Cargill has reported net earnings of US$571 million in the fiscal 2014 first quarter, down 41% from last year’s record quarter of $975 million. However, Greg Page, Cargill’s Chairman and CEO, noted that nearly three-fourths of its business units recorded profits
First-quarter revenues of $33.8 billion matched the year-ago period.
Global animal nutrition exceeded last year’s profits
Earnings rose slightly in the Animal nutrition & protein segment in the first quarter. Global animal nutrition results exceeded last year’s profits, due in part to margin improvements. US beef processing operations benefited from increased slaughter plant efficiencies.
Origination & Processing biggest earner
Although results were down from last year, the Origination & Processing segment was the largest contributor to Cargill’s first-quarter results. Supported by strong global analytics, sourcing, logistics and risk management, the segment successfully navigated the uncertainty surrounding crop production in the northern hemisphere, including weather gyrations in North America. The segment’s South American-based supply chains performed well, utilizing the region’s big crops to serve strong export demand. Conversely, in North American farm services, the remaining impact of last year’s severe drought in the US Midwest reduced grain handling opportunities in the first quarter.
Food ingredients & applications down
Food Ingredients & Applications earnings decreased moderately from last year’s record first quarter. Segment businesses closely managed the purchase and delivery of raw materials to processing facilities, which decreased the supply chain risks presented by choppy markets and provided for assured supplies to customers. The segment was the second largest contributor to company earnings.
Industrial & financial services significantly down
Results in Industrial & Financial Services were down significantly from last year’s strong first quarter. The segment’s energy businesses posted a weak performance due to the combined effects of mild weather, soft demand and low market volatility. Backed by strong analytics, results in steel and iron ore markets were solid, though somewhat below last year’s first quarter. Asset management results softened, largely due to rising economic pressures in emerging markets.
The company’s bid to buy Joe White Maltings in Australia was accepted. The acquisition, which is subject to regulatory approval, is expected to be completed prior to the end of 2013. Cargill also purchased full ownership of the Prairie Malt joint venture in Saskatchewan. Lastly, it acquired a shrimp feed manufacturer in Thailand; the country and the region is a major centre for shrimp production.
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