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333869

UPDATE 2-Crop merchant Louis Dreyfus' profits rise as it navigates Ukraine crisis

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Louis Dreyfus first-half net profit almost doubles to $662 mln

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Higher prices, volumes boost results as Ukraine war jolts market

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Group says Russia, Ukraine small part of global crop sourcing

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By Gus Trompiz

PARIS, Sept 22 (Reuters) - Global crop merchant Louis Dreyfus Company (LDC) reported higher first-half sales and profits, saying it had used its wider supply network to adapt to disruptions linked to the Ukraine war to boost volumes and benefit from higher prices.

LDC, whose rivals include ADM, Bunge and Cargill, said net sales for the six months ending June 30 rose to $30.3 billion from $24 billion a year earlier, while net income rose to $662 million from $336 million.

International crop traders' earnings have been boosted by high prices and tight supplies, with market tension heightened by Russia's Feb. 24 invasion of Ukraine.

"Despite very limited origination possibilities from the Black Sea, we nevertheless grew volumes shipped in the first half of the year," Chief Executive Michael Gelchie said in an interim report on Thursday.

Rising sales reflected a 0.9% year-on-year increase in volumes and higher prices, LDC said in the report.

Like other foreign grain firms, LDC scaled back operations in Ukraine and Russia this year due to the war. Products sourced from two countries made up less than 4% of its sales last year.

In Ukraine operations continue at a reduced level, LDC said. It reported provisions and impairments of $118 million for Ukraine within its cost of sales as of June 30.

No war casualties had been reported among employees in Ukraine, though wheat inventories in a third-party silo were destroyed, it said.

For Russia, the group had resumed operations to the extent made possible by commercial commitments and sanctions, it added.

Family-controlled LDC is one of the world's largest traders of agricultural commodities.

Improved results and the sale of a stake last year to Abu Dhabi holding firm ADQ have eased financial pressure on LDC and main shareholder Margarita Louis-Dreyfus after several years of modest profits and mounting debt.

The group awarded a dividend of $348 million during the first half, the report showed. (Reporting by Gus Trompiz; Editing by Sudip Kar-Gupta, Clarence Fernandez and Jan Harvey)

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