Cargill 2Q earnings plunges 59%

Net earnings of Cargill has been reported at US$489 million in the fiscal 2010 second quarter ended November 30, down 59% from US$1.19 billion in the same period a year ago.

In the first six months, the company earned US$1.01 billion, a 62% decrease from last year's record first half of US$2.68 billion. Excluding earnings from its majority investment in The Mosaic Company, Cargill's results were more moderately below the year-ago level in both periods.

Cargill chairman and chief executive officer Greg Page said, "Performance was led by our food ingredients and agriculture services segments, both of which were up significantly from last year. With the global financial sector in recovery, we also realised much improved results in our risk management and financial segment."

Page noted Cargill's first-half earnings were considerably better than the last six months of fiscal 2009, with earnings up by more than 50% from the preceding six months.

Earnings in the origination and processing segment declined from the record level realised in last year's exceptionally volatile commodity markets. The industrial segment was down due to the sharp decline in earnings derived from Cargill's investment in The Mosaic Company.

During the second quarter, Cargill opened its sixth animal nutrition facility in Vietnam, which serves aquaculture producers in the Mekong Delta province of Dong Thap.

As announced December 10, the company has agreed to purchase food maker Goodman Fielder's commercial edible fats and oils business. The acquisition includes four refining facilities in Australia and New Zealand, which, along with Cargill's existing oilseeds refinery in Newcastle near Sydney, would provide it with national manufacturing and supply capabilities in both countries.

The sale includes a long-term agreement under which Cargill would supply refined fats and oils to Goodman Fielder. Cargill expects the acquisition to provide a platform for future growth in Australia and New Zealand, but the purchase is subject to regulatory approval.