Vikram Luthar
Senior Vice President, Chief Financial Officer at Archer-Daniels-Midland
Thank you, Juan. Please turn to Slide 5. The Ag Services & Oilseeds team once again delivered solid results in an increasingly dynamic environment by leveraging our experience, scale and integrated global footprint. Ag Services results were lower than the strong third quarter of 2022. South American origination results were higher year-over-year as our team delivered significantly higher volumes and margins on strong export demand. Prior investments in port capabilities have enabled us to structurally grow our earnings while capitalizing on a stronger margin environment across the region. North American results were lower year-over-year as a result of the shift of export demand to Brazil due to the large crop there, as well as low water levels in the U.S. river system limiting volume and barge capacity.
Effective risk management combined with higher volumes and margins in Global Trade led to strong results, however, much lower than the record quarter last year. The current quarter also included a $48 million insurance settlement related to damages from Hurricane Ida. In Crushing, we delivered another strong quarter, but lower than the prior year as global crush margins remain healthy, but lower than the very strong levels of a year ago. Our strong results were led by North America as the crush margin environment remains well supported by structurally higher demand for vegetable oils. We officially opened our new crush facility in Spiritwood, North Dakota to meet growing demand. We are currently in the commissioning process and expected to be running at full rates in early November, adding an additional 1.5 million metric tons of crush capacity per year.
In EMEA, we continue to optimize our flex capacity to prioritize crush of higher-margin softseeds, in line with market opportunities. In the quarter, there were large net positive mark-to-market timing effects, which were lower than the net positive impacts in the prior year quarter. Refined Products and Other posted another strong quarter, higher than the prior year period. Results were led by solid volumes and margins in North America. In EMEA, robust export demand for biodiesel and domestic demand for food oil drove higher results versus the prior year. In the quarter, there were large net positive mark-to-market timing effects, which are expected to reverse as contracts execute in future periods. Equity earnings from Wilmar were significantly lower versus the third quarter of 2022.
Looking ahead for the fourth quarter in Ag Services & Oilseeds, we anticipate strong results that are slightly lower than last year, excluding the $110 million legal settlement in the Ag Services sub-segment from the fourth quarter of 2022. We expect Ag Services results to be in line with the prior year excluding the legal settlement. We anticipate similar year-over-year North American export volumes, a competitive South American export program and continued strong performance from Global Trade. The forecast of Crushing sub-segment will deliver strong results similar to the prior year. We expect robust soy and canola crush margins and with the ramping of our Spiritwood operations, higher volumes. We expect RPO to perform well, but be significantly below last year as positive timing impacts from prior quarters are expected to reverse.
Slide 6, please. Carbohydrate Solutions delivered an outstanding quarter that was significantly higher than the prior year, enabled by the ongoing optimization of our production and supply chain network. The Starches and Sweeteners sub-segment were higher year-over-year on a healthy demand and strong margin environment across starches, sweeteners, wheat flour and ethanol. Our team generated new customer wins and delivered double-digit growth year-to-date in our BioSolutions platform. As Juan touched on earlier, we also signed a formal agreement with Broadwing Energy to provide lower emissions power to our Decatur facility, extending our ability to provide low-carbon solutions across the value chain. In the Vantage Corn Processors sub-segment, our team executed well in a strong ethanol demand and margin environment, leading to significantly higher year-over-year results.
Looking ahead for the fourth quarter, we expect steady demand and margins for our starches, sweeteners and wheat flour products. We remain constructive on ethanol margins, driven by solid domestic demand and healthy U.S. exports, supported by lower competing exports from Brazil due to higher sugar prices. We anticipate results to be similar to the prior year period but with upside potential if the current ethanol margin structure holds.
On Slide 7, in Nutrition, strong results in Flavors, Health & Wellness and recovery in the base Animal Nutrition business were more than offset by continued lower demand for plant-based proteins and persistent demand fulfillment challenges in Pet Solutions. Flavors reported impressive results in a complex operating environment, delivering a 29% growth in operating profit on a constant currency basis. Results were led by pricing actions in EMEA and strong win rates in North America. During the quarter, we also implemented a successful go-live of our One ADM project in the EMEA region across 18 locations in 12 countries. This represents a significant milestone as we continue to harness digital across the enterprise to drive productivity gains.
