Cargill reports first-quarter fiscal 2013 earnings
MINNEAPOLIS, Oct. 11, 2012 /PRNewswire/ -- Cargill today reported net earnings of $975 million in the fiscal 2013 first quarter ended Aug. 31, compared with $236 million in the same period a year ago. First-quarter revenues were $33.8 billion compared with $34.6 billion in the year-ago period.
"During the past two years, Cargill has invested $8.1 billion to better serve our customers all around the world," said Greg Page, Cargill chairman and chief executive officer. "By investing steadily, we've been able to significantly boost the breadth and depth of the products and services we offer our customers. And that has strengthened the balance, diversification and resilience we strive for in our business."
Three additional factors contributed to Cargill's performance. Results were balanced, with improved earnings across all five business segments. There were no significant losses in any one business unit, the latter a factor that affected the year-ago period. The company benefited from the considerable time and energy invested during the past 12 months to lower costs, simplify and streamline processes, and ensure capital expenditures were being directed to where they mattered most to customers.
The impact of the U.S. drought and weather events in other crop-growing areas such as the Black Sea region is still unfolding. A key variable is how food and feed demand worldwide will adjust in the coming months if prices remain high. "Now more than ever Cargill is using our knowledge and market insight to help customers manage in this time of tighter supplies, higher prices and more volatile markets," said Page. "We are reaching out to customers and tapping the full resources of Cargill to create solutions that address their needs."
In addition to providing hedging solutions to agricultural producers, feed and food makers and energy users, Cargill works with customers in a variety of ways. The company finds alternative sources of supply and provides supply assurance. It helps customers reduce or stabilize their input costs and make them more predictable. Using its logistics expertise, Cargill assists customers to obtain better freight rates, routing or timing, or avoid costly delays. It offers storage solutions that help customers preserve product quality, minimize shrinkage or reduce working capital. The company also serves customers' informational needs, whether through advisory agreements or more informally through crop tours, seminars and site visits.
The impact of the drought on Cargill's business has been mixed and will continue to be so in the months ahead. The weather has altered the normal distribution of raw materials around the world, and that is pushing more international buyers to non-U.S. origins. As a result, Cargill expects more atypical trade flows – a condition that calls upon its capabilities in market analytics, risk management and logistics. Cargill's North American grain handling volumes for exports are anticipated to be lower than pre-drought expectations, and it may be a challenging year for the company's animal protein businesses globally.
Cargill continues to invest in assets that support customers. During the first quarter, Cargill acquired the Envirotemp™ FR3™ dielectric fluid business and brand from Cooper Power Systems. Dielectric fluids are used to cool transformers and other electrical equipment. This vegetable oil-based product is an alternative to petroleum-based fluids. Cargill intends to grow the business with utility and industrial customers that are migrating to high performance, bio-based solutions.
The company purchased a ground beef processing facility in Fort Worth, Texas, that was formerly owned by AFA Foods. The plant is well situated, both to receive raw materials from Cargill's beef production plants in Friona and Plainview, Texas, and to serve existing and prospective customers.
Cargill is constructing an animal nutrition facility in South Korea's port of Dangjin. It also announced plans to build a specialty feed facility in Bovina, Texas.
Cargill is an international producer and marketer of food, agricultural, financial and industrial products and services. Founded in 1865, the privately held company employs 142,000 people in 65 countries. Cargill helps customers succeed through collaboration and innovation, and is committed to applying its global knowledge and experience to help meet economic, environmental and social challenges wherever it does business. For more information, visit http://www.cargill.com.