Cargill report 18 percent increase in quarterly profit

23 Aug 2005

Excluding the one-time gain, Cargill’s 12-month net earnings were $1.53 billion, up 15 percent from $1.33 billion a year ago. Revenues for the full year rose 13 percent to $71.1 billion. Cash flow from operations increased 7 percent to $3.2 billion.

23/08/05 Cargill has reported net earnings of $230 million for the 2005 fourth quarter ended May 31, up 18 percent from $195 million in the same period a year ago.
For the 2005 fiscal year, the company earned $2.1 billion, which included a noncash net gain of $578 million realized in the second quarter. Excluding the one-time gain, Cargill’s 12-month net earnings were $1.53 billion, up 15 percent from $1.33 billion a year ago.

Revenues for the full year rose 13 percent to $71.1 billion. Cash flow from operations increased 7 percent to $3.2 billion.

“Backed by strong performance across our diverse business and geographic operations, Cargill delivered increased earnings in fiscal 2005,” said Warren Staley, Cargill chairman and chief executive officer. “Today’s results are a tangible sign of the progress achieved in our company’s strategy to become a recognized leader in creating food and agricultural solutions that help customers succeed.”

Staley traced the year’s performance to Cargill’s development in 1999 of a new business model that called on the company to add proficiencies in supply chain management, food applications, and health and nutrition while continuing to grow its traditional strengths in trading, processing and risk management. “Through our employees’ initiative, we undertook many changes that are making Cargill today a more customer focused, innovative, collaborative and higher performing company.”

Among the contributors to Cargill’s earnings for the full fiscal year were its animal nutrition, beef, egg product, pork and poultry businesses worldwide; the risk management and financial segment; the global supply chain management network, which includes grain, oilseeds and other commodities and ocean shipping services; food ingredients in Europe; the U.S.- and Latin American-based salt businesses, which manufacture products for food, road deicing and other uses; and the U.S.- and Canadian-based agriculture services units, which offer an expanding family of grain marketing products that help farmers manage their price risk. Prior to its sale in November 2004, the company’s steel operations contributed significantly to operating earnings.

Most of the business areas highlighted above also were responsible for Cargill’s solid operating results in the fourth quarter.

Fiscal 2005 was a year of expansion for Cargill, especially in emerging markets. The company is adding to its oilseeds operations in Argentina, Brazil, China, India, Romania, Russia and Ukraine.

In meat, Cargill purchased Seara, a leading poultry and pork business in Brazil, and became the sole owner of Finexcor, an Argentine beef processor and exporter. In Canada, it bought Caravelle Foods, a supplier of frozen beef patties to the country’s quick-service restaurant industry.

In food ingredients, the company purchased cocoa processing facilities in England and Germany, and a chocolate plant in Germany, which will expand services to confectioners and other food makers in Europe and eastward. Cargill also acquired a pectin business that makes citrus-based texturizers for food and beverage applications.

Staley said Cargill is striving to help customers understand fully how Cargill can help them achieve their business objectives. “Our goal is to bring people together and put collaboration to work. We want to create solutions that help our customers and Cargill to grow, succeed and contribute to a better world.”