Cargill earnings rise on sale of Brazilian business
April 13, 2010
by Eric Schroeder
MINNEAPOLIS — Third-quarter earnings at Cargill rose to $898 million in the period ended Feb. 28, boosted by a $169 million net gain from the sale of the company’s Brazilian poultry and pork business. The most recent quarterly results compared with earnings of $326 million in the third quarter of fiscal 2009.
For the first nine months of fiscal 2010, net earnings totaled $1.91 billion, down from $3.01 billion in the same period of fiscal 2009. Excluding earnings from Mosaic and from discontinued operations, Cargill said its nine-month results were close to the year-ago level.
“The growth in Cargill’s third-quarter earnings was broad based, with all five of our business segments posting improved results from a year ago,” said Greg Page, chairman and chief executive officer. “Because of the connections across our diverse portfolio of businesses, we were able to benefit from the faster pace of economic recovery occurring in emerging markets. In developed countries, where economic conditions are improving more slowly, the focus on supporting the supply chain management needs of our customers helped results, as did the attention paid internally to managing costs and running our facilities as efficiently as possible.”
Among Cargill’s five segments, earnings in agriculture services were lifted by the late, large North American harvest. The company said its origination and processing results finished ahead of last year, as the company’s commodity trading and processing operations benefited from stepped-up economic activity.
Food ingredients and applications results also improved, reflecting recessionary conditions that negatively affected last year’s third quarter.
Cargill said its risk management and financial segment, as well as its industrial segment, also turned in better year-over-year results.
During the third quarter, Cargill opened a major expansion of its corn processing plant in Uberlândia, Brazil. The facility produces corn starches, sweeteners and other corn-based products for food, industrial and pharmaceutical customers in Brazil and across Latin America. In Wuhan, China, Cargill and its joint venture partner began operating a second facility for producing arachidonic acid, an ingredient used in infant food products for infants’ brain and optic nerve development.
The company also began the startup of its new joint venture sugar refinery on the East coast of India near the port of Kakinada. In a separate three-way joint venture, the company started construction in Gramercy, La., on what is expected to become one of the largest and most efficient sugar refineries in the United States.
Finally, Cargill completed the purchase of certain assets of East Chicago, Ind.-based Robinson Steel, as well as Robinson’s 50% interest in the Cargill Robinson joint venture formed in 2007. Cargill said the acquisition will increase its presence in high quality, steel sheet and plate markets and complements its steel trading and distribution activities.