Company update: Cargill Inc.
Cargill Inc.’s profits more than doubled during its fourth quarter, as the Minnetonka-based agribusiness giant saw strong performances in its agricultural services and financial services operations.
The company reported Q4 earnings of $691 million, compared to $327 million a year ago. Not including Cargill’s 64% stake in fertilizer maker Mosaic Co., its fourth quarter earnings would have been $433 million. Revenue rose 11% to $28.1 billion for the quarter ended May 31.
For its fiscal year, Cargill earned $2.6 billion, down 22% from the previous year. However, excluding publicly traded Mosaic, Cargill’s earnings rose 14%. Revenue fell 6% for the year to $107.9 billion.
"It was a good year and we came through in a tough economic environment," said David MacLennan, Cargill’s chief financial officer.
Looking ahead, MacLennan said he’s optimistic, particularly about opportunities in emerging markets, which were not as severely hurt by the global financial crisis as developed countries.
Global spread
Cargill is one of the world’s largest privately held companies with a vast array of holdings — from grain trading to food additives to salt. In its last fiscal year, about 40 of the company’s 70 business units delivered earnings increases.
Cargill is one of the world’s largest privately held companies with a vast array of holdings — from grain trading to food additives to salt. In its last fiscal year, about 40 of the company’s 70 business units delivered earnings increases.
Those 70 business units are spread out over five major segments. In the food ingredients and applications operation, traditionally Cargill’s largest segment by sales, earnings were up moderately during the fourth quarter and up significantly for the year.
Animal feed
The company’s agricultural services segment, which includes animal feed and services to farmers, posted significant earnings increases for both the fourth quarter and the year.
The company’s agricultural services segment, which includes animal feed and services to farmers, posted significant earnings increases for both the fourth quarter and the year.
Meanwhile, Cargill said its risk management and financial services segment generated solid profits for the fourth quarter and for the year, after losing money the previous year due to the global financial meltdown.
Processing down
However, Cargill’s origination and processing segment saw a decline in year-over-year earnings. That segment processes agricultural commodities such as oil seeds and includes the company’s global grain-trading operations.
However, Cargill’s origination and processing segment saw a decline in year-over-year earnings. That segment processes agricultural commodities such as oil seeds and includes the company’s global grain-trading operations.
During the past year, Cargill built or expanded 17 major facilities worldwide and has 15 more projects underway, which together represent more than $1.1 billion in investments.
Projects last year included doubling the capacity of Cargill’s canola facilities in Saskatchewan, expanding its starches and sweeteners plant in Brazil and doubling the capacity of its malt operation in Argentina.
