'Cargill remains a private company'
Cargill Inc. starts the new fiscal year with a very strong balance sheet after paying down debt following the sale of its majority stake in Mosaic Co. (MOS), Cargill's chief financial officer said.
The sale will give Cargill plenty of options as it looks for ways to bolster its standing as a diverse company able to manage a highly volatile commodity sector, CFO Sergio Rial said in an interview after the company announced fourth-quarter earnings
(revenue up 32%).
The company, whose diverse businesses range from grain merchandising to meat processing to energy trading, invested more than $3 billion in acquisitions and expansions in the fiscal year ended May 31, which Rial said was a record.
He said the company's expansion plans would continue to focus on maintaining diverse interests, rather than focusing on specific geographic regions or businesses, although he added, "We'll have to see what the world brings to us."
Cargill completed its Mosaic transaction in late May. It distributed roughly 178 million Mosaic shares to Cargill shareholders and exchanged the remaining 107.5 million shares with Cargill debt holders.
The deal reduces Cargill's debt, Rial said, and will keep the company in private hands. "There are absolutely no plans for Cargill to go public," Rial said.
The company reported fourth-quarter earnings slipped 7% due to weaker results in its food ingredients business, particularly related to meat products, as well as losses in energy trading.
Rial said the energy losses were spread among several markets, including crude oil, natural gas and coal. "Volatility cuts both ways," he said.
Rial added that while the company does not yet have all of the facts related to its recent turkey recall
stemming from salmonella contamination, "the financial impact should not be material."
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