Cargill’s Profits Quadruple For Quarter, Double For Year
Cargill announced Wednesday that its earnings roughly doubled for its full fiscal year while fourth-quarter earnings jumped a whopping 561 percent.
The Wayzata-based company—which operates in the agricultural, financial, and industrial markets—said net earnings for its full 2013 fiscal year, which ended May 31, totaled $2.31 billion, nearly doubling from $1.17 billion the prior year.
Revenue for the year, meanwhile, totaled $136.7 billion, up 2 percent from $133.9 billion in fiscal 2012.
The company’s fourth quarter earnings totaled $483 million—more than quadrupling the $73 million reported for the same period a year ago.
Revenue for the fourth quarter, meanwhile, totaled $35.4 billion, up 4 percent from $34 billion during the same period in fiscal 2012.
“Nearly all of our business units were profitable, and more than two-thirds exceeded year-ago results,” Chairman and CEO Greg Page said in a statement. “We drew on our sourcing, logistical, and risk-management skills to navigate volatile commodity markets in the first half that were driven by severe weather.”
Cargill’s substantial increase this year is magnified by its disappointing fiscal 2012 results, which were well below expectations. Last year, the company’s earnings were down 56 percent from a record-high $2.69 billion in 2011. And its fourth-quarter earnings were down 82 percent from $404 million during the same period in 2011.
“We took action to increase our speed and agility, while holding costs in line. We invested in assets that expand Cargill’s global reach and capabilities, and that support our customers as they seek to grow in new markets,” Page said.
Cargill said its processing, food ingredients, and agriculture services segments were three of the biggest contributors to the company’s successful year and quarter, especially in its international markets.
According to the company, there was a big turnaround in its cotton and sugar businesses from 2012, as well as its starches and cocoa businesses in several countries.
However, combined earnings for the company’s animal protein businesses were down from last year, due mainly to the negative impacts of drought and high feed costs in the United States—which were also a primary factor in the company’s 42 percent drop in third-quarter profits.
The company said acquisitions also fueled growth, like its first-quarter purchase of the vegetable oil-based dielectric fluid business Envirotemp FR3—dielectric fluids are used to cool transformers and electrical equipment. The company also recently made acquisitions in Thailand and Australia.
Cargill said it currently has $2.6 billion of major agricultural, food, and energy projects under construction, near completion, or recently opened in 14 countries around the world.
The projects include poultry processing plants in Russia, China, and Thailand; an animal nutrition facility in South Korea; a corn processing plant in Brazil; a cocoa processing plant in Indonesia; and, in the United States, the establishment of a biorefinery campus in Fort Dodge, Iowa, and the modernization and expansion of a multiseed processing plant in North Dakota.
Cargill employs 142,000 people in 65 countries. It is Minnesota’s largest private company based on revenue.