ADM expects to correct past financial statements in delayed annual report
By Karl Plume
CHICAGO (Reuters) -Grain trader Archer-Daniels-Midland expects to correct certain intersegment sales in its consolidated financial statements because they were not recorded at approximate market value, the company said in a U.S. Securities and Exchange Commission (SEC) filing on Friday.
ADM, which is currently under government investigation for accounting practices in its Nutrition segment, alerted investors that it missed its 2023 annual report filing deadline but that it aims to release it by March 15.
In January, the company cut its 2023 profit forecast, pulled forward-looking guidance for Nutrition, announced an internal investigation and put finance chief Vikram Luthar on administrative leave. The announcement sent shares of the 122-year-old grains merchant plunging by the most since 1929.
The corrections to its financial statements are not expected to impact consolidated balance sheets, statements of earnings, income or cash flows because the intersegment sales in question occurred between company segments, ADM said on Friday.
But the company said it expects to reveal a "material weakness" in how it reports intersegment sales and is working on a plan to "remediate" that issue. ADM will provide further details in the annual report, it said.
ADM shares were up 2.4% at $54.37 on Friday afternoon after earlier touching a one-month high, but remained some 20% below levels seen before news broke of the accounting probe.
The internal accounting probe, made in response to an SEC inquiry, brought uncertainty to ADM's high-margin Nutrition segment.
The unit supplies ingredients, including plant-based proteins, natural flavors and emulsifiers to food, beverage and nutritional supplements industries, among others.
The U.S. Justice Department is also probing accounting practices at ADM, two people with direct knowledge of the matter said last month.
ADM expects net earnings attributable to controlling interests to decline for 2023, compared with 2022.
(Additional reporting by Arunima Kumar and Sourasis Bose in Bengaluru; Editing by Arun Koyyur, Anil D'Silva and Aurora Ellis)
