Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Billionaire Louis-Dreyfus Takes Big Dividend From Commodities Trader

Published 28/09/2020, 10:43
Updated 28/09/2020, 15:09
© Reuters.

© Reuters.

(Bloomberg) -- Margarita Louis-Dreyfus took another hefty dividend from the eponymous agricultural-commodity trading house she controls, as the billionaire continues to squeeze the business for cash.

During the first six months of the year, Louis Dreyfus Co. paid a dividend of $302 million. The payout related to last year’s profit, the sale of several assets in Canada and its former metals-trading business, according to the company’s interim financial statement. The dividend reduced the company’s equity to $4.48 billion at the end of June, down from $4.79 billion six months earlier.

Louis-Dreyfus, who controls more than 96% of the holding company that owns LDC, has been taking big dividends over the past few years to help repay about $1 billion she borrowed to buy out other family members. The payouts, often surpassing the trading house’s profit, have steadily reduced the company’s value.

The billionaire owner has been in talks to sell a minority stake in the company, recently holding negotiations with Abu Dhabi sovereign wealth fund ADQ. A successful deal would give the trading house an injection of much-needed cash.

On top of its owner’s troubles, the company has struggled over recent years, amid frequent management changes and declining earnings. Veteran Michael Gelchie will become chief executive officer later this week -- the seventh CEO appointed by Dreyfus in eight years -- replacing Ian McIntosh.

Despite its recent travails, the first half of 2020 showed some improvement for LDC. Net income climbed 77% to $126 million from a year earlier, despite significant losses from the collapse of Luckin Coffee (OTC:LKNCY) Inc. Net sales decreased to $16.3 billion, as both prices and volumes shipped fell year-on-year.

“The results reported today put LDC in a strong position from which to advance its ambitious growth plans,” said Gelchie.

Net debt fell to $6.7 billion at the end of June, from $6.9 billion at the end of 2019, reducing its adjusted leverage ratio to 2.8 times.

Dreyfus is the D in the vaunted “ABCD” group that dominates the world of agricultural commodities trading. The others are Archer-Daniels-Midland Co., Bunge (NYSE:BG) Ltd. and Cargill Inc.

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.