January 8, 2020

 

Cargill posts 19% quarterly profit due to rising global meat demand

 

The commodities trader's animal nutrition and protein business unit profited from the increased world meat demand unaffected by the African swine fever epidemic in Asia, reported Reuters.

 

For the company's fiscal 2020 second quarter results (ending November 30, 2019), its adjusted operating revenue increased to US$1.02 billion, up 19% compared to US$853 million in 2018.

 

Net earnings for Cargill hit US$1.19 billion, up 61% from US$741 million in 2018, which includes divestment of the company's malt business and CarVal Investors, its financial subsidiary.

 

Cargill's second quarter revenues increased to US$29.2 billion, up 4%.

 

Dave MacLennan, Cargill chairman and chief executive officer said the company's positive financial performance was attributed to ongoing restructuring, recent acquisitions and expanded capabilities.

 

Global grain traders are investing in specialty ingredients or meat production, two business segments with high potential for bigger profit margins. These commodity firms are also discarding assets which have performed poorly.

 

Archer Daniels Midland Co acquired Yerbalatina Phytoactives on January 7, 2020. The Brazilian company deals in plant-based extracts. The company has also sold its Brazilian palm business as part of an overhaul to its portfolio.

 

Due to low margins and overproduction, Bunge Ltd terminated its Iowa ethanol plant ownership in early January this year, which it has held for 13 years.

 

Louis Dreyfus Co had recently announced a cost reduction plan and reshuffled its executive team.

 

Minnesota-based Cargill is the biggest US company privately owned by revenue.

 

-      Reuters