Cargill earnings down 66% on global economic turmoil
The Minneapolis-based agribusiness giant said that its profits from continuing operations for the quarter to August 31 were down 66% compared to the prior year period, from $693m in the first quarter of 2011 to $236m this year. The figures don't include results from Cargill's recently divested majority stake in feed and fertilizer firm The Mosaic Company.
Meanwhile, revenues were up 34% to $34.6bn.
“It was a tough quarter. With results down from recent levels, we’re focused on regaining our earnings momentum,” said Cargill chairman and CEO Greg Page.
As a private company, Cargill does not publish its full financial results, nor give a detailed breakdown of performance across its five business divisions, but it said in a statement that earnings for its food ingredients and applications segment nearly matched last year’s record-high performance, although its animal protein businesses were hit by higher livestock and feed costs on lower domestic demand.
For other business divisions, the company said that earnings rose in agricultural services, especially in the lead-up to the North American harvest; its origination and processing segment was negatively affected due to “the combination of adverse weather, reductions in projected grain supplies and the weakening world economy”; its risk management and financial segment was negatively impacted by global financial market turmoil; and its industrial earnings were down on lower seasonal demand.
Page added that the company’s lower profits were largely due to global economic uncertainty, which led to turbulence in commodity markets and fewer opportunities for ‘prudent trading’.
This is the second consecutive quarter in which the company has reported tighter margins. In the fourth quarter of 2011 it reported a 35% boost in earnings compared to the previous year, although profits were down 7%.
