MERRIAM, KANSAS, US — Seaboard Corp. posted operating income of $16 million in its Commodity Trading and Milling (CT&M) segment during the second quarter ended July 3, down 34% from $24 million in the same quarter a year ago.
Seaboard said the decrease in operating income primarily reflected derivative contract losses related to mark-to-market adjustments and lower volumes of commodities sold, 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 $26 million, down from $27 million in the same period a year ago.
Net sales for the segment during the most recent quarter totaled $1.38 billion, up 23% from $1.12 billion in the same period a year ago. The increase primarily reflected sales prices for most commodities, partially offset by lower volumes to both third-party customers and affiliates, Seaboard said.
In an Aug. 3 filing with the US Securities and Exchange Commission, Seaboard said it invested $223 million in property, plant and equipment in the first half of fiscal 2021, of which $170 million was in the Pork segment. For the remainder of 2021, Seaboard said management has budgeted capital expenditures totaling $350 million.
Overall, Seaboard in the second quarter posted net income of $176 million, equal to $151.56 per share on the common stock, up from a loss of $27 million in the same period a year ago. Net sales were $2.43 billion, up 34% from $1.81 billion in the same period a year ago.