude Ehlinger, the company’s interim chief executive officer and chief financial officer, said in a statement.

Billionaire Margarita Louis-Dreyfus, who controls the 163- year-old company through a family trust, is overhauling the firm’s management and corporate governance to prepare for a possible stake sale or initial public offering. One of the world’s four largest agricultural commodity traders, Louis Dreyfus is expected to appoint a new CEO by the end of the year after Ehlinger took over on an interim basis in April.

Shipped volumes rose 6 percent during the period and profit before tax increased 10 percent to $315 million. Conflict in Ukraine and the Black Sea region and weather-related uncertainties affected prices and volatility “only periodically,” while demand has been resilient, Ehlinger said.

Record Inventories

Louis Dreyfus said most of the commodities it trades, with the exception of coffee, reached or are projected to hit near- record inventory levels. A drought in Brazil propelled Arabica prices to a three-year high and Louis Dreyfus benefited from “a highly volatile environment,” the company said.

Louis Dreyfus also trades and processes juice and sugar, accounting for about 10 percent of global agricultural commodity flows. With its major operations in Geneva, it also trades and stores metals and operates a commodity-focused hedge fund.

The firm has operations in more than 100 countries and owns storage facilities in the Americas, Asia, the Middle East and Africa, as well as Europe and the Black Sea, which is its largest trading hub.

First-half capital expenditure was $315 million. The company plans to spend about $4 billion to double its holdings of physical assets over the next four years. The port it’s developing on the Azov Sea is due to begin operations in 2015. Last year it formed a joint venture with Brooklyn Kiev LLC to develop and manage a multi-commodity terminal at the Black Sea port of Odessa.

Asset Sale

The company sold its interest in an Asian palm-oil joint venture with Green Eagle Resources in July, which should contribute about $100 million to net income in the second half, Louis Dreyfus said.

As part of its governance overhaul, Louis Dreyfus appointed three new directors to its supervisory board in April, including Michel Demare, the non-executive chairman of seed and herbicide producer Syngenta AG.

To contact the reporter on this story: Andy Hoffman in Geneva at [e-mail] To contact the editors responsible for this story: Will Kennedy at [e-mail] Dylan Griffiths