The agri-foods giant saw earnings of $326m in the quarter ended February 28, down 68 per cent on the same period of last year. Although on paper its nine month earnings are 4 per cent up on last year, at $3.01bn, when its majority investment in potash and phosphate firm The Mosaic Company is excluded it is down for that period, too.
As a private company, Cargill does not release its full financial statement nor give a breakdown of performance between divisions. However it has said that all five of the business segments have been touched by decreased earnings – although the picture is somewhat mixed.
“Many businesses experienced weaker demand and lower sales volumes, as well as fewer trading opportunities as markets fluctuated within narrower ranges,” said the company statement.
However a spokesperson told FoodNavigator-USA.com: “Cargill expects to remain profitable. Our balance sheet is strong.”
It seems that the company hunkered down in the face of downturn early on, reading the signs and taking early action. That, according to chairman and CEO Greg Page, puts it in a strong position to respond when markets are looking rosy once more.
“When conditions reversed course in mid-2008, we began preparing for tougher times again,” he said. “We cut expenses, decreased debt and curtailed nonbase capital spending, but we kept the focus on our customers who need a strong, reliable partner to help them provide more value to the customers they serve.”
In addition, Cargill was cautions about the acquisitions opportunities that presented themselves in 2007 and 2008, especially as asking prices were “heady”.
“We were mindful in our trading of early signs the economy might be heading for a downturn,” said the spokesperson.
Page added that Cargill is encouraged by efforts to stabilize markets around the world and revive growth.