Cargill, the world’s biggest agricultural trading company, showed signs it was turning a corner from sluggish performance by reporting a sharp rebound in earnings.
Adjusted operating earnings in the first quarter ended August 31 rose 35 per cent to $827m, compared with $611m in the same period a year before. Net profit unadjusted for items such as inventory values and hedging positions increased 66 per cent to $852m, writes Gregory Meyer in New York.
The privately held Minnesota company controlled by the Cargill and MacMillan families has a sprawling set of businesses, from beef packing plants to international grain trading. Executives have tried to reshape its portfolio, streamline management and cut costs amid disappointing returns.
David MacLennan, Cargill’s chairman and chief executive, said: “We’ve been charting a new path to higher performance, and it’s rewarding to see the many changes we’ve made resulting in gains across much of the company.”
Cargill said its animal nutrition and protein segment was the largest contributor to the quarter’s earnings, owing partly to a beef business that was helped by bigger cattle herds and stronger demand for steaks and burgers.
Earnings in the origination and processing segment, which houses Cargill’s main grain trading business, “rose moderately,” in part because of improving profit margins from processing soyabeans into meal and oil and the “reversal of mark-to-market losses taken in the preceding quarter,” Cargill said.
Analysts covering the food industry watch Cargill’s results for clues to upcoming earnings from listed competitors such as Archer Daniels Midland and Bunge.
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