August 9, 2013

 

 

Cargill has reported net earnings of US$483 million in the fourth quarter of the 2013 financial year ended May 31, a substantial increase from US$73 million in the same period a year ago.

 

Fourth-quarter revenues were US$35.4 billion, a 4% increase from US$34 billion in the year-ago period.

 

For the full financial year, Cargill earned US$2.31 billion, nearly double the US$1.17 billion in the previous year. Revenues reached US$136.7 billion, up 2% from last year's US$133.9 billion. Cash flow from operations was US$4.18 billion, a 19% increase from US$3.51 billion in fiscal 2012.

 

"Cargill's earnings improved significantly over the prior year," said Greg Page, Cargill chairman and chief executive officer. "Nearly all of our business units were profitable, and more than two-thirds exceeded year-ago results. We did a better job of delivering innovations and solutions that help our customers succeed. We also drew on our sourcing, logistical and risk management skills to navigate volatile commodity markets in the first half that were driven by severe weather."

 

Page said recent changes taken by the company also have made a noticeable difference. "We took action to increase our speed and agility, while holding costs in line. We invested in assets that expand Cargill's global reach and capabilities, and that support our customers as they seek to grow in new markets."

 

Cargill currently has US$2.6 billion of major agricultural, food and energy projects under construction, near completion or recently opened in 14 countries around the world.

 

Among Cargill's five business segments, the origination and processing segment was the largest contributor to consolidated earnings in both the fourth quarter and full year. Results were up considerably from the prior year, with improved performance in grains and oilseeds in most geographies.

 

The segment drew on Cargill's global footprint and strengths in market analysis, logistics and risk management to overcome the supply challenges caused by weather disruptions and tight stocks, serving customers reliably. The segment also realised turnarounds in cotton and sugar from the prior year.

 

The food ingredients and applications segment also was a significant contributor to company results in both periods. Performance was particularly strong in sweeteners, starches and cocoa in several countries. Combined earnings among the segment's animal protein businesses were down from last year, chiefly due to the negative impacts of drought, high feed costs and, in the US, the tightest cattle supply in 60 years.

 

The agriculture services segment posted improved results for the quarter and the year. The integration of Provimi, acquired last year, accelerated earnings growth in global animal nutrition.

 

Results in North American farm services lagged the prior year in both periods, largely due to drought-affected, smaller crops. The cold, wet spring in the US Midwest, which delayed plantings and input purchases, also hampered results.

 

Although fourth-quarter earnings decreased, full-year results in Cargill's industrial segment edged ahead of fiscal 2012. The long, snowy North American winter boosted demand for road salt and de-icing products, and the first-quarter acquisition of a vegetable oil-based dielectric fluid business was accretive to segment earnings. Dielectric fluids are used to cool transformers and electrical equipment.