MERRIAM, KANSAS, US — Seaboard Corp. posted operating income of $24 million in its Commodity Trading and Milling (CT&M) segment during the second quarter ended June 27, down 16% from $29 million in the same quarter a year ago.
Seaboard said the decrease in operating income primarily reflected derivative contract losses in the second quarter of 2020, partially offset by higher margins on third-party sales.
Had Seaboard not applied mark-to-market accounting to its derivative instruments, operating income in the segment would have been $27 million, up from $22 million in the same period a year ago.
Net sales for the segment during the most recent quarter totaled $1.12 billion, up 12% from $1 billion in the same period a year ago. The increase primarily reflected higher volumes of certain commodities for third-party customers, including sales for a business acquired in October 2019, and higher prices for certain commodities, partially offset by lower affiliate volumes, Seaboard said.
In a July 28 filing with the US Securities and Exchange Commission, Seaboard said it invested $108 million in property, plant and equipment in the first half of fiscal 2020, of which $75 million was in the Pork segment, $19 million in the Power segment and the remaining amount in other segments. For the remainder of 2020, Seaboard said management has budgeted capital expenditures totaling $174 million, including $14 million for the CT&M segment, primarily for milling assets and other improvements to existing facilities and related equipment.
Overall, Seaboard in the second quarter sustained a loss of $26 million, which compared with income of $58 million, equal to $50.13 per share on the common stock, in the same period a year ago. Net sales were $1.59 billion in the second quarter, up 5% from $1.51 billion in the same period a year ago.
On July 20, Seaboard announced Robert Steer was elected by the company’s board of directors to succeed Steve Bresky as chief executive officer. Bresky died on July 10 at the age of 67.