Cargill profits jump 62 percent despite ingredients drop
The privately owned, Minnesota-based agricultural and ingredients notched earnings of $1.49bn in the quarter ended August 31 – up 62 percent from $917 million in the same period a year ago. Its previous quarter earnings were $744m.
“The increase in first-quarter earnings was led by the industrial segment, which reflected continued demand for crop nutrients in response to the world’s increased need for higher crop yields,” Cargill said in a statement.
But despite the healthy numbers, its food ingredients and applications division was less profitable, due, the company said, to higher raw material and energy costs.
It also had to cope with the temporary closure of its corn processing facility in Cedar Rapids, Iowa, due to summer flooding. The plant, which produces corn syrup, specialty food and industrial starches for its North American clients, has been rebuilt and is expected to be fully functional in November.
Cargill’s agricultural services division also reported lower earnings “largely due to asset sales that occurred in last year’s first quarter.”
Its risk management and financial services portfolio also saw drops.
“Cargill realized a strong start to our new fiscal year in a continuing environment of outsized volatility in agricultural and energy markets and severe turbulence in financial markets,” said Cargill chairman and chief executive officer, Greg Page.
“Our team’s attention to measuring and managing risk, and exercising fiscal discipline allowed the company to respond to supply-and-demand fundamentals in fast-moving markets.”
Cargill’s results were boosted by its investment in the fertilizer industry through its holdings in The Mosaic Company.
Cargill has had a busy year so far, opening several new facilities, including an addition to its ethanol production capacity at its Nebraskan corn processing complex.
Cargill also made its version of stevia, Truvia, available commercially this year.
Cargill’s quarterly rise follows the $3.95bn it made in the 2008 financial year – itself a 55 percent hike on its earnings of 2007.
This return came despite what the private company called “the most volatile agricultural and energy markets in decades”.
Cargill is an international provider of food, agricultural and risk management products and services. It has 160,000 employees in 67 countries.
