ADM expects to disclose material weakness in annual report
(Reuters) -Grain trader Archer-Daniels-Midland said on Friday it was expecting to report material weakness in the internal control over financial reporting in its annual report, which it aims to file by March 15.
The company's finance chief Vikram Luthar was placed on administrative leave in January amid a probe over its accounting practices at its Nutrition unit. It had also delayed reporting its fourth-quarter results.
ADM said it was working on a plan to address the weakness related to its accounting practices and procedures for intersegment sales.
The company does not anticipate an impact to its consolidated balance sheets, earnings statements, or cash flow, it said.
Shares of the company rose 2.6% in trading before the bell, after briefly falling 2%.
The probe has brought more uncertainty to ADM's high-margin Nutrition unit, which was under pressure due to weak demand for meat alternatives and other products as well as downtime at a large soy processing facility.
The unit supplies ingredients including plant-based proteins, natural flavors and emulsifiers to food, beverage and nutritional supplements industries, among others.
According to a company's staff memo seen by Reuters last month, ADM had also delayed paying performance bonuses to some executives until its financial statements were completed and audited.
The company also expects net earnings attributable to controlling interests to decline for 2023, compared with 2022.
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