News

Cargill sees 2Q, 1H earnings slide

7 Jan 2019

Cargill has reported results for the fiscal 2019 second quarter and first half ended Nov. 30, 2018. Adjusted operating earnings were $853 million, down 10% from the $948 million earned in last year’s strong comparative period.

Cargill has reported results for the fiscal 2019 second quarter and first half ended Nov. 30, 2018. Adjusted operating earnings were $853 million, down 10% from the $948 million earned in last year’s strong comparative period. This brought first-half earnings to $1.74 billion, a 5% decrease from the prior year. Net earnings on a U.S. GAAP basis for the quarter were $741 million, a 20% decline from $924 million in the year-ago period. For the half, net earnings dipped 7% to $1.76 billion. Second-quarter revenues decreased 4% to $28 billion, bringing the year-to-date figure to $56.7 billion.

“Our teams executed in a world of uncertainty to bring the best solutions to our customers and the consumers they serve,” said Dave MacLennan, Cargill’s chairman and chief executive officer. MacLennan referenced Cargill’s ability to adjust rapidly to changing market conditions throughout the quarter and deliver safe, reliable and sustainably produced foods to their destinations. “Now, we are pushing to ready our businesses for the future with continuous improvement, financial discipline and a disruptive mindset.”

Food Ingredients & Applications decreased on mixed results across the segment. Starches and sweeteners earnings decreased on historically low ethanol prices in North America and higher energy and raw material costs in Europe. Lower sales volume and higher operating costs in North America trimmed otherwise strong cocoa and chocolate performance in other regions. Good positioning helped lift edible oils above last year. Bioindustrial posted a solid gain, while salt earnings edged ahead as higher road salt production costs were offset by increased results in food and water quality.

The segment announced Avansya, a new joint venture with Royal DSM that will produce zero-calorie sweetness solutions through fermentation. These products, such as steviol glycosides Reb M and Reb D, will give food and beverage companies a more scalable, sustainable and cost-effective alternative to extracting them from stevia plants. Avansya will market these products under the EverSweet brand. Subject to regulatory approvals, the venture is expected to launch in the first quarter of calendar 2019.