August 10, 2011


Cargill posts 7% drop in fiscal 2011 profits



Cargill reported a 7% fall in earnings from US$435 million to US$404 million, in the same period against a year ago, from continuing operations in the fiscal Q4 2011 ended May 31.


For the full fiscal year, earnings from continuing operations totalled US$2.69 billion, a 35% increase from US$1.99 billion in the prior fiscal year.


The company recorded an additional US$359 million in the fourth quarter from discontinued operations- income attributable to Cargill's former majority investment in The Mosaic Company. For the full fiscal year, income from discontinued operations was US$1.55 billion. Cargill also recognised a one-time accounting gain of US$11.49 billion on the May 25, 2011, distribution of its Mosaic shares, which were exchanged for Cargill stock and Cargill debt.


Fourth quarter consolidated revenues were US$34.8 billion, a 32% increase from US$26.3 billion in the year-ago period. Full-year consolidated revenues were US$119.5 billion, up 18% from US$101.3 billion in the prior year. Cash flow from operations was US$4.6 billion compared with last year's US$3.3 billion.


"The past year presented a challenging operating environment for Cargill and our customers," said Greg Page, Cargill chairman and chief executive officer. "From weather-related supply shocks in food commodities, grain export restrictions and rising energy prices to the uneven global economic recovery, looming sovereign debts and deficits, political unrest and natural disasters – the uncertainty led to volatile prices across a range of raw materials. Cargill sought to be a 'port in the storm' for our customers, sourcing food and feedstuffs from multiple origins, handling the logistics, managing the risk and delivering reliably."


Three of Cargill's five business segments increased earnings in the fourth quarter; four of the five improved results in the full year. Origination and processing led Cargill's fiscal 2011 earnings, with results up for the quarter and the year. The segment used its global sourcing and risk management capabilities to deliver reliably to customers while meeting challenges posed by weather-related crop production problems in key growing areas, changing trade flows and fluctuating commodity prices.


Despite a softer fourth quarter, the food ingredients and applications segment increased earnings from the year-ago period. The diverse segment, which includes about 40 business units, benefited variably from a mix of factors including higher sales volumes, effective risk management, improved yields and more value-added offerings. Agriculture services posted a strong fourth quarter and year. The segment, which provides crop and livestock producers worldwide with farm services and products, relied on its risk management and grain marketing skills to handle rising input costs and help customers do the same.


During fiscal 2011, Cargill invested more than US$3 billion in acquisitions and new or expanded facilities that strengthen our commitment to being a reliable supplier and innovative partner to our customers in developed and emerging markets.


The company acquired the AWB commodity management business in Australia, Unilever's shelf-stable condiments business in Brazil, Indonesian starch and sweetener maker PT Sorini Agro Asia Corporindo Tbk, Royal Nedalco's potable alcohol operations in Europe, a Chinese port facility, a Canadian grain facility and a US corn wet mill ethanol facility.


Cargill also is building new or expanded plants in several countries, including animal feed mills in Russia and Vietnam, poultry processing operations in Thailand, and food innovation centers in Brazil and the US.

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