August 17, 2009

 

Land O'Lakes reports US$5.8 billion in net sales in H1

 

 

Land O'Lakes, Inc. reported net sales of US$5.8 billion and net earnings of US$164.1 million for the first six months of 2009.

 

While net sales were down from US$6.6 billion for the first-half of last year, the US$164.1 million in net earnings matched the same period last year amid a difficult 2009.

 

The company reported net sales of US$2.8 billion and net earnings of US$81.5 million for the second quarter, versus US$3.3 billion in net sales and $102.8 million in net earnings for the same period one year ago.

 

Land O'Lakes President and Chief Executive Officer Chris Policinski said the company's first-half financial results indicated that while Land O'Lakes "is not immune to the stresses and challenges of a difficult economy, we are solidly positioned to deal with the challenges ahead."

 

Dairy Foods and Layers/Eggs particularly affected by declining commodity markets and the impact of economic conditions on consumer purchasing decisions;

 

Strong performance in seed and crop protection products; and feed realizing a volume decline in the livestock segment (due to financial stress among beef cattle and dairy producers), but seeing increased volume in the lifestyle feed and ingredients segments.

 

The Feed division reported US$851 million in sales and US$19.8 million in pretax earnings for the second quarter, versus US$926 million in sales and US$21.0 million in pretax earnings for the second quarter of 2008.

 

The feed segment also reported US$1.74 billion in sales year to date, and US$25.1 million in pretax earnings, down from US$1.87 billion in sales and US$30.4 million in pretax earnings through the first two quarters of 2008.

 

Factors affecting feed performance, particularly in the livestock sector, were reduced volumes and a shift away from fully formulated feeds, attributable largely to market declines and financial stress in the beef cattle and dairy industries.

 

Year to date, livestock feed volumes were down 13 percent versus the first half of 2008, while lifestyle feed volumes were up 2 percent and feed ingredients volumes were up 1 percent.

 

Feed's 2009 earnings were also partly supported by unrealized hedging gains.