Cargill reports reduced operating figures in 2018 second quarter

USA – Cargill has reported financial results for the fiscal 2018 second quarter and first half ended Nov. 30, 2017, with adjusted operating earnings totalling US$948 million, an 8% decrease against last year’s strong comparative of US$1.03 billion.

For the first half, adjusted operating earnings stood at US$1.84 billion, down 1% from last year, with the net earnings for the quarter on a U.S. GAAP basis at US$924 million, down 6% from US$986 million a year ago.

The first-half net earnings increased 3% to US$1.9 billion while its second-quarter revenues rose 8% to US$29.2 billion, bringing the year-to-date figure to US$56.5 billion.

“Even as conditions vary across our global markets, we continue to realize greater benefits from operating as an integrated company with a unique combination of talent, assets, insights and solutions,” said David MacLennan, Cargill’s chairman and chief executive officer.

He also noted that during the quarter, the company announced more than US$1 billion in agreed acquisitions, joint ventures and new investments in facilities.

“Thanks to the results of our recent strong performance, we are reinvesting in ways that enable our teams to achieve more for our customers and lead for growth.”

Adjusted operating earnings in Animal Nutrition & Protein narrowly exceeded last year’s strong second quarter.

Animal nutrition earnings rose across the global business, with improvement led by premix and feed additives.

However, the protein results in North America decreased slightly against a strong comparative period, since as cattle costs moved up, retail demand for beef remained brisk, as did exports of U.S. beef.

Cargill also completed several acquisitions in December that expand its focus on animal micro-nutrition.

It purchased Cedar Rapids, Iowa-based Diamond V, a developer and manufacturer of natural feed additives, known as microbials, which improve animal health and performance by optimizing digestive function and immune strength.

The acquisition complements Cargill’s recently formed partnership with Austria’s Delacon, a leading maker of natural, plant-based feed additives.

Both investments support the market shift toward sustainable, natural feed ingredients that improve animal health and embrace changing consumer values.

In poultry, Cargill is forming a joint venture with U.K.-based Faccenda Foods.

Once completed, the venture will serve the country’s food retailers and foodservice companies with fresh chicken, turkey and duck.

With regard to organic growth, Cargill is investing US$146 million in its cooked meats facility in Nashville, Tennessee.

Earnings in Food Ingredients & Applications were also up broadly, with a majority of the segment’s food ingredient businesses posting good gains for the quarter.

In addition to de-icing and other industrial applications, the business serves food manufacturers with a wide range of salt ingredients and sodium reduction products.

The numerous projects demonstrate how Cargill is advancing traceability and sustainability in supply chains.

Cargill also is developing products that satisfy consumers’ changing preferences for healthier, simpler foods.

The first product in the new SimPure line blends tapioca and potato starches to give food makers the same taste, texture, appearance and stability of modified starch with simplified, easier-to-understand labelling.

Cargill’s edible oils business also announced the next generation of its Clear Valley line of high-oleic canola oils, with 35% less saturated fat than previous offerings.

The new product will continue to deliver the same taste and performance to food ingredient and quick-service restaurant customers, and will be available early in 2018.

“We are building businesses today that will provide our customers and consumers with the products and solutions they are seeking tomorrow,” MacLennan said.

“We are thinking differently about how to create positive impact and increase consumer trust.”

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