USA – Cargill’s full-year revenues decreased 1% to US$113.5 billion as uncertain global business environment slowed down earnings during the period.
In the fiscal 2019 fourth quarter ended May 31, 2019, operating earnings were US$476 million, down 41% from the US$809 million earned in last year’s record fourth quarter.
For the 12 months, net earnings decreased 17% to US$2.56 billion despite continued investments in key markets and sustainable supply chains.
Earnings were led by North American protein business by combining strong demand for beef and eggs with consumer insights that helped customers win in local markets.
Dave MacLennan, Cargill’s chairman and chief executive officer said the company targets to accelerate growth in specific market segments through more value creation for customers.
“Throughout the year, we faced a very challenging global business environment that slowed earnings,” said Dave MacLennan.
“Still, we improved performance in several food and financial businesses and significantly reduced costs companywide.”
In Food Ingredients & Applications segment, starches and sweeteners recorded improved sales volume in North America though this was offset by higher energy and raw material costs in Europe.
European business was impacted by lower sales volume and higher operating costs in North America while higher salt earnings in the fourth period were contributed by sales of salts for food and water quality applications.
Origination & Processing was impacted by U.S.-China trade feuds especially in corn and oilseeds.
Grain marketing and transportation activities was also slowed by adverse wet weather in the U.S.
Earnings in South America were held back by a crop shortfall in Paraguay and a difficult crush environment in Argentina while in Europe, lower results were attributed to softening profitability in biodiesel.
Boost from protein
Animal Nutrition & Protein was the biggest contributor to Cargill’s earnings for the quarter though the North American protein business was lower than last year as a result of spring flooding in the U.S. Midwest.
Global poultry business was offset by market and operating challenges across regions while the entire animal nutrition segment suffered from reduction in feed demand resulting from the culling of pigs in China and nearby countries to control the incidence of African swine fever.
In Asia, Cargill boosted its market presence by opening a US$50 million poultry processing facility, increasing capacity for cooked chicken products.
Cargill said it is constructing a flagship facility for producing premixes and specialty feeds for young animals in Jiangxi province and is expected to be operational by the end of 2020.
To meet the specialized animal nutrition needs of customers in the Middle East and North Africa, Cargill opened a state-of-the-art premix plant in Jordan.