Cargill reports second-quarter fiscal 2008 earnings

Date:01-14-2008

Cargill today reported net earnings of $954 million in the 2008 second quarter ended Nov. 30, up 44 percent from $662 million in the same period a year ago. In the first six months, the company earned $1.87 billion, a 61 percent increase from $1.16 billion a year ago.

“We are very pleased with today’s results,” said Greg Page, Cargill chairman and chief executive officer. “Strong fundamentals are driving volume and volatility in global agriculture today. Cargill is in position to benefit from these forces because of our past investments, our risk management and our commitment to creating shared value with customers.”

Page said that over the past seven years, Cargill has invested upward of $18 billion in fixed and working capital to expand the company’s global footprint. “Today we are moving bigger volumes of commodities, through more facilities, at higher utilization rates and over longer distances. As we’ve grown, we’ve also strengthened our ability to measure and assess risk. That’s been crucial, given the speed and magnitude of price movements in today’s agricultural and energy markets.”

Page also noted Cargill’s commitment to helping customers succeed. “Since we adopted our customer solutions strategy, we’ve acquired market-leading companies in food and animal nutrition, developed new capabilities, attracted top-notch talent in fields new to Cargill and sought to become better collaborators. Cargill today is creating significant value for many of our food and animal nutrition customers, and we are sharing in the value created.”

Four of Cargill’s five business segments increased earnings from the second quarter a year ago. The largest contribution came from the origination and processing segment, which sources, processes and distributes agricultural commodities and provides supply chain and risk management services to customers globally. The industrial segment, which benefited from global demand for fertilizers, also was up significantly. Two additional segments food ingredients and applications, and agriculture services posted improved performances. Results in the risk management and financial segment were moderately below the year-ago level.

Adding to its food ingredients capabilities, Cargill is finalizing the conversion of its sweetener facility in Manchester, U.K., to a wheat grind from corn. In Brazil, Cargill began producing compound and industrial chocolate for the domestic food industry from its new facility in Porto Ferreira in the state of São Paulo. In Spain, Cargill formed a joint venture with Hojiblanca, a major olive oil cooperative based in southern Spain near Málaga. In animal nutrition, Cargill started up its fifth feed mill in Vietnam in Long An province.

Cargill’s agriculture services segment launched CargillAg.com, a Web site that offers U.S. producers a one-stop grain marketing resource. The site provides streaming grain and livestock futures market quotes, continuously updated cash bid prices at every elevator in Cargill AgHorizons’ U.S. network, local weather and news, and exclusive grain market commentary by Cargill.

Cargill and Teijin Limited of Japan completed a joint venture in NatureWorks LLC. NatureWorks produces a family of biopolymers made from annually renewable resources with cost and performance that compete with petroleum-based packaging materials and fibers. Its proprietary polylactide biopolymer is marketed under the NatureWorks® polymer and Ingeo™ fibers brands.