Greg Page, Cargill chairman and chief executive officer. (Photo: Stock File/FIS)

Cargill's Q4 earnings drop 7 pc

Cargill has reported USD 404 million in earnings from continuing operations in the fiscal 2011 fourth quarter ended 31 May, a 7 per cent decrease from USD 435 million in the same period a year ago. For the full fiscal year, earnings from continuing operations totalled USD 2.69 billion, a 35 per cent increase from USD 1.99 billion in the prior fiscal year.

The company recorded an additional USD 359 million in the fourth quarter from discontinued operations – income attributable to Cargill's former majority investment in The Mosaic Company. For the full fiscal year, income from discontinued operations was USD 1.55 billion.

Fourth quarter consolidated revenues were USD 34.8 billion, a 32 per cent increase from USD 26.3 billion in the year-ago period. Full-year consolidated revenues were USD 119.5 billion, up 18 per cent from USD 101.3 billion in the prior year.

"The past year presented a challenging operating environment for Cargill and our customers," said Greg Page, Cargill chairman and chief executive officer. “Cargill sought to be a 'port in the storm' for our customers, sourcing food and feedstuffs from multiple origins, handling the logistics, managing the risk and delivering reliably."

Three of Cargill's five business segments increased earnings in the fourth quarter. Four of the five improved results in the full year.

Origination and processing led Cargill's fiscal 2011 earnings, with results up for the quarter and the year.

The segment used its global sourcing and risk management capabilities to deliver reliably to customers while meeting challenges posed by weather-related crop production problems in key growing areas, changing trade flows and fluctuating commodity prices. Despite a softer fourth quarter, the food ingredients and applications segment increased earnings from the year-ago period.

The diverse segment, which includes about 40 business units, benefited variably from a mix of factors including higher sale volumes, effective risk management, improved yields and more value-added offerings.

During fiscal 2011, Cargill invested more than USD 3 billion in acquisitions and new or expanded facilities that strengthen its commitment to being a reliable supplier and innovative partner to its customers in developed and emerging markets.

Cargill is also building new or expanded plants in several countries, including animal feed mills in Russia and Vietnam and food innovation centres in Brazil and the US. As it does every year, Cargill also made improvements to existing plants and assets that help keep them safe, energy efficient and environmentally sound.

On 25 May, Cargill and The Mosaic Company completed the closing of the transaction in which Cargill divested its 64 per cent stake in Mosaic by exchanging 286 million Mosaic shares for Cargill stock held by the company's family shareholders.

The transaction maintains Cargill's status as a private company while meeting the diversification and distribution needs of the charitable trusts, enhances the company's credit profile and ensures its financial results are fully aligned with the performance of the businesses Cargill manages directly.

In the first few months of fiscal 2012, Cargill completed the purchase of Italian animal nutrition company Raggio di Sole Mangimi.

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