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News 1832 views last update:14 Jan 2016

Cargill reports positive 4Q 2013 earnings

Cargill has reported net earnings of US$483 million (€361 million) for the fourth quarter of the fiscal 2013 ending May 31, up substantially from US$73 million (€54 million) in the same period last year. Fourth-quarter revenues were US$35.4 billion, a 4% increase from US$34 billion (€25 million) in the same period last year.

The company report full fiscal year earnings of US$2.31 billion, nearly double the $1.17 billion realised in the prior year. Revenues totalled $136.7 billion, up 2% from last year’s $133.9 billion. Cash flow from operations was $4.18 billion, a 19% increase from $3.51 billion in fiscal 2012. 

“Cargill’s earnings improved significantly over the prior year,” said Greg Page, Cargill chairman and chief executive officer. “Nearly all of our business units were profitable, and more than two-thirds exceeded year-ago results. We did a better job of delivering innovations and solutions that help our customers succeed. We also drew on our sourcing, logistical and risk management skills to navigate volatile commodity markets in the first half that were driven by severe weather.”

Cargill currently has $2.6 billion of major agricultural, food and energy projects under construction, near completion or recently opened in 14 countries around the world. These include a poultry further-processing plant in Efremov, Russia; an integrated poultry production and processing complex in China’s Anhui province; additional poultry processing capacity in Korat, Thailand; an animal nutrition facility in South Korea; a corn processing plant in Brazil’s southern state of Paraná; a cocoa processing plant in Indonesia’s East Java province; and, in the United States, the establishment of a biorefinery campus in Fort Dodge, Iowa, and the modernization and expansion of a multiseed processing plant in North Dakota.

Origination and processing segment
Among Cargill’s five business segments, the origination and processing segment was the largest contributor to consolidated earnings in both the fourth quarter and full year. Results were up considerably from the prior year, with improved performance in grains and oilseeds in most geographies. The segment drew on Cargill’s global footprint and strengths in market analysis, logistics and risk management to overcome the supply challenges caused by weather disruptions  and tight stocks, serving customers reliably. The segment also realized turnarounds in cotton and sugar from the prior year.

The food ingredients and applications segment also was a significant contributor to company results in both periods. Combined earnings among the segment’s animal protein businesses were down from last year, chiefly due to the negative impacts of drought, high feed costs and, in the United States, the tightest cattle supply in 60 years.

Agriculture
The agriculture services segment posted improved results for the quarter and the year. The integration of Provimi, acquired last year, accelerated earnings growth in global animal nutrition. The combined expertise in nutrition, premixes and compound feeds made it possible to reach more customers with solutions that helped them address difficult feeding economics. Results in North American farm services lagged the prior year in both periods, largely due to drought-affected, smaller crops. The cold, wet spring in the U.S. Midwest, which delayed plantings and input purchases, also hampered results.

Earnings in the risk management and financial segment rose considerably from the prior year. The company’s asset management subsidiaries posted an improved performance, but energy results declined.

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