Cargill on a "transformative path"15 Aug 2016
Cargill has reported financial results for the fourth quarter and full fiscal year ended May 31, 2016. The company says it is on a transformative path to strengthen financial performance, move in step with changing consumer values.
Cargill has reported financial results for the fourth quarter and full fiscal year ended May 31, 2016. The company says it is on a transformative path to strengthen financial performance, move in step with changing consumer values, and become the most trusted source of sustainable products and services for customers.Adjusted operating earnings were $1.64 billion, a 15% decrease from the prior year. On a U.S. GAAP basis, net earnings totalled $2.38 billion, up 50% from fiscal 2015. Revenues totalled $107.2 billion, an 11% decline that reflected lower commodity prices, a strong U.S. dollar and divestitures.The company recorded an adjusted operating loss of $19 million compared with a $230 million profit in the prior period. On a U.S. GAAP basis, net earnings were $15 million against a $51 million loss in last year’s fourth quarter. Revenues dipped 5% to $27.1 billion.“We are looking ahead as we position our company for higher performance and sustained growth,” said David MacLennan, Cargill’s chairman and chief executive officer. “We have more work to do, but where we have already made changes we are seeing improved results.”MacLennan cited the broad earnings improvement in food ingredients and the reshaping of the company’s portfolio. “We made important changes, adding capabilities essential to our customers’ success. This includes more than $3 billion in strategic acquisitions and new or expanded facilities, as well as nearly $2.4 billion in divestitures. These moves are making us more competitive in sectors where we intend to lead.”Cargill says it delivered strong performance in global animal nutrition, value-added protein and poultry in many regions. In addition, the company posted good results in grain and oilseeds in South America and China, and in food ingredients such as salt, starches, sweeteners and texturizers. Trading activities yielded mixed results, in part due to low volatility in agricultural commodity markets for most of the fiscal year. Stalled growth in several emerging economies also affected earnings.The Food Ingredients & Applications segment was the largest contributor to adjusted operating earnings in the fourth quarter and full year, with results up substantially from a weak comparative period. The focus on improving performance lifted earnings broadly across edible oils, malt, starches, sweeteners and texturizers, as did the first-quarter acquisition of a chocolate business. Salt for food and other applications posted outstanding results. NatureWax, a natural vegetable-based wax business, was acquired in the fourth quarter; it is now part of the segment’s bioindustrial products group.
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