For the full fiscal year, Cargill earned $3.33bn, a 16% decrease from a record $3.95bn in the prior year. Revenues for the full year decreased 3% to $116.6bn. Cash flow from operations declined 6% to $6.7bn.
“The year was a tale of two halves,” said Greg Page, Cargill chairman and CEO. “Cargill posted record results through November. In the second half, earnings slowed considerably as the world economy contracted for the first time in six decades. In the end, the net effect was the second-best year in our company’s history.”
Page credited Cargill’s profitability to four factors: “The company went into the downturn with a strong balance sheet,” he said. “We acted early to reduce costs and decrease the use of debt and operating working capital. Our trading teams anticipated price volatility correctly in both the run-up and the run-down in commodity values. We kept the focus on being a reliable supplier to our customers, helping them meet the challenges of these difficult economic times.”
Page said Cargill’s business diversity was also a source of strength. “Operating in many industries and in many countries allowed us to cushion some of the downturn by serving areas of growth, particularly in developing economies that experienced smaller declines in their gross domestic products.”
Among Cargill’s five business segments, fourth-quarter earnings in agriculture services and in food ingredients and applications were up from the prior year, reflecting steps taken by this diverse group of business units to reduce costs, adjust product mix and collaborate with customers on value-adding solutions.
The origination and processing segment posted solid profits, though down from last year’s very strong fourth-quarter performance. The risk management and financial segment incurred a loss related largely to financial markets activities. Earnings in the industrial segment, which includes Cargill’s majority investment in The Mosaic Company, were down significantly from the fourth quarter a year ago.
For the full fiscal year, earnings in the origination and processing segment were moderately below last year’s record high. Food ingredients and applications results also were down moderately. The agriculture services segment finished just under the year-ago level. The risk management and financial segment incurred a loss, but its energy businesses posted record results. The industrial segment, which includes Cargill’s majority investment in The Mosaic Company, pulled ahead of last year due to a strong first half.
“The path to economic recovery may well be uneven, but Cargill remains optimistic,” said Page. “We’ll continue to invest to better serve our customers and, wherever we do business, to partner with local, regional and international organisations that share our commitment to improving health and nutrition, education and environmental stewardship.”
Source: Cargill Inc
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