In Specialty Ingredients, weak market demand, particularly in the alternate meat category, inventory adjustments and unplanned downtime resulting from the recent Decatur incident led to significantly lower year-over-year results. The plant-based protein market has been experiencing destocking and consumer demand softness over the course of the year that will likely persist into next year. Given these recent market dynamics, we have re-scoped our Decatur protein modernization investment project to better match the expected lower growth demand environment. Also, we are leveraging our expertise in creation, design and development to differentiate our product offerings to serve evolving consumer needs. These adjustments will enable a faster pivot to higher growth and more resilient categories such as Specialized Nutrition, which have synergies across the Nutrition portfolio, and we are rapidly building this revenue pipeline. Health & Wellness results were higher year-over-year due to double-digit biotic [Phonetic] sales and a favorable impact related to the revised commercial agreement with Spiber. During the quarter, we realized a significant expansion in our revenue pipeline reinforcing the demand for evidence-based solutions.
In Animal Nutrition, we are beginning to see the cost optimization actions and the expansion of offerings in the specialty feed and ingredient space from earlier this year, driving improved performance. However, the recovery in the base business was more than offset by normalized year-over-year amino acids margins as well as lower profit contribution from the Pet Solutions business. Looking forward, we anticipate Flavors to finish the year strong, driven by growth in EMEA and North America. Health & Wellness operating profit is expected to finish similar to last year. Animal Nutrition operating profit is expected to continue to recover sequentially quarter-over-quarter. Specialty Ingredients operating profit is expected to be down significantly, impacted by the recent Decatur East incident and demand softness.
All in, we now expect full year 2023 operating profit for Nutrition to be around $600 million. While our results in 2023 have been below our expectations, we expect Nutrition to return to growth in 2024. We will continue to build on the Flavors momentum from 2023. Health & Wellness should maintain its steady performance. The cost actions and the sharper pivot to higher-margin products will enable Animal Nutrition to drive growth, further reinforced by improved go-to-market capabilities. Lastly, for SI, we will work aggressively to restart operational capabilities at Decatur East to minimize the impact in 2024.
Slide 8, please. Other business results were significantly higher than the prior year quarter due to improved ADM Investor Services earnings on higher net interest income. Captive insurance results were slightly lower on higher claim settlements partially offset by premiums from new programs. In Corporate results, net interest expense for the quarter increased year-over-year, primarily on higher short-term interest rates. Unallocated corporate costs of $298 million were higher versus the prior year on higher global technology spend to support our digital transformation efforts. Other corporate was favorable versus the prior year, primarily due to foreign currency hedges. We still forecast corporate cost to be approximately $1.5 billion for the year. The effective tax rate for the third quarter of 2023 was approximately 20%, higher than the prior year primarily due to a change in the geographic mix of earnings. For the full year, we still expect our effective tax rate to be between 16% and 19%.
Next slide, please. Through the third quarter, we had strong operating cash flows before working capital of $3.8 billion. We continue to invest in the business, allocating $1.1 billion to capital expenditures and have returned $1.9 billion to shareholders through share repurchases and dividends. We have ample liquidity with over $13 billion of cash and available credit, and our balance sheet is very strong with an adjusted net debt-to-EBITDA leverage ratio of 0.9x. Our fortress balance sheet gives us the financial flexibility to drive our long-term strategic agenda while also returning capital to shareholders and is also a competitive advantage, particularly in a higher-for-longer interest rate environment. We have completed $1.1 billion of share repurchases through Q3 and expect to increase the pace of repurchases in Q4. Even with the softness in Nutrition and lower-than-expected profit contributions from Wilmar, we are raising our 2023 earnings outlook again and now anticipate full year EPS in excess of $7 per share.
Juan?
