US processing giant Cargill has continued to recover from last year’s poor performance, reporting “solid” second-quarter results and improvements across its meat segment.
The company recorded net earnings of US$409m in the fiscal 2013 second quarter, ended November 30, up from just $100m in 2011. This brought earnings for the first six months of the financial year to $1.38bn, a huge increase from the $336m earnings reported last January.
Only the company’s food ingredients and applications segment reported a drop in earnings, with the decline driven by small losses in food ingredients. Cargill pointed out that this was against a backdrop of strong performance last year, with profits returning to normal levels in 2012, and excess capacity in the North American ethanol market driving down sales.
Cargill added that most of its meat operations saw improvements in volume and value, despite “higher raw material or livestock feeding costs”. As a result, the company’s animal protein businesses posted a combined profit in contrast to the losses reported last year.
The integration of animal nutrition business Provimi, acquired by Cargill in late 2011, drove improvements in the profitability of the agriculture services segment and helped the company tackle rising feed ingredient costs.
Commenting on the results, Cargill chairman and chief executive officer Greg Page said: “Cargill posted a solid second quarter, with earnings balanced and diversified across the breadth of the company.
“The steps we’ve taken over the past months to focus attention on what our customers value most, change how we work, instill more cost discipline and invest in growth are paying off in the current year. Most importantly, these changes are key to delivering sustainable growth year-in and year-out.”
He added that having focused on acquisitons in the past two fiscal years, Cargill would now look towards expanding and modernising its global facilities.
“We have a record $2.4bn of large projects under construction in 13 countries,” said Page.
“As these facilities come on line, they strengthen Cargill’s supply chain, risk management and innovation capabilities. We want our customers and stakeholders to think of Cargill first when they are looking for a solution or an opportunity. These investments help us better serve their needs and become the partner of choice.”