Cargill reports second-quarter earnings

MINNEAPOLIS — Cargill today reported net

earnings of $1.49 billion in the fiscal 2011 second quarter ended Nov.

30, compared with $489 million in the same period a year ago.

Excluding earnings from its majority investment in The Mosaic

Company, Cargill earned $832 million, nearly double last year’s $420

million.

In the first six months, Cargill earned $2.37 billion, up from $1.01

billion a year ago. Excluding Mosaic, Cargill’s first-half earnings

were $1.53 billion, a 74 percent increase from $878 million a year

ago.

Consolidated revenues in the second quarter rose 16 percent to $31.1

billion, bringing the total through the first half to $58.9 billion.

"Cargill generated strong results across the breadth of our

businesses," said Greg Page, Cargill chairman and chief executive

officer. "The diversity and balance built into the mix provides the

company with a great deal of resilience. By tapping the connectivity

among our businesses, we also put more knowledge and insight to work

on behalf of customers. Increasingly, they look to Cargill for

innovation that supports their growth objectives."

Four of Cargill’s five business segments posted increased earnings in

the second quarter. Results were led by the origination and

processing segment, which developed an early and accurate read on the

first quarter’s weather events and subsequent shifts in trade flows

and supply-and-demand dynamics. This enabled the segment to serve

import-dependent customers with grain rerouted from alternate origins

while handling substantial volatility across agricultural commodity

markets.

Second-quarter earnings also rose in agricultural services, aided by

the bigger grain handling volumes made possible by the large North

American harvest.

Results in food ingredients were mixed, with some units benefited by

better volumes and gains from risk management activities and others

pressured by higher raw material costs. On a combined basis, segment

earnings increased moderately from the second quarter a year ago.

Industrial results were lifted by the increase in earnings from

Cargill’s majority investment in The Mosaic Company. Earnings

decreased in the risk management and financial segment, reflecting

sluggish demand in range-bound energy markets.

During the second quarter, Cargill agreed to acquire Unilever’s

shelf-stable condiments business in Brazil. The purchase includes

leading brands in tomato sauce and paste, and a processing facility in

the state of Goias. The acquisition, which is expected to be

completed in the first quarter of calendar 2011, would add to

Cargill’s stable of well-known brands of cooking oils, mayonnaise,

olive oils, olives and pasta sold today in Brazilian supermarkets.

In December, Cargill announced agreements related to two additional

acquisitions:

Cargill agreed to acquire a majority share position in PT Sorini Agro

Asia Corporindo Tbk. Based in Indonesia, the company produces a wide

range of starch and starch-based products used in food, beverage,

cosmetic, personal care and pharmaceutical applications. The

acquisition, which is expected to be completed in the first quarter of

calendar 2011, would be an anchor for the future growth of Cargill’s

food ingredients business in Asia, particularly in Indonesia and

Southeast Asia.

Cargill reached an agreement with Calgary-based Agrium to acquire its

AWB commodity management business. The business fits well with

Cargill’s existing operations in Australia. It should help us meet

growing food demand in Asia Pacific and around the world and allow us

more opportunity to help Australian producers manage their grain

marketing price risk and expand their access to global markets.

Subject to various approvals, Cargill aims to complete the

transaction in the first half of calendar 2011.

Tags: agribusiness, agriculture, cargill